1. PROJECTPROJECT
FEASIBILITYFEASIBILITY
Organizational ImportanceOrganizational Importance
&&
Analysis TechniquesAnalysis Techniques
By Dr. Ali Sajid

2. PreamblePreamble
What is feasibility?What is feasibility?
Capable of being done withCapable of being done with meansmeans atat
hand andhand and circumstancescircumstances as they areas they are
Synonym ofSynonym of AchievabilityAchievability

3. For an organizationFor an organization
Feasibility is an important planning and organizingFeasibility is an important planning and organizing
procedure to make sure you project is effective andprocedure to make sure you project is effective and
will workwill work

4. Concept ofConcept of
Feasibility StudyFeasibility Study
 Feasibility study determines the likelihood of projectFeasibility study determines the likelihood of project
successsuccess
 It requires that all elements impacted by theIt requires that all elements impacted by the
proposed solution be studiedproposed solution be studied
Many projects fail because of unfeasibility andMany projects fail because of unfeasibility and
impossibility in their productive measuresimpossibility in their productive measures

5. Graphical AnalysisGraphical Analysis
Perceived and
Real Needs
List of Potential
and Ongoing
Projects
Current
Organizational
Environment
Existing and
Available
Resources
Evaluation
Criteria
Project
Selection
Decision
Decision Outcome
• Accept project
• Reject project
• Delay project
• Refocus project
• End-user
Development
• Proof of concept

6. The Basic StepsThe Basic Steps
for Processfor Process
First youFirst you planplan, then you, then you analyzeanalyze
 Planning your ProjectPlanning your Project
what should be made; the design; inputs and post prospectswhat should be made; the design; inputs and post prospects
 Analyzing the Feasibility (Possibility) of yourAnalyzing the Feasibility (Possibility) of your
ProjectProject
the project has possibility for completion; will it be successfulthe project has possibility for completion; will it be successful

7. The First StepThe First Step
PROJECT PLANNINGPROJECT PLANNING
When you decide to go to college, you formulate a planWhen you decide to go to college, you formulate a plan
When you want to buy a home, you develop a planWhen you want to buy a home, you develop a plan
When you decide to start a family, you establish a planWhen you decide to start a family, you establish a plan
Why then would you invest millions of dollars in a project without a plan?Why then would you invest millions of dollars in a project without a plan?

8. FOREWORDFOREWORD
For any project to take an initiative, Planning is the firstFor any project to take an initiative, Planning is the first
and vital stepand vital step
Definition:Definition:
an act of formulating a program for a definitean act of formulating a program for a definite
course of action; also a process of drawing layouts forcourse of action; also a process of drawing layouts for
some project or enterprisesome project or enterprise

9. Developing Project PlanDeveloping Project Plan
• Use project plans to coordinate rather than to control.
• Make use of different personalities within the project
environment.
• Prescheduled frequent revisions to project plans.
• Empower workers to estimate their own work.
• Describe value-creating tasks rather than activities.
• Define specific and tangible milestones.
• Use check lists, matrices, and other supplements to project
plans

10. Factors involving Project PlanFactors involving Project Plan
In the initial stage of project planning, the internal andIn the initial stage of project planning, the internal and
external factors that influence the project should beexternal factors that influence the project should be
determined and given priority weightsdetermined and given priority weights
The Influences include:The Influences include:
Internal Factors-Internal Factors-
factors within the premises of the organizationfactors within the premises of the organization
External Factors-External Factors-
factors involving the clients and the marketfactors involving the clients and the market

11. Internal FactorsInternal Factors
InfrastructureInfrastructure
Project scopeProject scope
Labor relationsLabor relations
Project locationProject location
Project leadershipProject leadership
Organizational goalOrganizational goal
Management approachManagement approach
Technical manpower supplyTechnical manpower supply
Resource and capital availabilityResource and capital availability
External FactorsExternal Factors
Public needsPublic needs
Market needsMarket needs
National goalsNational goals
Industry stabilityIndustry stability
State of technologyState of technology
Industrial competitorsIndustrial competitors
Government regulationsGovernment regulations

12. Project Execution PlanProject Execution Plan
Planning is an ongoing process that is conducted throughout thePlanning is an ongoing process that is conducted throughout the
project life cycle.project life cycle.
The basic components of a project plan are discussed below:-The basic components of a project plan are discussed below:-
 Outline of Project Plan-Outline of Project Plan-
This is a brief description of what is plannedThis is a brief description of what is planned
 Approach-Approach-
The managerial and technical methodologies of implementing the projectThe managerial and technical methodologies of implementing the project
should be specifiedshould be specified
 ObjectivesObjectives--
The objectives should be very detailed in outlining what the project isThe objectives should be very detailed in outlining what the project is
expected to achieveexpected to achieve

