Feasibility Study Template: How to Assess Project Viability
Table of Contents
- What is Project Feasibility Study?
- 6 Key Sections of Feasibility Study
- 5 Factors that Determine Project Viability
A feasibility study template is an invaluable and convenient project management tool that helps businesses research and assess the risks associated with a proposed project or operation. Writing a comprehensive feasibility study template is the ultimate responsibility of project managers and the relevant department. This document requires in-depth research and insight into existing corporate practices and problems and also knowledge of how different solutions will affect a particular business environment.
In this guide, we are exploring these topics:
- Feasibility Study Definition
- Key Section of Feasibility Study
- 5 Factors that Impact Project Viability
The following below Feasibility Study Template outlines the definition and the key sections of a feasibility analysis. This template aims to help you reduce document preparation pressures and develop project feasibility assessment standards for your organization.
What is Project Feasibility Study?
In project management, feasibility study (also known as feasibility analysis) is an in-depth analysis of the viability of a project or product idea. It is an initial risk assessment document that outlines a preliminary study undertaken to determine a project’s/product’s viability and help decision makers figure out whether to proceed with the project or not. It proves whether the project would create a technically and economically feasible concept upon its successful implementation.
The results outlined in the feasibility analysis document help determine whether the project would develop and deliver under a set of risks and assumptions related to technology, human resources, facilities and equipment, finance and budgeting, political feasibility, and legal and contractual aspects.
For example, in content-rich website projects the feasibility of results often depends on the quality of online essay writing service and outsourced content writing.
6 Key Sections of Feasibility Study
A typical feasibility study template consists of the following sections:
- Executive Summary
- Cost-Benefit Analysis
1. Executive Summary
The Executive Summary is not a required section for all feasibility study templates, especially for those having relatively short content and easy concepts. The section provides a general description of the feasibility study for the target audience. It should be written on a single page and after all other sections of the study are completed.
The Executive Summary should create a summary of the following issues:
- The problem analyzed in the feasibility study
- The business objectives supported by the study
- Organizational impact
- Process impact
- Expected costs and benefits
- Anticipated risks
- Start writing the Executive Summary after completing all the sections of your feasibility study
- Summarize the findings of the feasibility study
- Be ready to spend 1-2 hours for this work
- Try to write the text in several paragraphs, on a single page
The Introduction section of most feasibility study templates aims to provide a general statement about the overall objectives and content of the feasibility document. This section should contain at least two topics – Purpose and Target Audience. It may also highlight other topics or sub-sections, such as Project Description, Solution Background, Assumptions & Constraints, References, etc.
- The Purpose topic provides a short description of the drivers for creating the document and the desired outcome to be received.
- The Target Audience sub-section states about the particular group of people who are identified as the intended readers and recipients of the feasibility study document.
- Create an overview of the factors that define the need for carrying out the feasibility study
- Identify who will be the readers of the document
- Write the Purpose and the Target Audience
- Summarize all other topics (if any) which are part of the Introduction section
- Dedicate about 8-10 hours to writing the Introduction section, including all sub-sections
This section provides a detailed assessment of the reason and motivation for carrying out the feasibility and option analysis. It contains a more detailed treatment of the drivers outlined in the Purpose sub-section and thus further contextualizes these drivers. The introduction to the Justification section should be short, no more than 3-4 paragraphs on a single page. It should provide a summary of the justification process and its objectives.
The following topics or sub-sections should be included the Justification section of a feasibility study template:
- Problem Statement – a description of the key problem being researched in the document
- Organizational Impact – a description of how the problem will affect the organization
- Business Impact – a narrative about the impact the problem has on the business divisions, resources, workforce, and other units and components of the organization’s business environment
- Process Impact – a detailed list of business processes affected by the process
- Solution Objectives – a description of the benefits to be received and the costs to be incurred, as a result of solving the problem
- Write your Introduction to the Justification section using simple words and placing the focus on describing the characteristics of the justification process rather than on how to perform this process
- Have a detailed analysis of the business activities of your organization before staring writing the section
- Be ready to dedicate 15-18 hours to writing the Justification section
This section of a feasibility study template contains a summary of the proposed solution. It often re-states the benefits and costs of the solution. But the main focus is put on describing how the solution can improve the organization’s environment. In addition to the improvements, the [Proposed] Solution section should provide an overview of the solution’s functionality and features and should also outline the impact the solution will have.
The Solution section of most feasibility study templates highlights the same topics or sub-sections as the Justification, but this time it relates to how exactly the solution will impact those areas (Organizational, Business, Process, others).
