What Is a Feasibility Study and Developing the Project Definition

The first phase of project management deals with determining what projects will be performed, as well as preparing preliminary documents to validate the project approval decision. The following activities are critical and should be performed during the project management initiation phase: Feasibility – Identifying the Opportunity and Qualifying It: Aims to examine each project opportunity…

The first phase of project management deals with determining what projects will be performed, as well as preparing preliminary documents to validate the project approval decision. The following activities are critical and should be performed during the project management initiation phase:

Feasibility – Identifying the Opportunity and Qualifying It:

  • Aims to examine each project opportunity to identify what is feasible and what is not. This will ensure consistency with corporate objectives and support business objectives, requiring verification of capacity through integration with other initiatives.
  • Requires an understanding of the current situation and this may entailing carrying out an investigation, observations, business and workflow analysis, focus groups, surveys, questionnaires, a desktop review and using similar methods.
  • Once a good understanding of the problem or opportunity gained in this way, realistic options can be identified. The first option is always maintaining the status quo, the second is what is the least we can get away with, the fourth is one of the most we have to do and finally, the third option is in the second and fourth and is constantly the most realistic. The fourth option can be considered to be the all singing, all dancing option.
  • Ideally each of these options should contain some detail on the business need, risks involved, intended time and cost requirements. They should also be some detail on what is the intended exit, or final out, of this option.
  • The last stage of the feasibility study is when one of these options is presented as a recommendation, with a full set of reasons to support this recommendation and the impact of this recommendation on the current situation. It must not be forgotten that the business operation has to be maintained while at work is going to be carried out.

Preparation of the Business case

  • Some of the content of the business case can be taken from the results of the feasibility study, or if this is not available, by asking the customer what the changes are likely to be about.
  • Requires the compilation of all pertinent business information about the project opportunity to facilitate a project selection decision.

Project definition

  • This activity, which can be a separate or combined element of the business case, provides a high level description of the project in a single document (used in conjunction with financial data so that decision as to whether to proceed or not, can be made) .

There are others after this still within Project Initiation and they are discussed later.

Produce a Clear Project Definition

Before the decision has been taken to start the project, it is essential that a good idea of ​​what is involved, who will need to be sourced, the key risks, any assumptions, timescales, stakeholders, costs, quality criteria of the finished product as an output and benefits to be delivered, are all captured.

This is sometimes called a Project Brief or Terms of Reference (ToR), although strictly speaking, it is intended to be in more detail than a ToR.

A Project is intended to be temporary in nature, have a definitive start date and specified end date and is set to produce a new product or existing product in a new way. It will have team members who may not have worked together or have not worked in the way they will in this project, will have a distinct output as its target and will be aligned to the organizational aims, objectives or strategies.

The project can be considered to be completed when:

  • Its goals and objectives are accomplished to the satisfaction of the stakeholders
  • The final product has been produced, signed off and handed over to operations
  • Project performance has been reviewed and any lessons about the project performance (the way risks and issues were handled or managed, any new strategies utilized to manage new developments during the project) have been recorded, ideally in a Lessons Report.

The decision maker at this point will be the Sponsor for the intended project, which will be provided with this Project Definition, the Business Case, a Plan to cover the work required to plan the project should be approved and a Risk Register.

The Risk Register will in addition to listing the risks which are identified and could manifest in the project, provide detail on their likelihood and impact and the mitigation strategies to be employed.

The Project Sponsor will either approve the project to start, or terminate it before it has started and thenby, eliminate any unnecessary spending and produce real savings.

Capturing key risks

During this Initiation Phase before the project has started the PM will need to identify the factors or eventualities that could affect the project, both positively and negatively.

A risk is an unforeseen event or eventuality, which if it occurs, could impact the project either positively or negatively.

How do we capture these risks?

Is it a given that the PM will know what these are?

The answer is no. It is not a given and without the PM has an in depth understanding of what the project is all about, he / she should not even try to do it all on their lonesome.

This is where we involve others in a formal meeting and call it a Risk Planning Workshop. More details on this are given later.

Each risk should be assessed for how probable it is that it will occur – it's likelihood. And also for the impact it will have on the project should it happen.

It is normal to use a scale of either 1 to 3 or 1 to 5. One = Very Low; Two = Low; Three = Medium; Four = High and Five = Very High.

This scale can be applied to both the Probability and Impact metrics.

Another useful metric is Severity and this, by multiplying Probability by Impact for each risk, allows the risks to be prioritized quite easily and scientifically, even allowing for the fact that there is a degree of subjectivity in allocating the results in the first place.

All of this information will be recorded in the Risk Register which will in addition, provide details of the mitigation strategies to be employed for each risk.