Table of Contents
2 Business Problem or Opportunity
2.1 Current State of the Enterprise and the Competitive Environment
3.2 Solution Evaluation Criteria
5.1 Option 1 – [Solution Option Name]
5.1.8 Assumptions and Constraints.
6 Summary, Conclusion and Recommendations
The Feasibility Study
The Purpose of the Feasibility Study
Feasibility studies are analysis efforts that apply the disciplines of market research and statistical analysis to understand the competitive environment, enabling organizations to make sound decisions about improvements and new ventures. Formal feasibility studies involve a systematic collection and analysis of data about the market and its preferences, opinions, trends, and plans used for corporate decision making. In practice, feasibility studies use verifiable information and apply statistical measures to ensure a complete and accurate analysis of the information gathered.
When do I use a Feasibility Study?
Feasibility studies are often used to crystallize new business opportunities or solve a business problem, identify alternative solution options to close the gap between the current and future state of the business, and to determine the best solution option to pursue in any of these cases.
Most often, a feasibility study is commissioned to determine the viability of an idea for a new business opportunity. In the strategic planning phase of the business solution life cycle (BSLC), feasibility studies may provide information to the strategic planning process when executives are developing strategic plans, goals, and themes to achieve the future vision.
In the enterprise analysis phase of the BSLC, feasibility studies are often used to help the portfolio management team determine the best investment path to solve business problems and seize new business opportunities. During the requirements and design phases of the BSLC, feasibility studies may be used to help conduct trade-off analysis among solution alternatives.
Steps to Prepare the Feasibility Study
The basic steps to complete a feasibility study may vary somewhat, but in general they are as follows:
Determine the business drivers for the study: either abusiness problem or a new business opportunity
Plan the feasibility study effort
Determine the current state of the enterprise
Determine solution options
Conduct a feasibility analysis for each option
Prepare a feasibility study report
Who Prepares the Feasibility Study Report?
Authors of the feasibility study report can vary widely across organizations. However, basic roles should include the following:
Lead author: senior business analyst or manager- Supporting authors: subject matter experts enlisted by the lead author to participate in the business analysis activities (e.g., project manager, IT manager, business visionary, financial analyst, researchers)
- Key stakeholders: those who are likely to be impacted by the initiative
How to Use This Template
This document provides a guide on the topics usually included in a feasibility study report. Add, remove, or redefine sections as necessary to meet your particular business circumstances. Example tables, diagrams, and charts are included to provide further guidance on how to complete each relevant section.
Executive Summary
Summarize information and findings from each of the sections in this document.
Business Problem or Opportunity
Current State of the Enterprise and the Competitive Environment
Describe the business environment in terms of all or part of these elements, depending on the nature and scope of the study:
- The business vision, strategy, goals, and measures
- The objectives of each business unit that has a stake in the area under study, and collect relevant organizational charts
- The physical location of each impacted business unit
- The major types of business information required
- Current business technology
- Current business processes relevant to this project
- The current business environment, including a competitive analysis, an analysis of market trends and emerging markets, new and emerging technologies, and recent changes in the regulatory environment
The Business Problem or Opportunity
Describe the business problem or new business opportunity. If the study has been commissioned to solve a business problem, reports typically include the following information:
- Document the problem in as much detail as possible.
- Determine the adverse impacts the problem is causing within the organization, and quantify the impacts in terms of lost revenue, inefficiencies, etc.
- Determine the immediacy of the resolution and the cost of doing nothing.
- Conduct a root-cause analysis to determine the underlying source of the issues.
- Determine the potential areas of study required to address the issues.
- Draft a requirements statement describing the business need for a solution.
If the study has been commissioned to take advantage of a new business opportunity, reports typically include the following information:
- Define the opportunity in as much detail as possible, including the events that led up to the discovery of the opportunity and the business benefits expected if the opportunity is pursued.
- Quantify the expected benefits in terms of increased revenue, reduced costs, etc.
- Determine the immediacy of the resolution and the cost of doing nothing.
- Identify the opportunity cost of pursuing this opportunity versus another under consideration.
- Determine the methodology or approach planned to conduct the study.
- Determine the potential areas of study required to understand the viability of the opportunity.
- Draft a requirements statement describing the business need for a solution.
Feasibility Study Process
Study Team Members
List members of the study team, and their subject matter expertise.