- Use the structure of the Justification section to write the Proposed Solution
- Summarize the characteristics of your solution
- Keep your narrative informative, comprehensive and complete
- Be ready to spend about 20-25 hours on writing content for this section
The Alternatives section describes what alternative solutions have been considered and compared to the proposed solution. It states about the options that have a similar impact on the problem as the proposed solution but for some reasons they have been missed and not selected. In any feasibility study report this section should highlight the key differences (in terms of effect, costs or/and benefits) between each solution.
- Use a cost-benefit analysis
- Design a comparison matrix to summarize the differences between alternative solutions
- Dedicate 7-9 hours to this job
6. Cost-Benefit Analysis
This section of a feasibility study template provides a description of the approach and tools used in the study to carry out a cost-benefit analysis. The purpose is to provide a comparison between the present value of the solution and its initial cost. This comparison is often called a “cost-benefit ratio“.
The section provides valued information for solution approval and further decision making. It should justify the proposed solution through some calculations and indicators. Many feasibility study templates include these values:
- Net Present Value (NPV)
- Return on Investment (ROI)
- Payback Period (PP)
- Select an approach and tools for carrying out a cost-benefit analysis for the proposed solution as well as the alternative solutions
- Calculate a cost-benefit ratio
- Define and select values (e.g. ROI, NPV, PP) you will use in justifying the proposed solution
- Dedicate 10-12 hours.
Based on the finding of your feasibility assessment, create a short report and include it in your project kick-off meeting agenda.
5 Factors that Determine Project Viability
Conducting a project feasibility analysis is difficult, complex, and time consuming. However, this activity is critical to project success because it results in a well-grounded decision whether to start a project or not. According to PMI, 21% of IT projects were cancelled before they were completed due to insufficient risk and feasibility assessment at the planning stage.
We define five key factors that impact the feasibility of a project, as follows:
- Economic Feasibility
- Technical Feasibility
- Operational Feasibility
- Schedule Feasibility
- Contractual Feasibility
In project management, there are several techniques for financial feasibility assessment like cost-benefit analysis and break-even analysis, but the 2 basic approaches are bottom-up and top-down.
- Bottom-up approach: we break down a large amount of work (tasks) into small, measurable pieces, then estimate every piece in dollar value, and add the estimates together. We accumulate cost estimates from the people responsible for various tasks in our project. These people are supposed to be experts in what they do.
- Top-down approach: we talk to senior management and business analysts about their expectations on the range of project expenses and conduct a business analysis to come up with an estimate that can cover feasible outcomes of the project
Conducting a technical feasibility study aims to evaluate whether the new system being utilized for delivering the project will develop adequately and whether the performing organization has sufficient tech talent and competences to build a proposed system or not.
The technical assessment covers information technology, software and security issues. It helps answer the questions whether a proposed technology solution is needed for the project, how difficult it will be to build it, and whether the organization has enough IT expertise and knowledge using that technology.
For example, when your project develops an IT system, the key tasks of your technical feasibility analysis template will be investigating and comparing technology providers and determining reliability and competitiveness of that system. Also, you want to identify the assumptions and constraints of the technology being utilized in the project and assess the risks and uncertainties of the proposed system. Your study will explore the size and complexity of the system and will compare it with the similar systems.
Analyzing operational feasibility is to gain an understanding of whether the proposed project will solve the business problem or not. The operational feasibility study explores how the project will fit into the current day-to-day operations of the performing organization.
Besides, operational feasibility helps the project manager or the relevant department with the performing organization to find out whether the current work practices and procedures support the project development process and how changes in the project can affect the organization and its day-to-day operation.
A schedule feasibility template usually explores the duration of the project and answers the question whether the project is too long to be complete before it is successful.
Project schedule feasibility estimates how much time the team will need to deliver the project and whether all potential deadlines and timeframes can be met, as well as whether following these schedules will be sufficient for dealing with the needs of the organization.
Also, it is important to determine whether the schedules are mandatory or desirable. For example, in your IT project you schedule a preferable deadline for delivering a properly functioning software system. You understand that this deadline can be unmet because the project team needs more time to test the functionality and develop an error-free version. A missed deadline is bad, but inadequate functionality is worse.
A contractual feasibility study determines whether the proposed project complies with the legal and contractual requirements or not.
For example, your eCommerce portal collects users’ sensitive and personal data (name, email, IP address, credit card details) and you need to make sure that your data collection policy does not conflict with the requirements of the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR, EU 2016/679).
Another example is employee monitoring. When you want to adopt a system for monitoring employees’ computers and their activity on the Web, you should advise your employees of that fact and have all employees sign an acknowledgment. This kind of project is legally feasible when there is no question about whether your employees have any expectation of privacy on their office desktops and laptops.