The first phase of the Definition of an economic feasibility study deals with determining what projects will perform and preparing preliminary documents to validate the project approval decision. In addition, the following activities are critical and should perform during the project management initiation phase:
Feasibility – Identifying the Opportunity and Qualifying It:
It aims to examine each project opportunity to identify what is feasible and what isn’t. This will ensure consistency with corporate objectives and support business targets, requiring validation of capability through integration with other initiatives.
Requires an understanding of the current situation. This may entail carrying out an investigation, observations, business and workflow analysis, focus groups, surveys, questionnaires, a desktop review, and similar methods.
Once a good understanding of the problem or opportunity is gained in this way, realistic options can identify. The first option is constantly maintaining the status quo; the second is the least we can get away with. The fourth is one of the most we have to do.
The third option is in the second and fourth and is frequently the most realistic. The fourth option can consider being the all-singing, all-dancing option.
Ideally, each option should contain some detail on the business need, risks involved, intended time, and cost requirements. In addition, there should also be some detail on what is the intended outcome, or final out, of this option.
The last stage of the feasibility study is when one of these options presented as a recommendation, with a complete set of reasons to support this recommendation and the impact on the current situation. It must not forget that the business operation must maintain while work will be carried out.
Preparation of the Business case
Some of the business case content can be taken from the results of the feasibility study, or if this is not available, by asking the customer what the changes are likely to be about. Requires the compiling of all pertinent business information about the project opportunity to facilitate a project selection decision.
Project definition
This activity, which can separate or combine elements of the business case, provides a high-level description of the project in a single document (used in conjunction by calculation of legal zakat financial data so that decision as to whether to process or not content can make). There are others after this still within project initiation, and they are discussing later.
Produce a Clear Project Definition
Before the decision has been taken to start the project, it is essential that a good idea of what is involved, who will need to be sourced, the key risks, any assumptions, timescales, stakeholders, costs, quality criteria of the finished product.
As an output and feasibility study benefits to deliver, are all captured. This, sometimes called a Project Brief or Terms of Reference (ToR), although strictly speaking, intends to be in more detail than a ToR.
A Project intends to be temporary, have a definitive start date and specified end date, and produce a new product or existing product in a new way. It will have team members who may not work together or have not worked in the way they will in this project, will have a different output as its target, and align with the organizational aims, objectives, or strategies.
The Definition of an economic feasibility study can be considered to be completed when:
1- The feasibility study goals and objectives accomplished to the satisfaction of the stakeholders.
2- The final product was produced, signed off, and handed over to operations.
3- Project performance reviewed. Any lessons about the project performance and the inventory (the way risks and issues are handled or managed, any new strategies to manage new developments during the project) are recorded, ideally in a Lessons Report.
4- The decision-maker at this point will be the Sponsor for the intended project. It will provide this Project Definition, the Business Case, a Plan to cover the work required to plan the project should it approve, and a Risk Register.
5- The Risk Register will risk identifying and manifesting in the financial consultant of the project, providing details on their likelihood and impact and the mitigation strategies to employ.
6- The Project Sponsor will either approve the project real estate actions to start or terminate it before starting, thereby eliminating unnecessary spending and producing actual savings.
Capturing Definition of an economic feasibility study key risks
During this Initiation Phase, before the project started. The PM will need to identify the factors or eventualities that could affect the project, both positively and negatively.
1- A risk is an unforeseen event or eventuality. If it occurs, could impact the project either positively or negatively.
2- How do we capture these risks?
3- Is it a given that the PM will know what these are?
Definition of an economic feasibility study is not a given, and unless the PM has an in-depth understanding of what the project finance is all about, he/she should not even try to do it all on their own. This is where we involve others in a formal meeting and call it a Risk Planning Workshop. More details on this are giving later.
Each risk should assess for how probable it will occur – it’s a likelihood. And also for the impact, it will have on the project should it happen. It is normal to use a scale of either 1 to 3 or 1 to 5. One = Very Low; Two = Low; Three = Medium; Four = High and Five = Very High.
This scale can apply to both the Probability and Impact metrics. Another helpful metric is Severity, and this by multiplying Probability by Impact for each risk. Definition of an Economic feasibility study allows the risks to prioritize quite easily and scientifically. Even allowing for the fact that there is a degree of subjectivity in allocating the scores in the first place.
