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The Five Things To Keep In Mind For Your Project’s Feasibility Study

By July 20, 2022No Comments

The Five Things To Keep In Mind For Your Project’s Feasibility Analysis

In order to discuss the idea behind a project feasibility study, we must first define what a feasibility study entails.  A project feasibility analysis, sometimes referred to as a viability study or a  feasibility study, is an approach used to assess the feasibility of a business situation or growth potential, as the name implies. There are 5 Areas of a Project Feasibility Study in Six Sigma. When using the Six Sigma approach to solve a problem, this is a crucial step. A project feasibility study is a part of the “Define” step of the Six Sigma DMAIC method, according to digital Six Sigma education.

The findings of a project feasibility study are analyzed to measure whether or not to continue working on the project. A feasibility study’s goal is to determine if a project is lawfully, logistically, economically, and operationally viable. The study determines if a project is worthwhile, or if it’s best not to continue with it. The most significant aspect of a feasibility study is that it assesses the project as well as its likelihood of succeeding. If there are any flaws in the study, the project is almost certain to fail. With this explanation, we hope the significance of your project’s feasibility study is clear.

How To Measure Feasibility of a Project

As per the Lean Six Sigma training, there are 2 important factors for judging viability inside a project feasibility assessment. The 1st of them is the cost needed, and the 2nd is the quality that must be supplied. A study that has been thoroughly planned and designed must include the following:

  • Brief history of the company issue or potential for change
  • Simple overview of the item or service
  • Marketing studies
  • Financial reports
  • Operational details and managerial information
  • Legal requirements
  • Tax responsibilities

Why Should You Perform A Feasibility Study?

There are plenty of reasons why you should conduct a feasibility study for your project. Here are some of them:

  • Some projects cannot be completed.
  • It is not necessary to take on every project
  • Executing every project can divert potentially valuable resources to a low-value endeavor.
  • Not all projects make optimal use of resources.

A feasibility study entails defining a company issue or potential for improvement, analyzing operations, defining customer needs (which might include both internal and external customers), and agreeing on a plan of action.

Perks Of Doing A Project Feasibility Study

Now let’s take a brief look at some of the advantages of doing a project feasibility study. Doing a feasibility study for your project will always be valuable, as it provides a clear image of any business issue or growth opportunity to all relevant people involved, including stakeholders.

Benefits Of Conducting A Feasibility Study #1 – Properly Justify Why You Are Taking The Project

Talking about why you want to take on the project will help your team in identifying legitimate reasons for pursuing the project. Keep in mind that not all reasons will be legitimate.

It’s also critical for all the team members to be able to evaluate the reason’s validity in regards to information, facts, and numbers. The project feasibility study assists the team members in quantifying the legitimacy of the grounds for undertaking a project. Don’t go with your instinct, use the data.

Benefits Of Conducting A Feasibility Study #2 – Plan All The Fundamental Details Before Starting

Making a thorough plan before the project starts will enable the project team in making key decisions ahead of the start of the project. The major choice might be whether the project is feasible or not, as well as logistically and financially sustainable.

Benefits Of Conducting A Feasibility Study #3 – Focus On The Problems And Finding Their Solutions

A  project feasibility study assists project teams in prioritizing business issues or opportunities for improvement. Naturally, the prioritizing is done quantitatively.

Benefits Of Conducting A Feasibility Study #4 –  Find The Scope

Narrowing down the scope of a business challenge is another benefit of conducting a project feasibility study. The nature of the business issue might be complicated and enormous. In this instance, narrowing the overall scale of the issue or improvement potential is important to lessen the intricacy. A few improvement initiatives will not be enough to fix all of the institution’s problems. So, as long as the business challenges are interconnected, you’ll have to examine each of them independently.

Benefits Of Conducting A Feasibility Study #5 – Estimate The Project’s Rate Of Success

By examining several criteria, the research aids in improving the project’s chances of success. The rule is straightforward, a 360-degree feasibility study is required for the project. The research must take into account all essential elements for the stated business challenge or improvement potential. It guarantees project success about 95 percent of the time or more.

Usual Project Feasibility Study Problems You’ll Come Across

We must understand the frequent project challenges that project teams face in order to properly complete the project feasibility research. Some of the usual project issues you will be coming across are:

  • Not Important For The Customer Or The Business’ Needs
  • Can’t Specify What A Fault Is
  • Difficulties Collecting Data
  • The Scope For The Project Is Too Broad
  • Sponsors Aren’t Providing Adequate Support.

Let’s go through each of them individually to learn more about them.

Not Important For The Customer Or The Business’ Needs

This problem is more common than you think. Sometimes, the project will simply be unrelated to the demands of the client or the business. If a Six Sigma project isn’t related to consumer or business needs, it will almost surely fail. After all, it must be a critical business requirement. All business important and non-urgent problems can’t be addressed in a single initiative. This problem will be addressed by a project feasibility study.

