When a project is proposed, an important first step towards actualizing it is to assess the value, plausibility and potential of the activity. A feasibility study involves an in-depth exploration that looks at every aspect of the project, aiming to generate an objective picture of the costs, benefits and risks before going ahead. Feasibility studies may also be undertaken for ongoing projects or ventures, to determine whether they are still realistic.
The five principle areas of feasibility are technical (or technological), economic, legal, operational (or organizational) and scheduling, often denoted by the acronym TELOS.
Technical/Technological: Is the project technically feasible? Given an outline of the technical capabilities of the organization, including the availability of skilled staff and appropriate facilities.
Economical: The project affordable given the economic resources available? Even if it can be afforded, is the projected return on investment (ROI) sufficient? A project that is simply too expensive and which doesn’t offer sufficient economic benefits is not feasible.
- Feasibility studies ensure that a project is realistic and has potential.
- A feasibility study must be thorough, unbiased and objective.
- Five key areas of a feasibility study are technical, economic, legal, operational and scheduling.
Legal: Is the proposed venture in compliance with applicable laws and regulations?
Operational/Organizational: Is the project in line with the operations and objectives of the organization?
Schedule: Given the recommended schedule, is it realistic to expect that the project will be completed on time? If the project takes too long to complete, costs can escalate and the overall feasibility can be negatively affected.
Additional factors that can affect a project’s feasibility include:
Cultural Feasibility: this can include aspects such as environmental impact, compatibility with local mores, etc.)
Real Estate/Market Feasibility: When the project involves a real estate development, market testing must be conducted in the geographical area where the development is proposed. Many jurisdictions require that a feasibility study be conducted before development can begin, especially if a permit is required for retail or other business-related developments.
Resource Feasibility: This aspect looks at the resources that are required to complete the project and whether the amount of available resources are sufficient to complete the project effectively.