Exploring the Benefits of a Feasibility Study

When you have an idea that you want to explore, a feasibility study helps you understand if it’s possible—and a good idea. When planning new projects, many companies start with feasibility studies, such as project management firms, software development companies, and medical research facilities. Companies use feasibility studies to:

• Get a complete picture of the tasks and resources needed for a project

• Understand project risks and limitations and prepare for future challenges

What is a feasibility study?

A feasibility study is a complete assessment of a project idea, including:

• Goals and intended outcomes of the project

• Labor, tools, and other resources required to complete the job

• Budget, anticipated cost, and expected return

• Challenges, limitations, and risks to mitigate

Project management professionals use feasibility studies across industries. A company might perform a feasibility study before erecting a new building, opening new stores, or expanding to new markets. A research team might use a feasibility study to decide whether a research topic is worth pursuing, and a software developer might complete one when planning a new program. In all of these examples, the feasibility study lays the foundation for how the project will proceed going forward and gives the project manager a bird's-eye view of all the project's requirements, strengths, and challenges. 

How does a feasibility study benefit a project? 

A feasibility study allows you to test out new ideas in a hypothetical way and learn whether or not your idea has a chance to succeed. It helps you consider whether the investment you want to make—of time, money, or other resources—will be worth it in the end. Consider three important benefits of conducting a feasibility study:

1. Save time and money: A feasibility study examines the risks, challenges, and financial aspects of a project and allows you to forecast financial data like project costs and potential revenue. When you conduct a feasibility study, you can vet your projects carefully and with less risk because you have an informed estimate of your return on investment and potential benefits.

2. Plan ahead for challenges: A feasibility study can help you foresee potential challenges while you have time to prepare and plan for them. For example, if your company wanted to create a new product, you might complete a feasibility study to see if it’s possible. During the study, you might need to produce 10,000 units a month to be profitable. You discover the current production line can create 8,000 units a month. You now have the choice to either increase production or find ways to reduce the overhead costs of creating the product. The feasibility study allows you this insight before you start production.

3. Discover new opportunities: While completing a feasibility study, you may uncover new opportunities you hadn’t considered before. For example, you might complete a feasibility study to discover which markets are most appropriate to sell the products you created in the last example. In the research phase, you may uncover a better, more convenient, or more potentially profitable market than the ones you were initially considering. The feasibility study gives you the advantage of spotting strategic moves.

Areas of feasibility

A feasibility study consists of different sections, including an executive summary and five main areas of feasibility: technical, financial, legal, operational, and timeline. 

Technical 

To assess the technical feasibility of a project, you'll determine whether you have the necessary tools, technology, and technical skills to complete the project. If you don’t have all the necessary resources, the feasibility study helps you understand what you should acquire before you begin. 

Financial

The financial feasibility section helps you understand the project's costs compared to the benefits down the road. If you expect the project to bring in revenue, you’ll include projections in the financial feasibility to understand what return on your investment you can expect. This section will also detail the expenses involved with the project. 

Legal

Legal feasibility refers to whether your project can meet all applicable laws and regulations. Depending on what type of project you’re completing, this could include building regulations, city or town ordinances, intellectual property requirements, data protection measures, or any other set of legal requirements. 

Operational 

The operational feasibility section asks, "Does the company or organization have the labor force and other resources to manage this project and any upkeep or maintenance the project will require?" This section will help you understand how the proposed project relates to the company’s goals and strategic plans. 

Timeline

Time feasibility will help you explore not only how long the project will take but also whether the time commitment you’ll need to give the project is something your company can manage. This section should include deadlines and milestones, such as production schedules. 

Applications of a feasibility study 

Consider a few practical applications of feasibility studies to give you a better idea of how they work in the real world.

Feasibility study in project management

Project management professionals in different industries use feasibility studies. For example, a construction or engineering project manager might use a feasibility study to determine whether the proposed site is the best location for the new building. A project manager in health care administration may decide to complete a feasibility study to determine whether to add new services. A feasibility study is an important tool for the planning stages of a project. 

Feasibility study in software engineering

Software engineers conduct feasibility studies to help determine whether projects will be viable and represent a return on investment. This might include developing a new project, such as a new video game or mobile app, or something more technical, like switching from one kind of technology to another. 

Feasibility study in research 

In research, feasibility studies can help scientists determine whether a particular study is possible and uncover any unnoticed challenges to the research. For example, a medical research team might complete a feasibility study to determine how different groups of people will respond to a new treatment or intervention. 

For example, in 2018, a team of researchers wanted to test whether an intervention called a “brain-computer interface” could help people with autistic spectrum disorder develop stronger social cognition skills. They conducted a feasibility study to see if the new idea had the potential to help people. The brain-computer interface was similar to a virtual reality game that the participants interacted with to teach people how to read social cues more accurately. The feasibility study demonstrated that the major goals of the study were not successful, but some of the secondary outcomes were successful. The feasibility study showed the research team that the new intervention had potential but would need further, more complete studies [1].

How to decide whether you need a feasibility study 

Now that you understand all the uses and benefits of a feasibility study, how do you decide whether your new idea needs one? A feasibility study can be expensive and time-consuming, although it could potentially save you time and money as well. You may benefit from a feasibility study if any of the following apply to you:

• It’s a novel idea: No other businesses offer this product or service.

• You’ve completed preliminary research: You have investigated early to explore why the project might not work, and it still appears viable. 

• The project is complex enough to warrant a full study: Feasibility studies can help convince stakeholders when a project involves significant financial investment. 

Getting started on Coursera 

Whether launching a new product or considering a real estate investment, you may benefit from a feasibility study. Knowing more about feasibility studies, including their benefits and how and when to conduct one, can help you decide if you need one.

To learn more about feasibility studies and project management, consider earning your Google Project Management: Professional Certificate on Coursera. This offering from Google can help you learn skills in strategic thinking, stakeholder development, project planning, risk management, and more.