Can’t Specify What A Fault Is

The failure to identify any form of fault or process boundary is our second common issue. When the team is unable to detect one or more faults for the business issue under examination, the chances of having to evaluate the feasibility study for the project again becomes very high. Furthermore, if the team is unable to define Starting and Ending marks, the problem must be rectified immediately.

Having Difficulties Collecting Data

The next point to consider is the complexities of data collecting. Prior to the start of the project, the project teammates must always verify that data collecting is not complicated. The Six Sigma process is information-driven and very rigorous. The project team might not be able to advance at all throughout different phases of the project cycle if they do not have enough information and data. The project may be put on hold if data is not available. A project feasibility study aids in the validation of measuring methodologies.

The Scope For The Project Is Too Broad

This issue connects to the project’s scope. It’s conceivable that the business issue or growth opportunity is just so large and complicated that the team won’t be able to commit deadlines and resources. These business issues should not be tackled all at once. A project feasibility study will assist with this by dividing the problem.

Sponsors Aren’t Providing Adequate Support

The final common issue to consider is related to sponsorship assistance. Six Sigma is a method that works from the ground up. Every single Six Sigma initiative needs strategic approvals from senior management to prosper. A project feasibility study may provide you with all the ammo you need to acquire all the key decision-makers you need to join you on board.

Ways To Save Costs Within A Project Feasibility Study

Six Sigma techniques are frequently used to reduce costs by removing waste such as scrap, inefficiency, extra material, rework, as well as other activities that increase expenses but do not provide value. Organizations often expect all Six Sigma initiatives to result in financial advantages, both directly and indirectly, through potential savings, increased revenues, balance sheet upgrades, or the achievement of strategic goals. A project feasibility assessment can help identify potential savings.

What Are Hard And Soft Savings?

Hard savings aid in the reduction of expenditures or expenses, resulting in a monetary gain.  Earnings before interest, taxes, depreciation, and amortization, or  EBITDA) improvement initiatives, cost-cutting projects, income enhancement projects, and other strong-savings projects are types of Six Sigma projects.

Soft savings refer to any financial gains that may arise as a consequence of a Six Sigma project but aren’t directly attributed to the initiative. Soft savings are computed by a reasonable evaluation of predicted advantages and by using a probability analysis of their plausibility. In contrast to hard savings, soft savings aren’t reported in the financial records of a project.

A Six Sigma project might potentially offer hard, as well as soft savings in the same operation. Service excellence may rise as a consequence of a Six Sigma project, and the customer could place additional orders because of it. Making your customers happier and increasing their satisfaction with your work can also be considered a soft saving.

Any new orders or transactions from current customers that can be ascribed to a higher level of customer satisfaction contribute to tangible savings. Let’s look at the connection here. Every rise in sales, whether minor or significant, will be reported in the Trading P&L reports. Higher sales can lead to higher profitability for the company, which can be a form of hard savings. A feasibility analysis of the project can aid in determining where and when the savings are coming from.

Keep in mind that your project’s team should really be able to assess client satisfaction ahead of time. Customer experience and satisfaction may be measured using the C-Sat Score or the NPS score. As a general guideline, consider that what is examined is always more likely to get improved.  To boost client happiness, the project team needs to make an effort to quantify it.

Things To Look Out For During A Project Feasibility Study

We have identified five categories of feasibility that are evaluated during a project feasibility study. Let’s take a look at the elements of a feasibility study.

Technical Feasibility

The examination of technical feasibility focuses on the resources of a technical nature that are available to the project. It aids companies in determining whether or not the tech staff is capable of turning ideas and concepts into functional solutions. The planned system’s software and hardware needs are also evaluated for technical viability.

Monetary Feasibility

The monetary feasibility of a project aids organizations in determining the sustainability, cost, and advantages of initiatives before allocating funds. It assists all decision-makers involved in determining and quantifying the favorable economic advantages that the current proposal would deliver to the company. An analysis of the costs and benefits of the project is usually included in this evaluation.

Lawful Feasibility

This section looks at whether the planned system violates any legal standards, such as data protection legislation or social networking laws.

Functioning Feasibility

This research aids in analyzing and determining whether or not the offered solution can meet the company’s needs. It aids in determining whether the business challenge is worth fixing.

Scheduling And Timeline Feasibility

The most crucial aspect of project success depends on planning availability. When a payment is not made on time, it will collapse. Project teams evaluate the amount of time required to finish the project in scheduling feasibility.

We hope this blog helps you understand why doing a project feasibility study can be so beneficial for your project and organization as a whole. If you want to start your Six Sigma project, make sure you go through all of this data and use it to your advantage with the 5 Areas of a Project Feasibility Study in Six Sigma.

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