Before committing time, energy, and resources to a new project, PMs and executives want to know: Can this project succeed? And even if the project is successful, will the outcomes justify the cost and effort it took to achieve them? These questions, and ultimately the fate of the project, can be determined through a feasibility study.
So, what is a feasibility study? In this article we’re answering that question, and we’re also examining how to do a feasibility study to help you and your management team make better informed decisions regarding which projects get funded and which get tabled or scrapped altogether.
What is a feasibility study?
A feasibility study analyzes the practicality of a proposed project and assesses how likely the project is to succeed. Typically, feasibility studies are prepared for executives who will decide whether to greenlight the project based on the feasibility analysis. Feasibility studies identify key project goals and relevant factors, examine the market research, and detail the resources and budget needed to successfully execute the project.
The seven feasibility study steps
Feasibility studies should include the following steps:
- Preliminary analysis
Just as the feasibility study determines whether a proposed project is worth the effort, the preliminary analysis determines whether the feasibility study itself is justified. The fact is that conducting a feasibility study is an intensive, time-consuming process, and the preliminary analysis will look to uncover any roadblocks that would render the feasibility study useless.
- Defining the scope
Before you can determine the potential impact of a project, you have to get clear on the project’s scope. This includes defining the project’s goals, tasks, phases, costs, deliverables, and deadlines. The project scope also identifies internal stakeholders as well as external clients and customers.
- Market research
Is there demand for this particular venture in the market it seeks to serve? This is critical information to know before committing to a project, and it’s precisely what market research seeks to answer. Market research also gives insight into the current competitive landscape and helps identify factors like geographic influence on the market, the market’s overall value, and its demographics.
- Financial assessment
Naturally, the feasibility study will break down and analyze the financial costs and risks involved with the project. Costs may include human resources, equipment, material, software, hardware, facilities, and third-party services. Additionally, the financial assessment will look at the potential impact that project failure will have on the bottom line.
- Roadblocks and alternative solutions
What are the potential problems and circumstances that could lead to project delays or even failure? What are some alternative solutions that would circumvent those problems? Most feasibility studies will include an assessment of these factors, too.
At this step, you should seek a reassessment of the entire feasibility study from top to bottom by a fellow PM, a manager, or someone else in your organization. Having a fresh set of eyes on the study will help ensure you don’t miss any key elements or miscalculate potential project impacts.
- Go or no-go decision
When it’s all said and done, the feasibility study comes down to one decision: Is the project approved to move forward or not?
What are the best practices of a feasibility analysis?
In order to make sure you get the most from your feasibility study, there are a few best practices you can follow. For instance, soliciting feedback from seasoned colleagues or managers can give you insight into the factors you have listed, and help you fill in elements you hadn’t considered. Additionally, you’ll want to verify the data and intel you’ve collected to make sure it’s accurate.
Another best practice is to follow a feasibility analysis template so that you don’t have to reinvent the wheel with each project. If your organization conducts projects regularly, then you can probably access a feasibility study example or template to work from.
What should be included in a feasibility report?
After conducting the necessary research, performing your due diligence, and compiling all the data, it’s time to put together the feasibility report. The core elements of this analysis may vary slightly depending on the type of project you’re undertaking, but they’ll generally include:
- The executive summary
- Technological considerations and requirements
- Existing marketplace assessment
- Marketing strategy
- Resources and staffing
- Project timeline and schedule
- Findings and recommendations
How Wrike helps you with your feasibility analysis
When conducting a feasibility study, it helps to have a single, centralized source for filing and organizing all the data you collect, the analyses and impact statements you prepare, and all the other resources and references you compile in the course of the study. With Wrike, not only will you have a dedicated space for each project you undertake, but you’ll be able to share your feasibility reports easily with team members, managers, executives, and stakeholders who will weigh in on or be impacted by the project.
To see all the ways in which Wrike can help you with feasibility reports and project management in your organization, start your free trial today!