13. Project Execution PlanProject Execution Plan contd…contd…
 Policies and Procedures-Policies and Procedures-
Development of a project policy involving general guidelines for carrying outDevelopment of a project policy involving general guidelines for carrying out
projectproject
 Contractual Requirements-Contractual Requirements-
The portion of the project plan should outline reporting requirementsThe portion of the project plan should outline reporting requirements
 Project Schedule-Project Schedule-
The project schedule signifies the commitment of resource against time inThe project schedule signifies the commitment of resource against time in
pursuit of project objectivespursuit of project objectives
 Resource RequirementsResource Requirements
Project resources, budget, and costs are to be documented in this section ofProject resources, budget, and costs are to be documented in this section of
the project planthe project plan

14. Project Execution PlanProject Execution Plan contd…contd…
 Performance Measures-Performance Measures-
Measures of evaluating project progress should be developedMeasures of evaluating project progress should be developed
 Contingency Plans-Contingency Plans-
Courses of actions to be taken in the case of undesirable events should beCourses of actions to be taken in the case of undesirable events should be
predeterminedpredetermined
 Tracking, Reporting, and Auditing-Tracking, Reporting, and Auditing-
These involve keeping track of the project plans, evaluating tasks, andThese involve keeping track of the project plans, evaluating tasks, and
scrutinizing the records of the projectscrutinizing the records of the project

15. The Second StepThe Second Step
FEASIBILITY ANALYSISFEASIBILITY ANALYSIS

16. PreludePrelude
The most important step in any projectThe most important step in any project
after a project plan should beafter a project plan should be
determining the viability of the ideadetermining the viability of the idea

17. Importance of AnalysisImportance of Analysis
 An effective feasibility analysis will provide theAn effective feasibility analysis will provide the
client with a solid foundation upon which aclient with a solid foundation upon which a
project is built.project is built.
 A feasibility study provides conceptA feasibility study provides concept
identification, estimates of supportable market,identification, estimates of supportable market,
design parameters, attendancedesign parameters, attendance
estimates, revenue projections, andestimates, revenue projections, and
net warranted investment.net warranted investment.
 It essentially becomes a road mapIt essentially becomes a road map
for your projectfor your project

18. An Overview of the StudyAn Overview of the Study
The feasibility study involvesThe feasibility study involves 
 Appraisal of existing systems and manual processes.Appraisal of existing systems and manual processes.
 Troubleshooting.Troubleshooting.
 Process re-engineering.Process re-engineering.
 Risk analysis and assessment.Risk analysis and assessment.
 Risk management.Risk management.
 Cost-benefit analysis.Cost-benefit analysis.
 Impact analysis.Impact analysis.
 Integration of existing and new systems.Integration of existing and new systems.
 Resource requirements Planning and timings.Resource requirements Planning and timings.
 Implementation strategy.Implementation strategy.
 Infrastructure assessment and requirements.Infrastructure assessment and requirements.
 Dependencies and requirements.Dependencies and requirements.

Support requirements and logistical analysisSupport requirements and logistical analysis

19. Process of AnalysisProcess of Analysis
Identify
problem or
opportunity
Set up
feasibility
study
Define scope
and
objectives
Carry out
different
aspects
of the study
Recommend –
proceed
/shelve
Evaluate
alternatives –
develop/buy

20. THE PROCESS OFTHE PROCESS OF
FEASIBILITYFEASIBILITY ANALYSISANALYSIS
The basic tests for feasibility are as follows:The basic tests for feasibility are as follows:
A.A. Technical FeasibilityTechnical Feasibility
B.B. Managerial FeasibilityManagerial Feasibility
C.C. Economic FeasibilityEconomic Feasibility
D.D. Financial FeasibilityFinancial Feasibility
E.E. Cultural FeasibilityCultural Feasibility
F.F. Social FeasibilitySocial Feasibility
G.G. Safety FeasibilitySafety Feasibility
H.H. Political FeasibilityPolitical Feasibility
I.I. Environmental FeasibilityEnvironmental Feasibility
J.J. Market FeasibilityMarket Feasibility

21. THE PROCESS OFTHE PROCESS OF
FEASIBILITYFEASIBILITY ANALYSISANALYSIS
The basic tests for feasibility are as follows:The basic tests for feasibility are as follows:
A.A. Technical FeasibilityTechnical Feasibility
B.B. Managerial FeasibilityManagerial Feasibility
C.C. Economic FeasibilityEconomic Feasibility
D.D. Financial FeasibilityFinancial Feasibility
E.E. Cultural FeasibilityCultural Feasibility
F.F. Social FeasibilitySocial Feasibility
G.G. Safety FeasibilitySafety Feasibility
H.H. Political FeasibilityPolitical Feasibility
I.I. Environmental FeasibilityEnvironmental Feasibility
J.J. Market FeasibilityMarket Feasibility

