Feasibility Analysis By: Professor Wilmer Arellano

"Prevention is better than cure" is hardly practiced and it is only when a surprise boils into a crisis that managers react. Hariharan Controller Perstorp Aegis Chemicals Pvt Ltd.

Overview Feasibility Definitions Goals Types of Feasibility Feasibility Assessment 1 to 5 Score Weighted Score Pugh’s Method Risk

Definitions for Feasibility The quality of being doable WordNet® 2.1, © 2005 Princeton University A feasibility study is: a detailed analysis of a company and its operations that is conducted in order to predict the results of a specific future course of action. study-2

Goals Will the project be a success? The objective of a feasibility study is: To find out if a project can be done:

Types of Feasibility Technical Resource Economic Schedule Operational Cultural Legal Marketing

Technical Feasibility Is the project possible with current technology? Does the technology exist at all? Is it available locally? Can it be obtained? Are fundamentally new inventions required? How much Technical Risk is there?

Resource Feasibility Do we have sufficient skills? Do we have sufficient equipment? Do we have sufficient number of people? How much Resource Risk is there?

Economic Feasibility Is the project possible, given resource constraints? What benefits will result from the system? Both tangible and intangible benefits Quantify them! What are the development and operational costs? Are the benefits worth the costs? How much Economic Risk is there?

Economic Feasibility Tangible Benefits Readily quantified as $ values, examples: increased sales cost/error reductions increased throughput/efficiency increased margin on sales more effective use of staff time Intangible benefits Difficult to quantify, but maybe more important, examples: increased flexibility of operation higher quality products/services better customer relations improved staff morale

Schedule Feasibility What are the chances of meeting the intermediate mileposts? What are the chances of meeting the PDR (Preliminary Design Review) requirements? What are the chances of meeting the CDR (Critical Design Review) requirements?

Feasibility Analysis The PDR is a multi-disciplined technical review to ensure that the system under review can proceed into detailed design, and can meet the stated performance requirements within cost (program budget), schedule (program schedule), risk, and other system constraints. The CDR is a multi-disciplined technical review to ensure that the system under review can proceed into system fabrication, demonstration, and test; and can meet the stated performance requirements within cost (program budget), schedule (program schedule), risk, and other system constraints. R &Exp=Y

Operational Feasibility Urgency of the problem and the acceptability of any solution: If the system is developed, will it be used?

Cultural Feasibility Social acceptability? Will there be a positive impact on the local culture. Will there be a positive impact on general culture. Potential labor objections? Manager resistance?

Legal Feasibility Organizational conflicts and policies? Laws or regulations impeding the Project? Laws of regulation limiting the project

Marketing Feasibility Will the general public accept the product?

Feasibility Assessment Feasibility is Measured Against Attributes 1 to 5 Scale. By using a scale we can obtain information of the possible causes for failure Weighted Scale. Same as 1 to 5 scale the different attributes contribute to the total in different proportion. Pugh’s Method. All attributes has the same weight. Count + vs. –

1 to 5 Scale Example This is not a template, use your own attributes

Weighted Scale Example This is not a template, use your own attributes

Obtaining Weights

Pugh’s Method Example This is not a template, use your own attributes

Risk The possibility of suffering loss Risk involves uncertainty and loss: Uncertainty: The degree of certainty about whether the risk will happen. Loss: If the risk becomes a reality, unwanted consequences or losses will occur.

Risk Categories Technical Resource Economic Schedule Operational Cultural Legal Marketing

Proactive Risk Management “The purpose of risk management is to identify potential problems before they occur so that action can be taken to reduce or eliminate the likelihood and/or impact of these problems should they occur.”

Risk Assessment Risk Exposure Matrix Clear and well defined risk acceptance thresholds are required in order to define the level of risk that can be tolerated. The Exposure Matrix can be used to prevent entering into a project You may use a fishbone diagram to discover risks

Risk Management In ongoing projects, the Exposure Matrix can be used to as a managing tool Class I: Risks that are below the risk acceptance threshold and do not require active management Class II: Risks that lie on the risk acceptance threshold and require active monitoring Class III: Risks that exceed the risk acceptance threshold and require proactive management Class IV: Risks that significantly exceed the risk acceptance threshold and urgent and immediate attention

Fault Tree Analysis

Continuous Risk Management

References feasibility.pdf Dorofee, A. J., Walker, J. A., Alberts, C. J., Higuera, R. P., Murray, T. J., and Williams, R. J. Continuous Risk Management Guidebook. Pressman, R. S Software Engineering: A Practitioner’s Approach. New York, USA: McGraw Hill. Risk analysis and management guidance June 2005,

Review Definitions Goals Types of feasibility Feasibility Assessment 1 to 5 Score Weighted Score Pugh’s Method Risk

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