In the field of project management, you have to know how to assess the relevance of the solutions available to you. There is an ideal tool to analyze the viability of a project: the feasibility study. This study provides overall visibility on the implementation of a project and on its profitability. So what is a feasibility study? Why is it important for a successful project? How to do a feasibility study in project management? All the answers are in this article.
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What is a project feasibility study?
The feasibility study of a project consists in verifying its viability as well as the organizational and economic consequences that it can induce. A feasibility study can be carried out as part of a business creation, the launch of a new service or a new product, for example. Useful in the development of a business plan, it makes it possible to presume the feasibility of a project and its profitability.
Why carry out a feasibility study?
To put all the chances on your side and make a project a success, it is preferable to study its viability upstream. Carrying out a feasibility study thus offers many advantages since it makes it possible to:
- Take into account all aspects of a project (needs, budget, skills, issues…).
- Identify the obstacles to the successful completion of the project.
- Define the objectives to be achieved.
- Imagine several scenarios leading to the success of your project, as well as an emergency plan to be implemented in the event of a problem.
The ROI (return on investment) of a project can be greatly improved if a feasibility study is carried out beforehand and all parameters evaluated.
Thanks to the feasibility study, the percentage of chances of making the right decisions to lead to the success of your project is much higher.
5 steps to carry out a feasibility study
Carried out before the market study, the feasibility study must follow 5 main steps:
- Assessment of project needs.
- The analysis of its environment.
- The definition of the objectives to be achieved.
- The study of the expected return on investment.
- Risk assessment.
1 – Evaluate the needs of the project
To begin his feasibility study, the project manager must think about everything that is necessary to gather together to successfully launch the project. It could be, for example:
- From an additional team.
- Of skills.
- Of furniture.
- Communication media.
Once the needs of the project are defined, the necessary investment must be estimated. At this stage of the feasibility study, we can already know if it is possible to go further, if the project needs to be modified or if new sources of funding need to be called upon.
2 – Analyze the project environment
During this second step, it is essential to become acquainted with the regulations in force in the sector as well as to learn regularly about current and future technological developments. It is also necessary to check that the project is in adequacy with the customs, the opinions or the interests of its target.
To analyze the environment of your project, you can use the SWOT matrix. Thus, it will be easier to establish what are the opportunities and threats of the market, as well as the strengths and weaknesses of its project.
3 – Define your objectives
The success of a project is conditional on the setting of objectives to be achieved which meet certain conditions.
Using the SMART model, goals will be set so that they are:
- Reached within the allotted time.
It is necessary to establish concrete objectives and integrate them into a retro-planning. By viewing this schedule, it is then possible to know whether the project is really feasible or not.
4 – Predict the return on investment of the project
Getting started with a project often requires investing money in it. The feasibility study makes it possible to assess the potential gains that this project can bring.
For this fourth step, it is necessary to establish scenarios concerning the direction that the project can take. Three types of scenarios must be considered:
- A pessimistic scenario.
- A neutral scenario.
- An optimistic scenario.
All should include the business strategies and the communication strategy in particular, as well as the time that will be necessary to achieve the set objectives.
Do not hesitate to draw up financial tables integrating all these strategies and the implementation timings in order to verify the profitability of the three scenarios.
Good to know : Even the pessimistic scenario must be profitable.
5 – Assess the risks
Before launching the project on the basis of the chosen scenario, it is still necessary to carry out an overall assessment of the risks involved.
During this last stage of the feasibility study, it is important to look at the risks that may be encountered by the project:
- What are they ?
- How long will they last?
- How to minimize them?
Answering these questions makes it possible to identify the risks that can frustrate a project and to find a solution upstream to bypass them or face them brilliantly.
By following these 5 stages of the feasibility study to the letter, we can know if a project is viable or not. If it doesn’t reveal anything to worry about, don’t hesitate to go for it. Otherwise, some adjustments may be necessary to give your project every chance to succeed.
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