22. THE PROCESS DETAILSTHE PROCESS DETAILS started…started…
A.A. Technical Feasibility-Technical Feasibility-
The technical capability of the personnel as well as the capability of theThe technical capability of the personnel as well as the capability of the
available technology should be consideredavailable technology should be considered
B.B. Managerial Feasibility-Managerial Feasibility-
Managerial feasibility involves the capability of the infrastructure of aManagerial feasibility involves the capability of the infrastructure of a
process to achieve and sustain process improvementprocess to achieve and sustain process improvement
C.C. Economic Feasibility-Economic Feasibility-
This involves the feasibility of the proposed project to generate economicThis involves the feasibility of the proposed project to generate economic
benefits. Abenefits. A benefit-cost analysisbenefit-cost analysis and aand a breakeven analysisbreakeven analysis are importantare important
aspects of evaluating the economic feasibility of new industrial projectsaspects of evaluating the economic feasibility of new industrial projects

23. THE PROCESS DETAILSTHE PROCESS DETAILS goes on…goes on…
D.D. Financial Feasibility-Financial Feasibility-
Financial feasibility involves the capability of the project organization toFinancial feasibility involves the capability of the project organization to
raise the appropriate funds needed to implement the proposed projectraise the appropriate funds needed to implement the proposed project
(different from economic feasibility)(different from economic feasibility)
E.E. Cultural Feasibility-Cultural Feasibility-
Cultural feasibility deals with the compatibility of the proposed project withCultural feasibility deals with the compatibility of the proposed project with
cultural setup of the project environmentcultural setup of the project environment
F.F. Social Feasibility-Social Feasibility-
Social feasibility addresses the influences that a proposed project maySocial feasibility addresses the influences that a proposed project may
have on the social system in the project environmenthave on the social system in the project environment

24. THE PROCESS DETAILSTHE PROCESS DETAILS on and on…on and on…
G.G. Safety Feasibility-Safety Feasibility-
Safety feasibility is another important aspect that should be considered in projectSafety feasibility is another important aspect that should be considered in project
planning.planning.
It also refers to an analysis of whether the project is capable of being implementedIt also refers to an analysis of whether the project is capable of being implemented
and operated safely with minimal adverse effects on the environmentand operated safely with minimal adverse effects on the environment
H.H. Political Feasibility-Political Feasibility-
A politically feasible project may be referred to as a "politically correct project."A politically feasible project may be referred to as a "politically correct project."
Political considerations often dictate direction for a proposed projectPolitical considerations often dictate direction for a proposed project
I.I. Environmental Feasibility-Environmental Feasibility-
Concern must be shown and action must be taken to address any and allConcern must be shown and action must be taken to address any and all
environmental concerns raised or anticipatedenvironmental concerns raised or anticipated

25. THE PROCESS DETAILSTHE PROCESS DETAILS and on…and on…
J.J. Market Feasibility-Market Feasibility-
Another concern is market variability and impact on the project.Another concern is market variability and impact on the project.
This area should not be confused with the Economic FeasibilityThis area should not be confused with the Economic Feasibility
The market needs analysis to view the potential impacts of marketThe market needs analysis to view the potential impacts of market
demand, competitive activities, etc. and "divertible" market sharedemand, competitive activities, etc. and "divertible" market share
availableavailable

26. THE SCOPE OFTHE SCOPE OF
FEASIBILITYFEASIBILITY ANALYSISANALYSIS
The elements of feasibility analysis for a project should beThe elements of feasibility analysis for a project should be
covering the below:covering the below:
A.A. Need AnalysisNeed Analysis
B.B. Process WorkProcess Work
C.C. Engineering & DesignEngineering & Design
D.D. Cost EstimateCost Estimate
E.E. Financial AnalysisFinancial Analysis
F.F. Project ImpactsProject Impacts
G.G. Conclusions and RecommendationsConclusions and Recommendations