Describe the process used by the study team to complete the feasibility study, including:
- Decision criteria used to evaluate alternative solution options
- Business objectives the solution must satisfy
- Activities performed to complete the study
- Executive sponsor involvement
Solution Evaluation Criteria
Provide a list of the criteria used to evaluate the feasibility of each solution option.
Feasibility Study Methods
List the methods used to determine the feasibility of each option. Possible techniques include:
- Market surveys to prove acceptance and to forecast demand in the marketplace
- Technology feasibility assessment to ensure the solution is not beyond the current limits of technology
- Interviews
Business staff interviews to determine operational feasibility in the workplace- IT staff interviews to determine operational feasibility in the technical operating environment
- Finance staff and project manager interviews to estimate the cost of the solution option to ensure economic feasibility
- Prototyping to build a component of the proposed solution to prove that the highest-risk components of the proposed solution are technically feasible
- Risk identification, assessment, ranking, and response planning, captured in a risk log
- Competitive analysis to examine the viability of market success
- Environmental impact analysis
- Technology advancement analysis to examine the latest technical approaches to solving the business problem
- Early cost/benefit analysis (covered in greater detail in the business case)
- Comparative analysis for a COTS package
- Issue identification, assessment, ranking, and response planning, captured in an issues log
Solution Options
List all solution options that could potentially meet the objectives identified in the planning process; always include the option of doing nothing. Assess the likelihood of each option meeting the requirements. In addition, define the risks, issues, assumptions, and constraints associated with the feasibility of each option. Document the results as follows.
Alternative Assessment
This section provides a qualitative and quantitative evaluation, analysis, and comparison of all feasible options. Options suggested may include doing nothing, doing something that will achieve a result similar to current performance, or doing something that will achieve a better result than current performance. Include the following information for each solution option:
Option 1 – [Solution Option Name]
Description
Provide a detailed description of the option.
Feasibility Analysis
Describe the feasibility of the solution option by indicating the resource requirements, costs, assumptions, constraints, risks, business outcomes, and business benefits for the three phases: building or acquiring the solution option, implementing the solution option, and operating the solution option. Be sure to include information about the feasibility of the solution operations in both the business and technical environments.
Benefits
Describe the tangible and intangible benefits to the company expected upon implementation of the solution. One obvious benefit is that the solution will address the business problem or opportunity outlined above. The benefits given below are preliminary and will become more precise when writing the business case.
Costs
Describe the tangible and intangible costs to the company upon implementation of the solution. Include the costs of the actual project (e.g., procured equipment), as well as any negative impact to the business resulting from the delivery of the project (e.g., operational down time). The estimates given below are preliminary and will become more precise when writing the business case.
Risks
Summarize the most apparent risks associated with this solution option. Risks may be strategic, cultural, environmental, financial, operational, technical, industrial, competitive, or customer-related.
To complete this section thoroughly, it may be necessary to undertake a formal risk assessment by documenting a risk management plan. Define clear mitigation techniques or plans to reduce the likelihood and impact of each risk.
Issues
Summarize the highest priority issues associated with the adoption of this solution option. Issues are events that adversely affect the ability of the solution option to produce the required deliverables.
Assumptions and Constraints
List the major assumptions and constraints associated with the adoption of this solution option.
Summary, Conclusion, and Recommendations
Summarize the entire business case at a high level, revisit findings and conclusions, and close with recommendations.
Option Rankings
Identify the criteria by which each of the solution options was assessed. Then assign a rating for each criterion to determine a total score for each option.
Legend:
1. Customer Satisfaction: impact of project on external customers
2. Business Results: impact of project on strategic goals
3. Employee Satisfaction: impact of project on employee retention
4. Revenue: impact of project on increased revenue
5. Cost: low versus high cost to fund the project
6. Longevity: length of time the enterprise will benefit from the new product or service
7. Size of Investment: large versus small investment risk 8. Project Complexity Risk: simple versus complex project
9. New Technology Risk: proven technology versus cutting edge/unproven
10. Benefit Risk: risk to realizing projected benefits
Option Recommended
Based primarily on the highest total score achieved above, choose the recommended option for approval. Summarize the primary reasons why this option was chosen over other options.
Implementation Approach
Provide an overview of the general approach undertaken to deliver the preferred solution option and derive the business benefits.
Attachments
Supporting Documentation
Attach any documentation relevant to the business case. For example:
- Problem/opportunity research materials
- Feasibility study research materials
- External quotes or tenders
- Detailed cost/benefit spreadsheets
- Other relevant information or correspondence