If you work in project management or are in the middle of its implementation, there is an element that you will have to go through: the project feasibility study. This study is in the form of a document.
How to do a study? How to carry out a project feasibility study? What tools and software can you use to make this document? This is what we are going to look at today in this new article.
What is a project feasibility study?
A project feasibility study consists of study the relevance of a project as well as economic or organizational consequences that it may bring.
Many projects can lead to the realization of a feasibility study. You may have decided to start a new business, launch a new product or service, etc.
The feasibility study will allow you todraw up a business plan for you ensure profitability and some sustainability of your project. But also to know what return on investment to expect or what selling price to offer.
In which cases to set up a feasibility study of a project?
We cannot embark on a project with our eyes closed and simply hope that everything will go well.
In fact, if you are in the creation of a project, you need to make sure you have a return on investment or have the resources to set it up. You are right in the project management.
After having defined your project and its strategy, you will therefore have to study several points to define its feasibility.
Among the elements to study, you will have for example the goals to reachTHE resources as well as different steps for successful project management. It is also important to find the ideal project manager for your project.
The feasibility study of a project will also lead in most cases to carry out other studies for the implementation of your project such as:
- A market study : this element will notably take into account the industry in which your project takes place. You will need to study the market and your competitors to estimate your sales, your profitability and therefore the financial viability of your project.
- A POC : From the English “Proof Of Concept), the POC will allow you toanalyze and validate material, technical or human resources of the realization of your project.
- A business model : The business model makes it possible toanalyze the economic potential of your project and, linked to your market research, the potential profitability of the last.
It is generally by combining the data and results of market research, POC and business model that we manage to define the project life cycle. Now that you know what a feasibility study is, let’s find out what it should contain.
Who does the project feasibility study?
It is important to know who should be in charge of operations. The person who works on the implementation of a feasibility study is the director of the company or a service provider. Regarding the service provider, it may be a specialist project manager or a design office.
Be aware that a feasibility study comes in the form of a project management document.
What does a project feasibility study contain?
When carrying out the feasibility study of a project, we must look at different aspects: commercial, technical, financial and economic.
Take into account that depending on the nature of the project and the company, some sections may be more or less exhaustive and important.
For example, a project involving a new medical product will have much more impact and importance on society than a project to launch a new shoe brand.
Each of these components will make it possible to define the viability and the phases of the project from these different angles and to have a complete view to decide in fine to launch it. Let’s take a closer look at these different components:
Commercial feasibility study
The commercial feasibility study is the most common type of study. As its name suggests, this study focuses primarily on the commercial strategy of the new project.
This study will analyze different point of the projectwhose product or service, its place vis-à-vis the competition, its place on the market or its potential for profitability.
The technical feasibility study
The technical feasibility study focuses more, as its name suggests, on the technical parts of the project.
In particular, we must look the technological, legal, organizational, environmental and political aspects in force for this project.
The financial feasibility study
For the financial feasibility study, it is important to look at the budgeting aspects of the project. We are particularly interested here in human and material project costs, profits, profitability, etc.
The economic feasibility study
This phase focuses more on the economic impacts of the project. We take into consideration economic and fiscal policies and social impacts (on employment, the community, etc.).
The 8 steps to best carry out a project feasibility study
You now know the different information that a feasibility study of a project must contain, let’s now move on to the implementation stage.
#1. Hindsight and projection analysis
The first step in carrying out a feasibility study will be tocarry out a hindsight and projection analysis.
Let’s start with the retrospection. For this step, it isstudy the assets that the company already hasin particular via the previous projects that the company has already been able to set up.
Call on the experience that the company has already capitalized on, any feedback and the various failures and successes of past projects.
Then comes the phase of projection. Even strong of its past experiences, in any project, there remains a part of unknown. This is where a company must start using different tools to estimate the feasibility of its project.
Once the state of retrospection and projection has been established, we can then move on to the stage of framing the study.
#2. Framework of the study
During this step, you will need to list the actions to be carried out to carry out your project, plan the course of the study And form the study implementation team.
feel free to detail as much as possible the different stages and events of your project which will help you to have a guideline.
Moreover, take into account that a project can always have unforeseen events, which you can take into account in the planning and framing of your study.
#3. Analyze and collect feedback
The company’s project experience can help you determine the feasibility of your new project. To do this, study all the information in your possession such as: the budget, the management of time and resources, quality of execution or risk management.
#4. Operational results
The company’s past projects can also help you in your study. Consider the different costs (maintenance for example) and sales performance.
In many projects, it also happens that unforeseen events occur on the schedule, but at the level of the accounts. So plan, based on the experiences of your previous projects, a budget for contingencies.
#5. Key documents
Make an inventory of all the key documents of your company for the construction of this project. All documents can be useful, whether certificatesof Specificationsof reports (of expertise, financial, satisfaction, etc.) and audits. Again, the nature of the documents needed will depend on the nature of the project and your business.
#6. Further information
Collect all the additional information that may be useful for the realization of your project. Support your study with all possible documents, interviews or quotes.
If necessary, you can also call on experts or consultants who will help you set up your feasibility study. And then to collect all the documents that will help you bring your project to fruition.
#7. Prepare workshops
Organize workshops can be a very good idea to carry out your feasibility study. You can brainstorm and use several marketing tools, such as SWOT, PESTEL and work as a team to define the positioning and benefits of your project.
#8. Finalize the study
Once all these steps have been completed, collect all the information and integrate it into the different parts of your feasibility study (commercial, technical, financial and economic).
After all of this, you should be able to get an overview of your project. Then to determine its technical, social and economic feasibility…