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Feasibility Analysis. Nupul Kukreja Supannika Koolmanojwong 24 th September 2012. Agenda. Possibility vs. Feasibility Feasibility Analysis (What/Why?) Types of Feasibility Analysis (How?) Business Feasibility Technology Feasibility Operational/Process Feasibility

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feasibility analysis

Feasibility Analysis

Nupul Kukreja

SupannikaKoolmanojwong

24th September 2012

agenda
Agenda
  • Possibility vs. Feasibility
  • Feasibility Analysis (What/Why?)
  • Types of Feasibility Analysis (How?)
    • Business Feasibility
    • Technology Feasibility
    • Operational/Process Feasibility
  • Risk Assessment and Feasibility Analysis
  • Various Levels of Feasibility Analysis
possibility vs feasibility
Possibility vs. Feasibility

“Everything is possible given enough time and money”

  • Usually not enough time or enough money 
  • Businesses exist for making a profit – along with creating jobs, fun, social responsibility etc. Primary purpose – profit $$
  • Time and money are precious and businesses must decide if they are “worth spending” on something before actually spending it!
feasibility analysis why
Feasibility Analysis – Why?
  • Must know what is doable within given constraints – best bang for the buck
  • Not everything is “feasible” with respect to the constraints
  • Must know “how much”, “when” and “where” to spend time and/or money (optimum not always possible. Thousands of unknowns!)

Region of Possibility

Feasible Region

Constraints

feasibility analysis why cont d
Feasibility Analysis – Why? (Cont’d)
  • A commercial customer specified a natural language interface for an otherwise simple query system. The project was cancelled after the natural language interface caused a factor-of-5 overrun in project budget and schedule
  • A commercial customer specified a project to fully digitize a set of corporate records via scanning and optical character recognition. The resulting cost escalated by a factor of 10 after if was discovered that the records included many hard-to-capture tables, charts, and graphs.
  • A government customer specified a 1-second response time for an extremely large transaction processing system. Meeting this requirement involved a custom architecture and a $100M project. The customer authorized a prototyping activity, which determined that 90% of the transactions needed only 4-second response time. With this performance requirement, a commercial-technology-based solution was achieved for $30M
feasibility analysis study what
Feasibility Analysis/Study* – What?
  • Feasibility studies aim to objectively and rationally uncover:
    • The strengths and weaknesses of an existing business or proposed venture
    • Opportunities and threats as presented by the environment
    • The resources required to carry through
    • And ultimately the prospects for success
  • Cost vs. Benefits – simplest criteria to gauge feasibility

*Taken from: http://en.wikipedia.org/wiki/Feasibility_study

feasibility analysis when
Feasibility Analysis – When?
  • Generally done before initiating project or technical development (usually continues towards end of SDLC)
  • Need to look at various aspects of the “problem” to ascertain feasibility
  • Common Factors to look at: TELOS*
    • Technology Feasibility – is it technically possible?
    • Economic Feasibility – can we afford it? Profitable?
    • Legal Feasibility – is it legal? 
    • Operational Feasibility – how well is problem solved?
    • Schedule Feasibility – is it doable in given time?

*Taken from: http://en.wikipedia.org/wiki/TELOS_(project_management)

feasibility analysis other factors
Feasibility Analysis – Other Factors
  • Depending on the type/scope of feasibility analysis various other factors may be analyzed
    • Industry & Market Feasibility
    • Management Team (is the team capable of executing the project)
    • Cultural Feasibility
    • Resource Feasibility
    • Financial Feasibility
    • Real Estate Feasibility etc.
feasibility analysis output
Feasibility Analysis – Output
  • Usually a “Yes/No” decision backed by evidence/rationale for decision
  • Provides “level of confidence” in executing the project and not a guarantee of success
  • Feasibility Analysis is based on “estimates” which in turn should be based on prior available data or through prototyping
  • Project may be declared “infeasible” after uncovering details and a prior “feasible” decision
feasibility analysis in 577
Feasibility Analysis in 577
  • Provide Feasibility Evidence Description ascertaining:
    • Business Feasibility: Perform Cost vs. Benefits analysis to gauge viability of concept
    • Technology Feasibility
      • Architectural Feasibility:
        • Level of Service Feasibility – how does the design satisfy LOS requirements?
        • Capability Feasibility – how does design satisfy/cover capability requirements?
        • Evolutionary Feasibility – (how) is the design capable of satisfying evolutionary requirements?
      • NDI/NCS Interoperability – how well do the NDIs/NCSes interoperate?
    • Process Feasibility: Why follow a particular process and how does it help with execution?
    • Schedule Feasibility: Is the project sufficiently scoped to be doable within 1-2 semesters? (COCOMO, WinWin, prototyping)
business feasibility
Business Feasibility
  • Perform Return on Investment (ROI) Analysis based on costs/benefits of project (i.e. program )
  • ROI = f(cost, benefits*)
    • Analyze ‘cost’ factors
    • Analyze ‘benefits’
    • Conceptually if: Benefits/Cost > 1  Feasible
  • But where do the costs/benefits come from?

