Feasibility Analysis By Professor Wilmer Arellano Prevention is

Feasibility Analysis By: Professor Wilmer Arellano

¢ "Prevention is better than cure" is hardly practiced and l it is only when a surprise boils into a crisis that managers react. l Hariharan ¢ Controller ¢ Perstorp Aegis Chemicals Pvt Ltd. ¢

Overview Feasibility Definitions ¢ Goals ¢ Types of Feasibility ¢ Feasibility Assessment ¢ • 1 to 5 Score • Weighted Score • Pugh’s Method ¢ Risk

Definitions for Feasibility ¢ The quality of being doable l ¢ Word. Net® 2. 1, © 2005 Princeton University A feasibility study is: l l 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/feasibilitystudy-2

Goals Will the project be a success? ¢ The objective of a feasibility study is: ¢ l 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 (for your project) ¢ ¢ Is the project possible, given resource constraints? Do we have the funds? Do we have a sponsor? How much Economic Risk is there?

Economic Feasibility (for the industry) ¢ ¢ Is the project possible, given resource constraints? What benefits will result from the system? l l ¢ ¢ ¢ 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?

Economic Feasibility (for the industry) ¢ ¢ Tangible Benefits Readily quantified as $ values, examples: l decreased costs l increased sales error reductions increased throughput/efficiency increased margin on sales more effective use of staff time l l ¢ ¢ Intangible benefits Difficult to quantify, but maybe more important, examples: l l 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_Guide. Book. asp? s. Node= R 4 -3 -3 -4 -4&Exp=Y

Cultural Feasibility ¢ Social acceptability? Will there be a positive impact on the local culture. l Will there be a positive impact on general culture. l

Cultural Feasibility ¢ For the purpose of your proposal: Include questions on Cultural Feasibility on your survey l Write the section of your proposal about social impact l Use your new knowledge and include a Cultural Feasibility item in your Feasibility section l

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 project l Include a Legal Feasibility item in your analysis in your Feasibility section l

Marketing Feasibility l Will the general public accept the product?

Marketing Feasibility ¢ ¢ ¢ 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

Operational Feasibility (for the industry) 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)

Pugh’s Method Example This is not a template, use your own attributes

1 to 5 Scale Example This is not a template, use your own attributes

Weighted Scale Example This is not a template, use your own attributes

Fit your table in one page It looks better

Obtaining Weights Example 1

Weighted Scale Example 1 This is not a template, use your own attributes

Obtaining Weights Example 1

Weighted Scale Example 1 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 example

Remember Use your own attributes, do not copy and paste mine

Risk The possibility of suffering loss ¢ Risk involves uncertainty and loss: ¢ Uncertainty: The degree of certainty about whether the risk will happen. l Loss: If the risk becomes a reality, unwanted consequences or losses will occur. l

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

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

Fault Tree Analysis

Continuous Risk Management

References ¢ ¢ ¢ http: //www. cs. toronto. edu/~sme/CSC 340 F/slides/05 feasibility. pdf http: //www. cdf. toronto. edu/~csc 340 h/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: Mc. Graw 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

& Questions Answer s