What is a Feasibility Analysis ?

Feasibility is the measure of how beneficial or practical the development of an information system will be to an organization.

 

A Feasibility Study is a process which defines exactly what a project is and what strategic issues need to be considered to assess its feasibility, or likelihood of succeeding.Ideally, the feasibility study process involves making rational decisions about a number of enduring characteristics of a project

 

Feasibility analysis is the process by which feasibility is measured. Feasibility should be measured throughout the life cycle. The scope and complexity of an apparently feasible project can change after the initial problems and opportunities are fully analyzed or after the system has been designed. A project that is feasible at one point in time may become infeasible at a later point in time.

 

 

1.Operational feasibility : A measure of how well the solution of problems or a specific solution will work in the organization. A measure of how people feel about the system/project.

 

2.Technical feasibility : A measure of the practicality of a specific technical solution. A measure of the availability of technical resources and expertise.

 

3.Schedule feasibility: A measure of how reasonable the project timetable is.

 

4.Economic feasibility: A measure of the cost-effectiveness of a project or solution. This is often called a cost-benefit analysis.

 

5. Legal Feasibility : Determines whether the proposed system conflicts with legal requirements, e.g. a Data Processing system must comply with the local Data Protection Acts. When an organization has either internal or external legal counsel, such reviews are typically standard. However, a project may face legal issues after completion if this factor is not considered at this stage

 

 

Operational feasibility criteria measure the urgency of the problem or the acceptability of a solution

 

There are two aspects of operational feasibility to be considered:

1.Is the problem worth solving, or will the solution to the problem work?

2.How do the end-users and management feel about the problem (solution)?

 

PIECES can be used as the basis for analyzing the urgency of a problem or the effectiveness of a solution. The following is a list of the questions that address these issues:

 

Performance : Does the system provide adequate throughput and response time?

 

Information : Does the system provide end-users and managers with timely, pertinent, accurate, and usefully formatted information?

 

Economy : Does the system offer adequate service level and capacity to reduce the costs of the business or increase the profits of the business?

 

Control :Does the system offer adequate controls to protect against fraud and embezzlement and to guarantee the accuracy and security of data and information?

 

Efficiency: Does the system make maximum use of available resources including people, time, flow of forms, minimum processing delays, and the like?

 

Services : Does the system provide desirable and reliable service to those who need it? Is the system flexible and expandable ?

 

How do you determines if a system’s user interface is usable?

 

Ease of Learning - How long does it take to train someone to perform at a desired level.

Ease Of Use - You are able to perform your activity quickly and accurately. If you are a first time user or infrequent user, the interface is easy and understandable. If you are a frequent user, your level of productivity and efficiency is increased.

 

Satisfaction - You the user are favorably pleased with the interface and prefer it over types you are familiar with.

 

 

Technical feasibility addresses three major issues:

 

1.Is the proposed technology or solution practical?

The technology for any defined solution is normally available. The question is whether that technology is mature enough to be easily applied to our problems. Some firms like to use state-of-the-art technology, but most firms prefer to use mature and proven technology.A mature technology has a larger customer base for obtaining advice concerning problems and improvements

 

2.Do we currently possess the necessary technology?

 Assuming the solution's required technology is practical: Is the technology available in this shop?' If the technology is available, does it have the capacity to handle the solution. If the technology is not available: Can the technology be acquired?

 

3.Do we possess the necessary technical expertise, and is the schedule reasonable? Is the Proposed Technology or Solution Practical?

 

 

Explain Schedule Feasibilty.

 

We may have the technology, but that doesn't mean we have the skills required to properly apply that technology. True, all information systems professionals can learn new technologies. However, that learning curve will impact the technical feasibility of the project; specifically, it will impact the schedule.

 

Given our technical expertise, are the project deadlines reasonable? Some projects are initiated with specific deadlines. You need to determine whether the deadlines are mandatory or desirable. If the deadlines are desirable rather than mandatory, the analyst can propose alternative schedules.

 

It is preferable (unless the deadline is absolutely mandatory) to deliver a properly functioning information system two months late than to deliver an error-prone, useless information system on time! Missed schedules are bad, but inadequate systems are worse!

 

 

Explain Economic Feasibility

 

The bottom line in many projects is economic feasibility. During the early phases of the project, economic feasibility analysis amounts to little more than judging whether the possible benefits of solving the problem are worthwhile. When specific requirements and solutions have been identified, the analyst can weigh the costs and benefits of each alternative. This is called a cost-benefit analysis.

 

 

1. The purpose of a cost/benefit analysis is to answer questions such as:

 

1.1  Is the project justified (because benefits outweigh costs)?

1.2 Can the project be done, within given cost constraints?

1.3 What is the minimal cost to attain a certain system?

1.4 What is the preferred alternative, among candidate solutions?

 

2. Examples of things to consider:

2.1. Hardware/software selection

2.2.How to convince management to develop the new system

2.3.Selection among alternative financing arrangements (rent/lease/purchase)

 

3.Difficulties -- discovering and assessing benefits and costs; they can both be intangible, hidden and/or hard to estimate, it's also hard to rank multi-criteria alternatives

 

 

Examples of particular benefits: cost reductions, error reductions, increased throughput, increased flexibility of operation, improved operation, better (e.g., more accurate) and more timely information.

 

Benefits may be classified into one of the following categories:

 

Monetary Monetary -- when $-values can be calculated 

Tangible (Quantified) -- when benefits can be quantified, but $- values can't be calculated 

Intangible -- when neither of the above applies

 

Types of Costs Types of Costs

 

Project-related costs Development and purchasing costs: who builds the system (internally or contracted out)? software used (buy or build)? hardware (what to buy, buy/lease)? facilities (site, communications, power,...)

 

Installation and conversion costs: installing the system, training of personnel, file conversion etc.

Operational costs (on-going) Maintenance: hardware (maintenance, lease, materials,...), software (maintenance fees and contracts), facilities Personnel: operation, maintenance

 

Accounting Methods

 

Assuming that both benefits and costs can be identified and evaluated, how do we compare them to determine project feasibility? Typical cases include comparing costs of alternatives (assuming equal benefits) or comparing various payment options:

 

Payback Analysis: how long will it take (usually, in years) to pay back the project, and accrued costs:

 

Total costs (initial + incremental) - Yearly return (or savings)

 

Return on Investment Analysis Return on Investment Analysis: compares the lifetime profitability of solution.

 

et Present Value Analysis: Net Present Value Analysis: determines the profitability of the new project in terms of today's dollar values. Will tell you that if you invest in the proposed project, after n years you will have $XXX profit/loss on your investment

 

What is ROI ?

 

The ROI analysis technique compares the lifetime profitability of alternative solutions or projects.

 

The ROI for a solution or project is a percentage rate that measures the relationship between the amount the business gets back from an investment and the amount invested.