27. THE ELEMENTSTHE ELEMENTS started…started…
A.A. Need Analysis-Need Analysis-
This indicates recognition of a need for the project:This indicates recognition of a need for the project:
--Is the need significant enough to justify the proposed project?Is the need significant enough to justify the proposed project?
--Will the need still exist by the time the project is completed?Will the need still exist by the time the project is completed?
--What are the alternate means of satisfying the need?What are the alternate means of satisfying the need?
--What are the economic, social, environmental, and political impacts of the need?What are the economic, social, environmental, and political impacts of the need?
B.B. Process Work-Process Work-
This is the preliminary analysis done to find requirements satisfying the need.This is the preliminary analysis done to find requirements satisfying the need.
--The work may be performed by a consultant who is an expert in the project field.The work may be performed by a consultant who is an expert in the project field.
--The preliminary study often involves system models or prototypesThe preliminary study often involves system models or prototypes

28. C.C. Engineering & Design-Engineering & Design-
This involves a detailed technical study of the proposed projectThis involves a detailed technical study of the proposed project
--Written quotations are obtained from suppliers and subcontractors as needed.Written quotations are obtained from suppliers and subcontractors as needed.
--Technology capabilities are evaluated as neededTechnology capabilities are evaluated as needed
--Product design, if needed, should be done at this timeProduct design, if needed, should be done at this time
D.D. Cost Estimate-Cost Estimate-
This involves estimating project cost to a suitable level of accuracy.This involves estimating project cost to a suitable level of accuracy.
--Levels of around -5% to +15% are common at this level of a project plan.Levels of around -5% to +15% are common at this level of a project plan.
--Estimates of capital investment, recurring and nonrecurring costs must be thereEstimates of capital investment, recurring and nonrecurring costs must be there
--Sensitivity analysisSensitivity analysis can be carried out on the estimated cost values to see howcan be carried out on the estimated cost values to see how
sensitive the project plan is to the estimated cost valuessensitive the project plan is to the estimated cost values
THE ELEMENTSTHE ELEMENTS goes on…goes on…

29. E.E. Financial Analysis-Financial Analysis-
This involves an analysis of the cash flow profile of the projectThis involves an analysis of the cash flow profile of the project
--The analysis should consider rates of return, inflation, sources of capital, paybackThe analysis should consider rates of return, inflation, sources of capital, payback
periods, breakeven point, residual values, and sensitivityperiods, breakeven point, residual values, and sensitivity
--This is a critical analysis since it determines whether or not and when funds will beThis is a critical analysis since it determines whether or not and when funds will be
available to the projectavailable to the project
F.F. Project Impacts-Project Impacts-
This portion of the feasibility study provides an assessment of the impact of the proposedThis portion of the feasibility study provides an assessment of the impact of the proposed
projectproject
--Environmental, social, cultural, political, and economic impacts may be some of theEnvironmental, social, cultural, political, and economic impacts may be some of the
factors that will determine how a project is perceived by the publicfactors that will determine how a project is perceived by the public
THE ELEMENTSTHE ELEMENTS on and on…on and on…

30. G.G. Conclusions and Recommendations-Conclusions and Recommendations-
The feasibility study should end with the overall outcome of the projectThe feasibility study should end with the overall outcome of the project
--This may indicate an endorsement or disapproval of the project.This may indicate an endorsement or disapproval of the project.
--Recommendations on what should be done should be included in this section ofRecommendations on what should be done should be included in this section of
thethe
feasibility report.feasibility report.
THE ELEMENTSTHE ELEMENTS and on…and on…

31. TheThe AnalysisAnalysis ofof BenefitsBenefits
The Benefits can be of two types:The Benefits can be of two types:
1.1. TheThe TangibleTangible BenefitsBenefits
casuallycasually  A physical matter that can be touchedA physical matter that can be touched
isis tangibletangible
2.2. TheThe IntangibleIntangible BenefitsBenefits

32. TangibleTangible BenefitsBenefits
• Fewer processing errors
• Increased throughput (ratio of output to input)
• Decreased response time
• Elimination of job steps
• Increased sales
• Reduced credit losses
• Reduced expenses

33. IntangibleIntangible BenefitsBenefits
• Improved customer goodwill
• Improved employee morale
• Better service to community
• Better decision-making

34. Potential BarriersPotential Barriers
Many reasons can make your project impossible:
‡ Old, poor means of technology
‡ Lacking effective leadership
‡ Lacking communication
‡ Very low on funds
‡ The project is not necessitated in the market

35. SummationSummation
Feasibility analysis determines the likelihood of projectFeasibility analysis determines the likelihood of project
successsuccess
Clients most commonly employ your consultants during theClients most commonly employ your consultants during the
feasibility stage of a projectfeasibility stage of a project
Significant value is in the determination of exactly what isSignificant value is in the determination of exactly what is
feasible and what is not, and not just for the moment in hand,feasible and what is not, and not just for the moment in hand,
but also for the future as the business grows and technologybut also for the future as the business grows and technology
advancesadvances