What is feasibility study? Explain Technical, Economic, Legal, Operational, and Schedule feasibility in detail.
Feasibility study
Feasibility studies aim to objectively and rationally uncover the strengths and weaknesses of an existing business or proposed venture, opportunities and threats present in the environment, the resources required to carry through, and ultimately the prospects for success.In its simplest terms, the two criteria to judge feasibility are cost required and value to be attained.
A well-designed feasibility study should provide a historical background of the business or project, a description of the product or service, accounting statements, details of the operations and management, marketing research and policies, financial data, legal requirements and tax obligations.Generally, feasibility studies precede technical development and project implementation.
A feasibility study evaluates the project's potential for success; therefore, perceived objectivity is an important factor in the credibility of the study for potential investors and lending institutions.It must therefore be conducted with an objective, unbiased approach to provide information upon which decisions can be based.
The acronym TELOS refers to the five areas of feasibility - Technical, Economic, Legal, Operational, and Scheduling.
Legal Feasibility
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
Operational feasibility is the ability to utilize, support and perform the necessary tasks of a system or program. It includes everyone who creates, operates or uses the system. To be operationally feasible, the system must fulfill a need required by the business. Programs that reduce costs without reducing the quality of a product are an example of operational feasibility. Studies are performed to make sure that programs can be initiated in the current production facility, without the need for more equipment or staff. If there is a need for more room, machinery or personnel, the system needs to make an improvement in the way the product is perceived by consumers. This allows the added expense to manufacture the product because of the anticipated increase in sales and revenue. Economic feasibility is one portion of operational feasibility. Everyone involved in the manufacturing and use of the system, product or program needs to understand it and be able to use it in the manner it was designed to be used. Feasibility studies are done not only in the private business sector, but by all governmental organizations. If the changes made to a product or program are not understood by the end users, it is not considered feasible.
Economic Feasibility
The purpose of the economic feasibility assessment is to determine the positive economic benefits to the organization that the proposed system will provide. It includes quantification and identification of all the benefits expected. This assessment typically involves a cost/ benefits analysis.
Technical Feasibility
The technical feasibility assessment is focused on gaining an understanding of the present technical resources of the organization and their applicability to the expected needs of the proposed system. It is an evaluation of the hardware and software and how it meets the need of the proposed system.
Schedule Feasibility
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. It is necessary to determine whether the deadlines are mandatory or desirable.
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