feasibility analysis by: professor wilmer arellano

Feasibility Analysis

By: Professor Wilmer Arellano

My experience is that there exists a general psychological tendency to overlook "predictable surprises" as things that happen in the normal course.

"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.http://hbswk.hbs.edu/archive/4540.html

Overview

Feasibility Definitions Goals Types of Feasibility Feasibility Assessment

• 1 to 5 Score• Weighted Score• Pugh’s Method

Risk

What are we covering today?

IV. NEEDS FEASIBILITY ANALYSIS A. Needs Analysis B. Feasibility Analysis C. Marketability

XIV. ETHICAL CONSIDERATIONS AND SOCIAL IMPACT A. Ethical Considerations B. Social Impact

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.

http://www.answers.com/topic/feasibility-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?

Do we have the funds? Do we have a sponsor? How much Economic Risk is there?

Next two optional

No need to include in your proposal



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?


Tangible Benefits Readily quantified as $ values, examples:

decreased costs increased sales 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:

improved staff morale increased flexibility of operation higher quality products/services better customer relations

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.

http://akss.dau.mil/dag/TOC_GuideBook.asp?sNode=R4-3-3-4-4&Exp=Y

Cultural Feasibility

Social acceptability?Will there be a positive impact on the

local culture.


For the purpose of your proposal:Include questions on Cultural

Feasibility on your survey


Part of your findings will go in the feasibility section

Use your new knowledge and include a Cultural Feasibility item in your Feasibility Analysis.


Part of your findings will go in a different section.

Use your new knowledge to write a strong and persuasive social impact section.

XIV. ETHICAL CONSIDERATIONS AND SOCIAL IMPACT A. Ethical Considerations B. Social Impact

Legal Feasibility

Organizational conflicts and policies? Laws or regulations impeding the

Project? Laws of regulation limiting the project

Legal Feasibility

For the purpose of your proposal:Do a search to find out laws or rules

that may oppose or limit your projectInclude a Legal Feasibility item in your

analysis in your Feasibility section

Marketing Feasibility

Will the general public accept the product?


IV. NEEDS FEASIBILITY ANALYSIS A. Needs Analysis B. Feasibility Analysis C. Marketability


Include questions on Marketing Feasibility on your survey

Use the information provided by the users on the survey and add a Marketing Feasibility item in your feasibility assessment table.

Write a separate section of your proposal about Marketability. Provide strong arguments of your project Marketability

Next slide is optional

No need to include in your proposal

Operational Feasibility

Urgency of the problem and the acceptability of any solution:

If the system is developed, will it be used?

Potential labor objections? Manager resistance?

Feasibility Assessment Feasibility is Measured Against Attributes Pugh’s Method. All attributes has the same weight. Count + vs. – 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. (The one we use)

Attribute We

igh

t

1 L

ow

2 3 M

ed

4 5 H

igh

Why? SolutionResource FeasibilityDo we have sufficient skills?

XWe don't know how to program microcontrollers

Take a Crash Course

Do we have sufficient equipment?

XThe Lab Does not have a Program Station

Buy One

Do we have sufficient a number of people?

X Three people in the team Enough

Pugh’s Method Example

Attribute - + Why? Solution

Resource Feasibility

Do we have sufficient skills?

1We don't know how to program microcontrollers

Take a Crash Course


1The Lab Does not have a Program Station

Buy One


1 Three people in the team Enough

Schedule feasibilityWhat are the chances of meeting the intermediate mileposts?

1We have carefully analyzed the schedule and we are convinced that it is OK

Not Required

Economic feasibility


1We have only 25% of the required funds

Find a sponsor

TOTAL 2 3

DIFFERENCE 1

For reference only, do not use.

1 to 5 Scale Example

Attribute Sc

ore

Why? SolutionResource FeasibilityDo we have sufficient skills?

2We don't know how to program microcontrollers

Take a Crash Course


3The Lab Does not have a Program Station

Buy One


5 Three people in the team Enough

Schedule feasibilityWhat are the chances of meeting the intermediate mileposts? 5

We have carefully analyzed the schedule and we are convinced that it is OK

Not Required



2

We have only 25% of the required funds

Find a sponsor

TOTAL 17AVERAGE 3.4

For reference only, do not use.

Weighted Scale Example

Attribute

We

igh

t

Sc

ore

W.

Sc

ore

Why? Solution

Resource FeasibilityDo we have sufficient skills?

0.43 2.0 0.86We don't know how to program microcontrollers

Take a Crash Course


0.18 3.0 0.54The Lab Does not have a Program Station

Buy One


0.24 5.0 1.2 Three people in the team Enough


0.07 5.0 0.35We have carefully analyzed the schedule and we are convinced that it is OK

Not Required


Is the project possible, given resource constraints? 0.07 3.0 0.21


Find a sponsor

TOTAL 0.99 17.0 3.16

WEIGHTED AVERAGE 3.19

Weight

ScoreWAverageWeighted

.

This is not a template, use your own attributes.

