Feasibility study and its types

A feasibility study is a short, focused study done at the start of a project to decide whether the proposed system is worth building: whether it can be developed with available technology, within budget and time, and whether it will be useful to the organisation.

Purpose of a feasibility study

• To decide whether to go ahead with the project, change it or drop it, before large investments are made.
• To check that the system contributes to the overall objectives of the organisation.
• To check that it can be implemented using current technology, within the given budget and schedule.
• To check that it can be integrated with existing systems.
• To compare alternative solutions and recommend the best one.
• To identify major risks and constraints early.
• The output is a feasibility report that management uses to make the go/no-go decision.

Types of feasibility

1. Technical feasibility
2. Economic feasibility (cost–benefit)
3. Operational feasibility
4. Schedule feasibility
5. Legal feasibility (Remembered together as TELOS: Technical, Economic, Legal, Operational, Schedule.) Some texts also include social/behavioural and resource feasibility.

Technical feasibility

Technical feasibility asks: can the system be built with the available technology and expertise? It examines:

• Whether the required hardware, software, network and tools are available or can be acquired.
• Whether the technology is mature, or new and risky.
• Whether the development team has the needed technical skills.
• Whether the system can meet the required performance, capacity, security and reliability.
• Whether it can be integrated with existing systems and databases. Example: for an online exam system for 5,000 students at the same time, the study checks whether the college's server and internet bandwidth can handle the load, or whether cloud hosting is needed, and whether the team knows the chosen web framework.

Economic feasibility

Economic feasibility (cost–benefit analysis) asks: will the benefits be greater than the costs?

• Costs: development (staff, hardware, software licences), installation, training, and yearly operating and maintenance costs.
• Benefits: tangible (reduced staff cost, less paper, faster processing, more sales) and intangible (better decisions, customer satisfaction, image).
• Techniques: payback period, return on investment (ROI), net present value (NPV) and break-even analysis.

Example: a computerised billing system costs NPR 20 lakh to develop. It saves NPR 8 lakh per year, and running it costs NPR 2 lakh per year, so the net benefit is NPR 6 lakh per year.

• Payback period = 20 / 6 = 3.33 years (about 3 years 4 months).
• Over 5 years: net benefit = 5 × 6 = 30 lakh; ROI = (30 − 20) / 20 = 50%. Since the system pays back within its expected life, it is economically feasible.

(Briefly: operational feasibility checks whether users will accept and use the system and whether it fits business processes; schedule feasibility checks whether it can be completed by the required date; legal feasibility checks conflicts with laws, contracts, licences and privacy rules.)