*benefits ≡ revenue

augmenting the program model
Augmenting The Program Model

Assumptions: Under what assumptions is this model true?

slide14

Assumptions

  • Growing needs of volunteers
  • Continuously growing volunteer pool
  • Increasing activities requiring more volunteers
ascertaining feasibility of program
Ascertaining Feasibility of Program
  • Use Costs, Benefits of the Program Model to perform an ROI Analysis
  • The costs are estimated on the items listed in the ‘cost box’
  • Benefits are estimated based on those listed in the ‘benefits’ box
  • Compute ROI…
computing roi
Computing ROI
  • In 577 ROI computation is w.r.t. Effort expended (cost) vs. Effort saved (Benefits)
  • Capture Costs (C) as ‘Time Spent’ (except where things were purchased/hired)
  • Capture Benefits (B) as ‘Time Saved’
  • Time can always be converted to money (and vice versa )
  • Compute ROI = Net Benefits/Cost

ROI = (B – C)/C

visualizing roi
Visualizing ROI

Saved

Effort (or Cost)

Time

Breakeven pointTotal Cost = Total Benefits

Spent

computing roi1
Computing ROI

# : Assuming 10% per yr increase in cost. Rounded up

+ : Benefits rounded up to nearest integer

* : ROI = (Cumulative Benefit – Cumulative Cost) / (Cumulative Cost)

It’s okay to round off decimals – these are just estimates and 23.54 hours of effort is not better than 23 or 24 or 25 hours

plotting roi
Plotting ROI

Benefit Realization only after transition:

- Mid 2013 for 2 semester projects

- Early 2013 for 1 semester projects

technology feasibility
Technology Feasibility
  • Architecture Feasibility
    • LOS Feasibility Techniques:
      • Analysis
      • Detailed references to prototypes
      • Models
      • Simulations
    • Capability Feasibility: Explicitly state/show how design satisfies capability requirements
    • Evolutionary Feasibility: Explicitly state/show how design satisfies evolutionary requirements (if any)
technology feasibility1
Technology Feasibility
  • NDI/NCS Interoperability
  • Various different NDI/NCSes may be used to satisfy the operational concept
  • Need to check if they can seamlessly interoperate
    • Plug and Play instead of Plug and Pray
  • Usually a manual effort by going through documentations and architecture and by prototyping to see if glue code required
process feasibility
Process Feasibility
  • ICSM for 577 typically has 4 ‘sub process models’
    • Architected Agile (develop from scratch)
    • NDI Process (Shrink-wrapped software; minor customization possible; may have missing functionality)
    • NDI Intensive ( ̴30% of features provided by NDI; remaining effort in appraising features)
    • Net-Centric Services (Almost all functionality provided by online services with some customization)
  • Need to provide rationale stating which process was chosen and why
  • (How) Will the process help deliver the operational concept within budget/schedule?
risk assessment
Risk Assessment
  • Feasibility analysis only helps put estimates on the costs/benefits to ascertain expected ROI
  • Various environmental factors can jeopardize project execution and delivery
    • Risks: Things that have a possibility of occurring in the future and may negatively impact outcome of project
    • Problem: Risk which has occurred or something that will happen with 100% probability
  • Necessary to identify, analyze, prioritize and come up with mitigation plans if risk occurs
risk management documentation
Risk Management/Documentation

* Scale: 1 – 9 (1: lowest, 9:highest)

Risk Exposure (RE) = Probability of Loss x Magnitude of Loss

(Risks prioritized using RE score)

various stages of feasibility analysis
Various Stages of Feasibility Analysis
  • Feasibility Analysis is NOT a one time activity
  • The granularity of the analysis changes when progressing through the project
  • Continually conducted as more details are uncovered during execution
  • A previous “feasible” decision might as well become “infeasible” later down the road
  • Feasibility Evidence required at every at every anchor-point milestone in ICSM
trivia all estimates are wrong
Trivia: All Estimates Are Wrong 
  • If all estimates are wrong they why bother doing feasibility analysis?
  • Estimates must be based on experience, judgment and past data (if possible) to be of any value. You’ll still be wrong 
  • It’s the thought process that counts to help ascertain the odds of success
  • Increases confidence in the solution being provided (or outcome of project/program)
  • Shows if the team has thought through the potential pitfalls and their readiness in dealing with them
conclusion
Conclusion
  • Feasibility Evidence is an absolute must to verify optimistic claims made by developers (and other business people too )
  • Always get into the habit of asking “prove it” rather than saying “believe me”
  • No “idea” can come to fruition unless its feasibility has been ascertained to prove with sufficient confidence that it’s indeed worthwhile (ROI)
  • There is NOT enough time/money to do everything and hence it’s necessary to know what’s feasible
  • Out of the ‘multiple’ feasible options choose the one(s) that are feasible and have the best bang for the buck
online resources
Online Resources
  • Tools/Documents available on class website:

Greenbay.usc.edu

    • Course Readings
      • Electronic Papers
        • Business Case Analysis Guidelines (MS Word™)
        • Business Case Analysis Workbook (MS Excel™)