Activities done during feasibility analysis:

Once the need for the system and its business requirements have been defined, the approval committee may authorize the systems analyst to prepare a more detailed business case to better understand the proposed information system project.

• Feasibility analysis guides the organization in determining whether to proceed with the project.
• Feasibility analysis also identifies the important risks associated with the project that must be managed if the project is approved. As with the system request, each organization has its own process and format for the feasibility analysis, but most include techniques to assess three areas

1. Technical Feasibility
2. Economic Feasibility
3. Organizational Feasibility.

The results of evaluating these three feasibility factors are combined into a feasibility study deliverable that is submitted to the approval committee at the end of project initiation.

1. Technical Feasibility: Can We Build It?

• Familiarity with application: Less lorniliality generates more risk
• Familicnity with technabgy: lees forshoriy genercees more risk.
• Project size: loge projects have more risk.
• Compatibility: The harder it is to integrate the system with the company's existing techndagy. The higher the risk will be.

1. Economic Feasibaity: Should We Build It?
2. Development costs
3. Amin( operating costs)
4. Amid henells (cost savings and/or increased revenues)

5. Intangible benefits and costs

6. Organizational Feasibility: If We Build It, Will They Come?

7. Project chompionlii
8. Senior mangernent
9. Users
10. Other stakeholders
11. Is the project strategically aligned with the business?

Although feasibility analysis now within the context of project initiation, most project teams will revise their feasibility study throughout the SDLC and revisit its contents at various checkpoints during the project. If at any point the project's risks and limitations outweigh its benefits, the project team may decide to cancel the project or make substantial revisions.

Structure of feasibility report:

A feasibility report should have the following structure:

1. Executive Summary:

   It provides a quick overview of the main points of the assessment, helping to form a picture of the proposal along with the recommendations. It should be concise and include the major findings covered in the main body of the report.

2. Need Analysis

   Need Analysis information provide a context to the business proposition? It analyzes the justification of the idea, with a study of possible alternatives. It links the business idea to the current circumstances and helps to inform evaluation of the business idea.

3. Engineering:

   Description of the technical aspects of the business idea, including any changes needed to be made to existing processes or the need to add items to existing range of products and services.

4. Cost Estimate:-

   This involves estimating project cost to a suitable level of accuracy. -Levels of around -5% to +15% are common at this level of a project plan. -Estimates of capital investment, recurring and nonrecurring costs must be there -Sensitivity analysis can be carried out on the estimated cost values to see how sensitive the project plan is to the estimated cost values

5. Financial Analysis-

   This involves an analysis of the cash flow profile of the project -The analysis should consider rates of return, inflation, sources of capital, payback periods, breakeven point, residual values, and sensitivity -This is a critical analysis since it determines whether or not and when funds will be available to the project

6. Project Impacts- This portion of the feasibility study provides an assessment of the impact of the proposed project -Environmental, social, cultural, political, and economic impacts may be some of the factors that will determine how a project is perceived by the public

7. Conclusions and Recommendations-

   The feasibility study should end with the overall outcome of the project -This may indicate an endorsement or disapproval of the project.

   Recommendations on what should be done should be included in this section of the feasibility report. A feasibility study is a management-oriented activity. After a feasibility study, management makes a “go/no-go” decision. It helps examine the problem in the context of broader business strategy