Feasibility studies aim to objectively and rationally uncover the strengths and weaknesses of the existing business or proposed

venture, opportunities and threa ts as presented by the environment, the resources required to carry through, and ultimately the prospects for success.[1][2] In its simplest term, the two crite ria to judge feasibility are cost required and value to be attained.[3] As such, a well-designed feasibility study should provide a historical background of the business or project, description of the product or service, accounting statemen ts, details of the operations and management, marketing research and policies, f inancial data, legal requirements and tax obligations.[1] Generally, feasibility studies precede technical development and project implementation. [edit] Five common factors TELOS provides five common factors. [edit] Technology and system feasibility The assessment is based on an outline design of system requirements in terms of Input, Processes, Output, Fields, Programs, and Procedures. This can be quantifi ed in terms of volumes of data, trends, frequency of updating, etc. in order to estimate whether the new system will perform adequately or not. Technological fe asibility is carried out to determine whether the company has the capability, in terms of software, hardware, personnel and expertise, to handle the completion of the project. When writing a feasibility report the following should be taken to consideration: * * * * A brief description of the business The part of the business being examined The human and economic factor The possible solutions to the problems

At this level, the concern is whether the proposal is both technically and legal ly feasible (assuming moderate cost). [edit] Economic feasibility Economic analysis is the most frequently used method for evaluating the effectiv eness of a new system. More commonly known as cost/benefit analysis, the procedu re is to determine the benefits and savings that are expected from a candidate s ystem and compare them with costs. If benefits outweigh costs, then the decision is made to design and implement the system. An entrepreneur must accurately wei gh the cost versus benefits before taking an action. Cost-based study: It is important to identify cost and benefit factors, which ca n be categorized as follows: 1. Development costs; and 2. Operating costs. This is an analysis of the costs to be incurred in the system and the benefits deriva ble out of the system. Time-based study: This is an analysis of the time required to achieve a return o n investments. The future value of a project is also a factor. [edit] Legal feasibility Determines whether the proposed system conflicts with legal requirements, e.g. a data processing system must comply with the local Data Protection Acts. [edit] Operational feasibility Operational feasibility is a measure of how well a proposed system solves the pr oblems, and takes advantage of the opportunities identified during scope definit ion and how it satisfies the requirements identified in the requirements analysi s phase of system development.[4] [edit] Schedule feasibility A project will fail if it takes too long to be completed before it is useful. Ty

pically this means estimating how long the system will take to develop, and if i t can be completed in a given time period using some methods like payback period . Schedule feasibility is a measure of how reasonable the project timetable is. Given our technical expertise, are the project deadlines reasonable? Some projec ts are initiated with specific deadlines. You need to determine whether the dead lines are mandatory or desirable. [edit] Other feasibility factors [edit] Market and real estate feasibility Market Feasibility Study typically involves testing geographic locations for a r eal estate development project, and usually involves parcels of real estate land . Developers often conduct market studies to determine the best location within a jurisdiction, and to test alternative land uses for given parcels. Jurisdictio ns often require developers to complete feasibility studies before they will app rove a permit application for retail, commercial, industrial, manufacturing, hou sing, office or mixed-use project. Market Feasibility takes into account the imp ortance of the business in the selected area. [edit] Resource feasibility This involves questions such as how much time is available to build the new syst em, when it can be built, whether it interferes with normal business operations, type and amount of resources required, dependencies, [edit] Cultural feasibility In this stage, the project's alternatives are evaluated for their impact on the local and general culture. For example, environmental factors need to be conside red and these factors are to be well known. Further an enterprise's own culture can clash with the results of the project. [edit] Financial feasibility In case of a new project,financial viability can be judged on the following para meters: * Total estimated cost of the project * Financing of the project in terms of its capital structure, debt equity ra tio and promoter's share of total cost * Existing investment by the promoter in any other business * Projected cash flow and profitability [edit] Output The feasibility study outputs the feasibility study report, a report detailing t he evaluation criteria, the study findings, and the recommendations