Advantages of feasibility study

Question

What are the advantages of doing a feasibility study before starting a project? I'm asking because quite often I'm finding that feasibility studies tend to be costly, and we always undertake the project anyway (because usually we do the feasibility study after the project is already selected by the PPM). So what's the point?

Answer 1

There are many advantages for doing a feasibility study, including (but not limited to):

- Seeing if the company can afford the project: What if the costs are too high? Why initiate the project if the company doesn't have enough money to do it in the first place?

- Seeing if the company has the resources to do the project: What if the company doesn't have enough resources for this project? What if the resources that the company has do not have the necessary (usually technical) experience to execute the project?

- Seeing if the project has an acceptable ROI: What if it turns out that the project, after calculating the ROI (see http://www.projectmanagementquestions.com/3611/how-to-calculate-the-roi-of-project ) does not provide a decent return on investment, or even worse, what if the project will lose money? A feasibility study will catch this!

- Seeing if the company has enough time to do the project: What if the project takes 6 months, but the company can only afford to work on this project for 4 months (because in the fifth month another, more important project will be initiated).

PS: It's odd that you do the feasibility study after the project is selected by the PPM. How does the PPM select projects in your company? Isn't based on the feasibility study? I think there's something wrong in how you do project management.