A feasibility study is a compressed, capsule version the analysis phase of the system development life cycle aimed at determining quickly and at a reasonable cost if the problem can be solved and if it is worth solving. A feasibility study can also be viewed as an in-depth problem definition.
A well-conducted feasibility study provides a sense of the likelihood of success and of the expected cost of solving the problem, and gives management a basis for making resource allocation decisions. In many organizations, the feasibility study reports for all pending projects are submitted to a steering committee where some are rejected and others accepted and prioritized.
Because the feasibility study occurs near the beginning of the system development life cycle, the discovery process often uncovers unexpected problems or parameters that can significantly change the expected system scope. It is useful to discover such issues before significant funds have been expended. However, such surprises make it difficult to plan, schedule, and budget for the feasibility study itself, and close management control is needed to ensure that the cost does not balloon out of control. The purpose of a feasibility study is to determine, at a reasonable cost, if the problem is worth solving.
It is important to remember that the feasibility study is preliminary. The point is to determine if the resources should be allocated to solve the problem, not to actually solve the problem. Conducting a feasibility study is time consuming and costly. For essential or obvious projects, it sometimes makes sense to skip the feasibility study.
The feasibility study begins with the problem description (# 12) prepared early in the problem definition phase of the system development life cycle. Often, the feasibility study report is the primary input to the steering committee that authorizes further work on the project.
The feasibility study is, in essence, a preliminary version of the analysis phase of the system development life cycle. Depending on the nature of the problem, the analyst uses various tools from Parts II, IV, and V. The information collected during the feasibility study is used during project planning to prepare schedules, budgets, and other project management documents using the tools described in Part III. Prototypes (# 31) and simulation models (# 19) are sometimes used to demonstrate technical feasibility. Economic feasibility is typically demonstrated using cost/benefit analysis (# 38).
Developing a new system is a form of investment. Any investment carries risk, and it makes sense to investigate the likelihood of success before committing resources. Thus, problem definition is often followed by a feasibility study, a capsule version of the analysis phase of the system development life cycle aimed at determining quickly and at a reasonable cost if the problem can be solved and if it is worth solving.
Note that the feasibility study is optional. On some small or obvious projects it is a waste of time. Other jobs simply must be done. For example, if federal income tax rates change, a firm has no choice but to update its payroll system. Fixing a bug in a critical program is another example. There is little point trying to prove feasibility when the problem must be solved (although the analyst might want to investigate the relative feasibility of alternative approaches). However, doing a feasibility study should be the default, and the burden of proof should be on skipping this step.
The point of the feasibility study is to determine, at a reasonable cost, if the problem is worth solving. Thus the cost of the feasibility study should represent a small fraction of the estimated cost of developing the system, perhaps five or ten percent of the scope.
Four types of feasibility are considered:
Note that not all organizations consider all four types of feasibility.
The steps in a typical feasibility study are summarized in Figure 13.1.
Starting with the initial problem description (# 12), the systems scope and objectives are more precisely defined. The existing system is studied, and a high-level logical model of the proposed system is developed using one or more of the analysis tools described in Part IV. The problem is then redefined in the light of new knowledge, and these first four steps are repeated until an acceptable level of understanding emerges.
Given an acceptable understanding of the problem, several possible alternative solutions are identified and evaluated for technical, economic, operational, and organizational feasibility. The responsible analyst then decides if the project should be continued or dropped, roughs out a development plan (including a schedule, a cost estimate, likely resource needs, and a cost/benefit analysis), writes a feasibility study report, and presents the results to management and to the user.
Figure 13.1 The steps in a typical feasibility study.
Assuming that one or more feasible solutions exist, the analyst prepares a feasibility study report that identifies several alternatives and recommends a course of action. Table 13.1 shows a typical feasibility report outline.
Table 13.1 An Outline of a Typical Feasibility Study.