Use this method.

Fit your table in one page

It looks better

Skills Equipment People Mileposts Economic ResourcesSkills 1 5 3 3 3

Equipment 1/5 1 1 3 3People 1/3 1 1 5 5

Mileposts 1/3 1/3 1/5 1 1Economic Resources 1/3 1/3 1/5 1 1

1 = equal 3 = moderate 5 = strong 7 = very strong 9 = extreme

Skills Equipment People Mileposts Economic Resources G. Mean wSkills 1.00 5.00 3.00 3.00 3.00 2.667269 0.43

Equipment 0.20 1.00 1.00 3.00 3.00 1.124746 0.18People 0.33 1.00 1.00 5.00 5.00 1.528142 0.24

Mileposts 0.33 0.33 0.20 1.00 1.00 0.467044 0.07Economic Resources 0.33 0.33 0.20 1.00 1.00 0.467044 0.07

Total 6.254244

totalMeanGw

AAAMeanG NN

/.

)(.1

21

Obtaining Weights Example 1

Weighted Scale Example 1

Attribute

We

igh

t

Sc

ore

W.

Sc

ore

Why? Solution



Take a Crash Course



Buy One





Not Required




Find a sponsor

TOTAL 0.99 17.0 3.02


Weight


.

This is not a template, use your own attributes

Skills Equipment People Mileposts Economic ResourcesSkills 1 5 3 3 1/9

Equipment 1/5 1 1 3 1/9People 1/3 1 1 5 1/9

Mileposts 1/3 1/3 1/5 1 1/9Economic Resources 9 9 9 9 1

1 = equal 3 = moderate 5 = strong 7 = very strong 9 = extreme

Skills Equipment People Mileposts Economic Resources G. Mean wSkills 1.00 5.00 3.00 3.00 0.11 1.37973 0.16

Equipment 0.20 1.00 1.00 3.00 0.11 0.581811 0.07People 0.33 1.00 1.00 5.00 0.11 0.713709 0.08

Mileposts 0.33 0.33 0.20 1.00 0.11 0.30096 0.03Economic Resources 9.00 9.00 9.00 9.00 1.00 5.799546 0.66

Total 8.775756

totalMeanGw

AAAMeanG NN

/.

)(.1

21

Obtaining Weights Example 2

Weighted Scale Example 2

Attribute

We

igh

t

Sc

ore

W.

Sc

ore

Why? Solution



Take a Crash Course



Buy One





Not Required




Find a sponsor

TOTAL 1.00 17.0 1.74


Weight


.

This is not a template, use your own attributes

Follow your Analysis

Trust yourself!

Remember

You must include all the feasibility items, not just the ones in my examples

Remember

Use your own attributes, do not copy and paste from the slides

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 Cultural Legal Marketing Operational

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

Very Likely Possible Unlikely

Class IV Catastrophic Catastrophic Severe

Class III Catastrophic Severe Moderate

Class II Severe Moderate Low

Class I Moderate Low Low

Likelihood of Occurrence

Und

esira

ble

Out

com

es

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 if they happen

Avoid Class IV Risks!

They Can make you:• Unsuccessful• Unhappy

Very Likely Possible UnlikelyClass IV T1, E2 CatastrophicClass III S2, E1 SevereClass II R1,L1, S1 R2 ModerateClass I T2 M1 Low

R2,M1, T2S2E1

Continue Process

NoneAssign Duties For Break Period

Designate a Dedicated Person to Solve This Issue

Likelihood of Occurrence

Und

esira

ble

Out

com

es

Don't forget a concluding paragraph

analyzing your risks an actions

Use Facts That apply to You Project

All Considerations Fictitious

Legend

Actions

Senior II Project Not Completed on Time

Marketing Resource Technical

Legal Economic Schedule

M1Survey Indicated Price Constraint

R1 Skills to be Acquired

R2 Team Size

T1 New Invention Required

T2 Technology Does Not Exist

L1Any Laws of Regulation against Project?

S1Team Members Procrastination

E2 T1 Would Require Extra Funding

E1Funding Required

S2Impact of Semester's Break

Fault Tree Analysis

What you need to do

Use a fault tree analysis to determine your risks.

Use a Risk Exposure Matrix to asses your risks

Create contingency plans Write the corresponding section on

the proposal

Continuous Risk Management

References

http://www.cs.toronto.edu/~sme/CSC340F/slides/05-feasibility.pdf

http://www.cdf.toronto.edu/~csc340h/winter/ 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. 1997. Software Engineering: A Practitioner’s Approach. New York, USA: McGraw Hill.

Risk analysis and management guidance June 2005, www.riotinto.com

Review

Definitions Goals Types of feasibility Feasibility Assessment

• 1 to 5 Score• Weighted Score• Pugh’s Method

Risk

&&QuestionsQuestions

AnswersAnswers

feasibility analysis by: professor wilmer arellano

Documents

resource risk

economic risk

system constraints

technical risk

schedule program schedule

project possible

resource constraints

system fabrication