3. Opportunity Study
An Opportunity Study is executed in the earliest phase
of a project. The scope of the study covers a first
investigation of a project idea or the identification of
opportunities. ... Project ideas in a certain region, for a
certain industry or based on available raw materials are
investigated.
4. Pre-investment Phase
Opportunity Study
Pre-feasibility Study
Feasibility Study
Appraisal Report
• Screening innovative ideas
• Reviewing country importing items
• Assessing local community needs
• Projecting future demand on
certain product or service
• Examining current diversified
industrial trends
• Reviewing available skill &
workforce
• Expert research
5.
6. Feasibility study
It is an assessment of the practicality of a proposed project or system. A
feasibility study aims to objectively and rationally uncover the strengths
and weaknesses of an existing business or proposed venture, opportunities
and threats present in the natural environment, the resources required to
carry through, and ultimately the prospects for success. In its simplest
terms, the two criteria to judge feasibility are cost required and value to be
attained.
7. Definition
A project feasibility study is a comprehensive report that examines in
detail the five frames of analysis of a given project. It also takes into
consideration its four Ps, its risks and POVs, and its constraints (calendar,
costs, and norms of quality). The goal is to determine whether the project
should go ahead, be redesigned, or else abandoned altogether.
8. TELOS is an acronym in project management used to define
five areas of feasibility that determine whether a project
should run or not.
T - Technical - Is the project technically possible?
E - Economic - Can the project be afforded? Will it increase
profit?
L - Legal - Is the project legal?
O - Operational - How will the current operations support the
change?
S - Scheduling - Can the project be done in time?
9. WHY DO FEASIBILITY STUDIES?
To find a solution that is cost effective from a business perspective.
• To Find a solution that is well recognized
• To find out the probable market for the products
• To find out the opportunities and threats as presented by
environment
• To determine the probable income of operating the project
• To show the contributions the project can offer to the society, among others
10. BENEFITS OF CONDUCTING A FEASIBILITY STUDY
Narrows the business alternatives.
• Gives project teams more focus and provides an
alternative outline.
• Identifies a valid reason to undertake the project.
• Enhances the success rate by evaluating multiple
parameters.
• Aids decision-making on the project
12. Feasibility Study V/S Business Plan
An investigating function
Outlines and analyzes several
alternatives
Conducted before business
plan
13. Reasons to Do Feasibility Study
• Gives focus to the project and outline alternatives.
• Narrows business alternatives
• Identifies new opportunities through the investigative
process.
• Identifies reasons not to proceed.
• Enhances the probability of success by addressing and
mitigating factors early on that could affect the project.
• Provides quality information for decision making.
• Provides documentation that the business venturewas
thoroughly investigated.
• Helps in securing funding from lending institutionsand
other monetary sources.
• Helps to attract equity investment.
14. Dimensions of Business Viability
Market Viability
Technical Viability
Business Model Viability
Management Model Viability
Economic & Financial Model Viability
Exit Strategy Viability
18. Management Model Viability
Application of
knowledge &
skills
Training
Employee
management &
recruitment
Management of
intellectual
property
Management of
risk
Ability to
delegate to the
staff
Suitable
organizational
structure
Ability to
measure
business
process
19. Economic & Financial Viability
Startup cost Working capital Operating cost
Raw material
cost
Overall return on
investment
Overall
profitability
Break Even
Point
Sustainability of
market versus
projected
revenue
Ability to
generate
economic value
20. Exit Strategy Viability
Create wealth
from exit
strategy
Ability to
define exit
strategy
Identify
potential buyer
or strategies
Schedule exit
strategy
21. Issues to be Considered
Market
Feasibility
Technical
Feasibility
Resource
Feasibility
Cultural
Feasibility
Operational
feasibility'
Legal
Feasibility
Schedule
Feasibility
Economic
Feasibility
22. Market Feasibility
• Industry description.
• Industry competitiveness.
• Market potential
• Access to market outlets.
• Sales projection
Market
assessment is
needed to
identify the
opportunities in
the market. If no
opportunities
exist, there may
be no reason to
proceed further.
23. Technical Feasibility
• Determine facility needs.
• Suitability of production
technology.
• Availability & suitable of site.
• Raw materials.
• Other inputs.
Product
methodology need
to be determined. It
involves which
technology will be
needed for
production, how it
will be operated
and the experience
of the firm in using
the technology.
