Technology and System Feasibility
The assessment is based on an outline design of system requirements in terms of Input, Processes, Output, Fields, Programs, and Procedures. This can be quantified in terms of volumes of data, trends, frequency of updating, etc. in order to estimate whether the new system will perform adequately or not. Technological feasibility is carried out to determine whether the company has the capability, in terms of software, hardware, personnel and expertise, to handle the completion of the project. When writing a feasibility report the following should be taken to consideration:
A brief description of the business
The part of the business being examined
The human and economic factor
The possible solutions to the problems
At this level, the concern is whether the proposal is both technically and legally feasible (assuming moderate cost).
Economic analysis is the most frequently used method for evaluating the effectiveness of a new system. More commonly known as cost/benefit analysis, the procedure is to determine the benefits and savings that are expected from a candidate system and compare them with costs. If benefits outweigh costs, then the decision is made to design and implement the system. An entrepreneur must accurately weigh the cost versus benefits before taking an action.
Cost-based study: It is important to identify cost and benefit factors, which can be categorized as follows:
1. Development costs
2. Operating costs.
This is an analysis of the costs to be incurred in the system and the benefits derivable out of the system.
Time-based study: This is an analysis of the time required to achieve a return on investments. The future value of a project is also a factor.
Determines whether the proposed system conflicts with legal requirements, e.g. a data processing system must comply with the local Data Protection Acts.
Operational feasibility is a measure of how well a proposed system solves the problems, and takes advantage of the opportunities identified during scope definition and how it satisfies the requirements identified in the requirements analysis phase of system development.
A project will fail if it takes too long to be completed before it is useful. Typically this means estimating how long the system will take to develop, and if it can be completed in a given time period using some methods like payback period. Schedule feasibility is a measure of how reasonable the project timetable is. 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.
Market and Real Estate Feasibility
Market Feasibility Study typically involves testing geographic locations for a real estate development project, and usually involves parcels of real estate land. Developers often conduct market studies to determine the best location within a jurisdiction, and to test alternative land uses for given parcels. Jurisdictions often require developers to complete feasibility studies before they will approve a permit application for retail, commercial, industrial, manufacturing, housing, office or mixed-use project. Market Feasibility takes into account the importance of the business in the selected area.
In case of a new project, financial viability can be judged on the following parameters:
Total estimated cost of the project
Financing of the project in terms of its capital structure, debt equity ratio and promoter's share of total cost
Existing investment by the promoter in any other business
Projected cash flow and profitability
The feasibility study outputs the feasibility study report, a report detailing the evaluation criteria, the study findings, and the recommendations.