By Mario Trentim
Before any organization undertakes a new project or initiative, it is essential to first assess the feasibility of that venture. This is done through feasibility studies and business cases:
- A feasibility study looks at the technical feasibility, financial feasibility and operational viability of a proposed project.
- A business case looks at the financials of a new venture to determine if it is financially viable.
Both are essential for any organization looking to undertake new projects or initiatives. Let’s look at these more in-depth:
Technical Feasibility Studies
The most common type of feasibility study is the technical feasibly study. Technical feasibility looks at whether a proposed project is achievable from a technical standpoint. This includes assessing the skills and knowledge required to execute the project, as well as the availability of resources. Once all this data has been collected, it is analyzed to determine if the project is technically feasible. If it is, then the next step is to develop a detailed plan and budget for how it will be executed.
Financial Feasibility Studies
Financial feasibility studies assess whether a proposed project is financially viable. To create a solid business case, organizations need to identify the problem or opportunity that the project will address and gather data to understand potential impact. This data can come from surveys, focus groups, interviews and other research methods. Once all the data has been collected, it is analyzed to determine if the project is worth pursuing from a financial standpoint. If it is, then the next step is to develop a detailed plan and budget for how it will be executed.
Operational Viability Studies
Operational viability studies assess whether a proposed project is operationally viable. This includes assessing the skills and knowledge required to execute the project, as well as the availability of resources. Once all this data has been collected, it is analyzed to determine if the project is operationally viable. If it is, then the next step is to develop a detailed plan and budget for how it will be executed.
The business case is a document that allows decision makers to determine whether the project is worth the investment. It is essential to project selection, prioritization and authorization as part of a portfolio. The business case usually presents a current business problem and suggests alternatives to solve it. The basic purpose of this document is to justify the initiation of a project.
In summary, here are the key differences:
- Feasibility Study
- Is it viable to intake this project?
- Analyzes whether a project is executable or not.
- Prevents undertaking projects that are unfeasible or extremely risky.
- Business Case
- Why is the project worth the investment?
- Describes costs and benefits
- Identifies the current situation (justification)
- Defines the desired future state (solution)
Feasibility studies and business cases are important tools that organizations use to assess the viability of new projects or initiatives. Conducting these studies helps organizations make informed decisions about whether or not to pursue new ventures and allows them to plan accordingly so that they can set themselves up for success.