24. Resource Feasibility
• Required time for
completion
• Effect on normal
business operation
• Amount of resources
The time required
for the project and
resources needed to
be determined here.
Contingency &
mitigation plans
should also be
stated here so that if
the project does
over run the
company is ready
for this eventuality.
25. Cultural Feasibility
• Impact on the local &
general culture
• Environmental factors
need to be considered
• Impact of enterprise's own
culture
Culture has great
effect on
business. So
local culture as
well as corporate
culture need to
be taken into
consideration
here.
26. Operational Feasibility
• Compatibility of current work
practices & procedures with new
system required by the project.
• Effect of social factors such as
how the organizational changes
will affect the working lives of
those affected by the new system
Focuses on the
degree to which the
proposed
development projects
fits in with the
existing business
environment and
objectives with
regard to
development
schedule, delivery
date, corporate
culture & existing
business process
27. Legal Feasibility
• Legal Implication
• Ethical Issues
• Authorization
• Political Issues
• Environmental Issues
Whether the
project
conflicts with
legal
requirement is
need to be
checked.
28. Schedule Feasibility
• Project timetable
• Project deadline
A project will fail if
it takes too long to
be completed before
it is useful.
Typically this
means estimating
how long the
system will take to
develop, & if it can
be completed in a
given time period
using some methods
like payback period.
29. Economic Feasibility
• Availability of
required resources
• Determine the
benefits & savings
• Compare the
benefits with cost
The purpose of the
economic feasibility
assessment is to
determine the
positive economic
benefits to the
organization that the
proposed system
will provide. It
includes
quantification and
identification of all
the benefits
expected. This
assessment typically
involves a cost/
benefits analysis.
30. Parts of Feasibility Report
7. Business Model
8. Marketing & Sales
Strategy
9. Production Requirement
10.Management & Personnel
Requirement
11.Intellectual Property
12.Regulations Issues
13.Critical Risk Factors
Cover Sheet
Executive Summery
Table of Content
1. Introduction
2. Product or Service
3. Technology
4. Market Environment
5. Competition
6. Industry
31. Parts of Feasibility Report
Financial Projections
1. Balance Sheet Projections
2. Income Statement Projections
3. Cash Flow Projections
4. Break-Even Projections
5. Capital Requirement & Strategy
Findings & Recommendations
Conclusion
33. T
obe able to understand the phasesof a Project
Life wefirst haveto understandthe different
interpretations of a Project Life Cycle asinterpreted
by different global organizations that deal with
governments.
36. Cycle Order ADB WorldBank
1 Country Partnership Strategy /
Regional Cooperation
Strategy
Country Assistance Strategy
2 Preparation Identification
3 Approval Preparation, Appraisal and
Board Approval
4 Implementation Implementation and
Supervision
5 Completion / Evaluation Implementation and
Completion
6 Evaluation
37. I. Pre– Investment
II. Investment
III. Operations
IV.Evaluation
Support Studies:
•Opportunity Study
•Pre-feasibility Study
•Feasibility Study
•Appraisal and Decision
Negotiation and Contracting
Engineering Design
•Constructionand Training
•Start-up
38.
39. The “Triple Constraint”…..
A change to a component of the Triple
will usually affect other components.
Therefore careful analysis of a move to
make a change is necessary in order to
assess the impact of the change to avoid
negative effect on the project.
SCOPE
The scope involves the range of tasks required to accomplish programme goals. ( it
constitutes the process to ensure that the project includes ONLY all the work required to
complete the project successfully).
The scope is one of the three main elements that must be kept in balance in the project
constraints triangle. 39
40. Resources
These include:
•The personnel
•The equipment needed to achieve the aims of the project
•These essential elements will create expenditure and are dependent on
the project budget.
•Funds given is fixed for the whole project period as well as the budget
and availability of resources.
•Any increase after budget approval and commencement of project will
be taken care of by the applicant or a complementary funding elsewhere.
40
41. Project Schedule
Indicates the time and sequence of the various tasks as well as the total project
duration.
While the time can be modified slightly according to varying needs, the funding can
not (i.e. an extension of a few months for completing the outcomes of the project
can be requested.
* What we must note is that no project works exactly according to the initial plan.
Successful project management is a process of continuous planning and revision as
shown below
41
