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The Feasibility study

Researching the Business Drivers

A project is not typically considered viable if its value exceeds its costs. Sometimes the cost viability of a project can change over the course of the project’s development or implementation.
For example, if you have a particular amount of money designated for a project, and it appears actual costs will exceed the budget, the project is likely to lose its viability. Many factors can impact costs, such as an increase in the cost of supplies or materials or the scope of the project.

  • Confirm the Alternative Solutions
    • Once we have a clear understanding of the business problem that the project addresses, we need to understand the alternative solutions available. For example, if it is an IT system that is outdated, then your alternative solutions might include redeveloping the existing system, replacing it or merging it with another system. Only with a clear understanding of the alternative solutions to the business problem, can we progress with the Feasibility Study.
  • Determine the Feasibility
    • HGT need to identify the feasibility of each solution. The question we ask of each alternative solution is “can we deliver it on time and under budget?” To answer this question, HGT need to use a variety of methods to assess the feasibility of each solution. Here are some examples of ways we assess feasibility:
      Research: Perform online research to see if other companies have implemented the same solutions and how they got on.
      Prototyping: We identify the part of the solution that has the highest risk, and then build a sample of it to see if it’s possible to create.
      Time-boxing: We complete some of the tasks in the project plan and measure how long it took vs. planned. If we delivered it on time, then we know that our planning is quite accurate.
  • Preferred Solution
    •  With the feasibility of each alternative solution known, the next step is to select a preferred solution to be delivered. The most feasible to implement, with the lowest risk, and the highest confidence of delivering. With that done, HGT have a high degree of confidence that we can deliver that solution on time and under budget.

    Feasibility study

    Preparing a Projected Income Statement

    Working backwards. We start with what qw expect the income from the project to be and then what investment is needed to achieve that goal. This is the foundation of an income statement. Things qw ake into account here include what services are required and how much they’ll cost, any adjustments to revenues, such as reimbursements, etc.

    Prepare an Opening Day Balance Sheet

    This includes an estimate of the assets and liabilities, one that should be as accurate as possible. To do this, we create a list that includes item, source, cost and available financing. Liabilities we consider are such things as leasing or purchasing of land, buildings and equipment, financing for assets and accounts receivables.

    Review and Analyze All Data

    We re-examine our previous steps, such as the income statement, and compare it with our expenses and liabilities. Is it still realistic? We perform a risk analysis, analyzing and managing the risks, and come up with any contingency plans.
    If the commitment is worth the time, effort and money and is it aligned with HGT’s strategic goals and long-term aspirations, we are able to submit a go or no go decision.

    Go or No Go

    This is the point we make a decision about whether the project is feasible or not. That sounds simple, but all the previous steps were leading to this decision-making moment. A couple of other things we consider before making that binary choice is whether the commitment is worth the time, effort and money and is it aligned with the organization’s strategic goals and long-term aspirations.