Feasibility Analysis
Nupul Kukreja
Supannika Koolmanojwong
23rd September 2013
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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
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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!
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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
Feasible
Region
Region of
Possibility
Constraints
• Must know “how much”, “when” and “where” to
spend time and/or money (optimum not always
possible. Thousands of unknowns!)
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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
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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
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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)
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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.
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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 of a prior “feasible”
decision
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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)
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Feasibility Analysis – How?
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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
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Program Model – Costs/Benefits
Assumptions: Under what assumptions is this model true?
Stakeholders
(Who)
Initiatives
(What)
Value Propositions
(Why)
Beneficiaries
(For Whom)
• Who/what resources • What are the key
are required for
activities that
‘executing’ the
must be done to
initiatives
for delivering/
• Do you need to
realizing the
‘partner’ with
value
another department
propositions/
or organization?
benefits?
• Do you need to hire
anyone?
• Why undertake
this project/
program?
• What are the
value propositions
you seek to
satisfy/serve?
• What are the
goals?
• Who derives
value from the
project/program
? (Usually the
customers or
end users; can
also be project
sponsors)
Costs (How much)
Revenue (i.e. Benefits) (How well)
• What are the costs involved in executing
this program? Eg.: Personnel Costs,
Hardware/Software Costs, Office Rental,
Equipment/infrastructure etc.
• Against what metrics will you track the
benefits delivered? (Derived as a result
of MEDIC-ated value propositions)
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Assumptions
• Growing needs of volunteers
• Continuously growing volunteer pool
• Increasing activities requiring more volunteers
Stakeholders
(Who)
 Developers
 Maintainer
 IIV & V
 Volunteer
 Volunteer
Coordinator
 Supervisor
Initiatives
(What)
Develop new volunteer
management system
Create web application outreach
Develop improved volunteer
management process outreach
Provide training for new job
management process
Deploy job management process
Setup work stations for volunteer
use
Cost
Development Costs,
Maintenance Costs, Maintainer (admin hire),
Web Server (hardware), Web Hosting,
Oracle License etc.
Value Propositions
Beneficiaries
(Why)
(For Whom)
 Improved
 Volunteers
Productivity
 Volunteer
 Faster volunteer
coordinator
management and  Supervisor
less person-toperson time
 Improved
volunteer
management
process
Benefits
Decreased:
Application Data Entry
Time sheet data entry
Job request time
Job assignment time
Increased volunteer applications
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…
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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
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Visualizing ROI
Saved
Effort
(or Cost)
Time
Breakeven point
Total Cost = Total Benefits
Spent
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Computing Costs
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Computing Benefits
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Computing ROI
Year
Cost
(hours)#
Benefit
(hours)+
Cumulative
Cost
Cumulative
Benefit
ROI*
2013
425
0
425
0
-1
2014
156
762
581
762
0.31
2015
172
762
753
1,524
1.02
2016
190
762
943
2,286
1.42
2017
210
762
1,153
3,048
1.64
# : 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
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Plotting ROI
2
1.5
ROI
1
0.5
0
-0.5
2013
2014
2015
2016
2017
-1
-1.5
Year
Benefit Realization only after transition:
- Mid 2014 for 2 semester projects
- Early 2014 for 1 semester projects
In reality, economic analyses are more prevalent:
http://greenbay.usc.edu/csci577/fall2013/uploads/readings/ep/Economic_Analyses
_-_CBA_Break-even_Paybay_and_NPV.xls
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Workshop
Problem Statement
USC needs an online course reservation system to
automate the registration process and to use the
registration data to understand which courses to
offer when, to improve their overall course
offerings thereby increasing quality of the
program
• Get together in your teams and create:
1. Program Model with Cost/Benefits
2. Estimate the costs and benefits per year
3. Compute ROI for 3 years
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Problem Statement
USC needs an online course reservation system to automate the registration process
and to use the registration data to understand which courses to offer when, to
improve their overall course offerings thereby increasing quality of the program
Assumptions: Better course offering/quality increases enrollment/funding
Stakeholders
(Who)
• Developers
• Maintainers
• Data Experts/
Course
Designers
• Faculty/
Advisors
Initiatives
(What)
Value Propositions
(Why)
• Develop System
• Automate registration
• Training (System usage
process  Saves time
and Information analysis) • Better course offerings
• Course/Enrollment
 Increased
Analysis
enrollment
• Program Outreach
• Increase program
• Maintain/update system
quality  Increased
• Discuss course offerings
Alumni Funding
with current students
Cost (How much?)
Beneficiaries
(For Whom)
• Students
• Advisors
• Faculty
• Course
Designers
Revenue/Benefits (How well?)
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Technology Feasibility
1. 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)
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Technology Feasibility
2. 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
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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 ( 3̴ 0% 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?
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Risk Assessment and its relation to
Feasibility Analysis
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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
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Risk Management/Documentation
Risk Exposure
Risks
Need to synchronize
with another team for
delivering capability.
High communication
overhead.
Probability Magnitude
Risk
of Loss*
of Loss* Exposure
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9
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Risk Mitigations
-Setup a fixed schedule
of meeting frequently
and try to raise all the
problems that most
likely to occur.
- Fixed meetings for
synchronizing and
finalizing architectural
interfaces
* Scale: 1 – 9 (1: lowest, 9:highest)
Risk Exposure (RE) = Probability of Loss x Magnitude of Loss
(Risks prioritized using RE score)
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Continual Feasibility Analysis
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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 anchorpoint milestone in ICSM
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The Incremental Commitment Spiral Model (ICSM)
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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
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Key Takeaways
• 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
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Online Resources
• Tools/Documents available on class website:
Greenbay.usc.edu
– Course Readings
• Electronic Papers
1.
2.
Business Case Analysis Guidelines (MS Word™)
Business Case Analysis Workbook (MS Excel™)
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