Many projects start their life cycles with a so-called project funnel. This means that all project ideas have to pass a pre-defined process in which they are investigated following all business criteria possible, until finally the projects are filtered by prioritization which proceed to their initiation and execution.
An important step in this method in most cases is the Feasibility Study. Sometimes there is even a separate (pre-)project if the assessment is very complex and involves an intense cross-functional team collaboration.
Most frequently the assessments allied to the endeavor focus its technical and financial feasibility. Interesting that priorities often depend on whether there are more engineers or business managers on the Executive board.
- Regarding the technical feasibility the degree of innovation, the related risk and development effort necessary are estimated. The more you enter unknown technical territory or the more you need external support due to your own inexperience in the topic, e.g. to implement a new software, the higher these factors weigh. But also, the potential chances linked, e.g. by a technological leadership in the market, may play a significant role.
- The effort necessary to realize the technical development is the criteria for the initiative’s financial feasibility. At this point not only the existing monetary capabilities for the project budget should be regarded but also the availability of the resources necessary to execute, i.e. the employees’ capacities and skills. The latter are not discretionary on tab, even not in the market, and they can easily become a bottleneck even if there is plenty of money for them. To the credit we need to include the potential revenue or savings by the project’s delivery, and the Time-to Market and financial figures like Return-on-Investment or Cash-flow will count in.
This is the point where in many companies Feasibility Studies are closed. Far subordinated there are two more but often neglected judgement criteria that do not seem to be less important to me, and, ignoring them, often lead to limited business benefit or even to a flop.
- Every project is undertaken to make something change. Many of them serve particularly to rationalize work and processes, which deeply interferes into the employees’ work life. Sometimes and even intendedly a big number of simple tasks, i.e. jobs get lost. Is it possible to take and train employees for “higher” or more sophisticated jobs? The initiative’s social aspect can deeply touch the company’s image as an employer, and its social responsibleness. Its effect to interior as well as the exterior shouldn’t be underestimated – key word media.
- The social feasibility is very close related tot he criteria acceptance. But even if a project is creating socially well balanced results in may fail if these are not accepted. Reasons can be manyfold: Sometimes employees don’t want to adapt the new process or software because they don’t see their own advantage, best case the company’s advantage. This often happens due to insufficient budget for adequate change measures, trainings, convincing efforts – things that are likely to be claimed to be executed internally to save money, and then are cancelled. Bad change always leads to at least delayed benefits and cash-flow. Sometimes it’s just overwhelming people with too much change in too short time, e.g. when reversing a long investment bottleneck, or simply because of people’s rejection of change due the organization’s culture. Project results which are not accepted and applied are a pure malinvestment !
You see it pays off to have a look and investigate from all ankles on an investment already at this early (pre)state. A project may be finished exactly to (time, cost, scope, and quality) plan, but its benefit can only be realized with its results’ application, that means in operation.