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FeasibilityStudyforInformationSystemProjects
IS6840(Fall2008)TermPaperbyPavadeeKatimuneetorn

UniversityofMissouriSt.Louis

InformationSystems

Feasibility
Study

Estimationof
IT/ISProject

Economic
Feasibility

IS6840SystemAnalysis

Other
Feasibilities

Contactme

TECHCOMIC

References

Formore
"OneYearinanIT
Project"Cartoon
Clickhere

Introduction
Investmentsininformationtechnologyhavebecomecrucialforfirmstoimprovethequalityoftheirproducts
andservices.Investmentininformationtechnologyorinformationsystemhasincreasedoveradecade.IT
spending has grown 166 percent per decade since the 1970s as companies looked to technology as the
silverbullettospurtheirbusinessgrowth(Cohan2005).InvestinginIT/ISisverycrucialforallbusinesses
ineveryindustries.Forexample,Thefoodserviceoperatorsmustadopttechnologyasmorethansimplya
cost of doing business. They must view it as a tool to help them attain their strategic business objective.
(Rubinstein1997)Atthesametime,therearenumerouspossibleITprojectsthatfirmscouldinvestin,such
as, ecommerce, ERP system, new software development, etc. Due to the limited resources and time,
companies must wisely choose to invest in the projects that match their business and economic goals.
Therefore,thefeasibilitystudyisanintegralpartduringtheplanningphaseofthesystemdevelopmentlife
cycle(SDLC).
(FormoreinformationonSDLC,visithttp://en.wikipedia.org/wiki/Systems_Development_Life_Cycle)

One of the feasibility factors that need to be assessed is economic feasibility. Management can assess
economic feasibility by doing the costbenefit analysis, as well as using financial techniques, such as time
valueofmoneyorbreakevenpointanalysis.Inadditiontotheeconomicfeasibilityanalysis,thispaperwill
alsolookatsomeotherfeasibilityfactors,suchastechnical,operational,scheduling,legalandcontractual,
andpoliticalfeasibility.

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WhatisFeasibiltyStudy?
Afeasibilitystudy,alsoknownasfeasibilityanalysis,
isananalysisoftheviabilityofanidea.Itdescribesa
preliminary study undertaken to determine and
document a projects viability. The results of this
analysisareusedinmakingthedecisionwhetherto
proceed with the project or not. This analytical tool
usedduringtheprojectplanningphraseshowshow
abusinesswouldoperateunderasetofassumption,
such as the technology used, the facilities and
equipment, the capital needs, and other financial
aspects. The study is the first time in a project
development process that show whether the project
create a technical and economically feasible
concept.Asthestudyrequiresastrongfinancialand
technicalbackground,outsideconsultantsconductmoststudies.(Matson2000)
A feasible project is one where the project could generate adequate amount of cash flow and profits,
withstandtherisksitwillencounter,remainviableinthelongtermandmeetthegoalsofthebusiness.The
venture can be a startup of the new business, a purchase of the existing business, and expansion of the
currentbusiness(HofstrandandHolzClause,2006).

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WhyPrepareFeasibilityStudy?
DevelopinganewIT/ISprojectisdifficult,complex,andtimeconsuming.Therearemanyideasthatdonot
develop into business operation. Even though these ideas
make it to the operational stage, most fail within the first six
months.
AccordingtotheCHAOSreport(2004)bytheStandishGroup,
15% of IT projects were canceled before they ever got
completedin2004.20%oftheprojectswerecostover43%of
theiroriginalestimate.Also,only34%ofthesoftwareprojects
were complete on time and on budget (even though its up
from16.2%in1994).
Therefore, before investing in the proposed project, one must
determinewhetherthatITprojectscanbeeconomicallyviable
and the investment advantages outweigh the risks involved
(Matson 2000).Also, many IT projects are quite expensive to
conductanditalsoinvolveunfamiliarrisks.
ThetotalspendinginITprojectswas$255billionin2004.(The
CHAOSreport2004)
IT spending has grown 166 percent per decade since the
1970sascompanieslookedtotechnologyasthesilverbullet
to spur their business growth. Yet, with all the billions spent,
thereturnsonthoseinvestmentsarehard,ifnotimpossible,to
fullygauge.(Cohan2005)
Moreover, there are numerous possible IT projects that firms
could invest in. If companies had unlimited resources and
infinite time, all projects would be feasible (Pressman 2005).
However, in the real world business, there are problems of
scarcity of both time and resources. Management is constantly faced with a wide array of possible
investment alternatives and forced to choose one project over the others. Also, most projects must be
developedwithinthetimeconstraintsandunderthelimitedbudget.
Thefeasibilitystudyallowsustopreviewthepotentialoutcomeandtodecidewhethertheyshouldcontinue.
Althoughthecostofconductthisstudymayseemhigh,therearerelativelyminorwhencomparedwiththe
totalprojectcost.Thissmallinitialexpenditureonfeasibilitystudycanhelptopreventlargerlosslater.

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TypesofProjectInvestment
Chen (1996) classifies types of capital investment into three board areas, depending on their impact on
cooperateprofit:
NewProfit:expansionofproductvolume,costsavings,ortoenterintonewoperations.
BusinessProtection:maintainingpresentcapacitytodobusinessandavoidlossofexistingprofits.
ObligatoryInvestment:necessaryinvestmenttoprovidesafetyforemployees,meetgovernment
regulationssuchaspollutioncontrol,andprovidingmodernfacilitiesforemployees.
Onlynewprofitinvestmentswillincreaseacorporationsrateofreturn.Thebusinessprotectioninvestments
helpmaintaincorporateprofitability,butusuallywontincreaseit.Pureobligatoryinvestmentsmaynotpass
the profit tests, as it will reduce corporate profitability from prioryear levels however, it could expand its
scopetoincludeprofitableitemtojustifytheinvestment.

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Estimation
Estimationistofigureouttheapproximateresultwhich
is usable even if input data may be incomplete or
uncertain[1]. Estimating is the main part of feasibility
analysis.IndoingtheestimationforIT/ISproject,there
are four major variables that need to be considered
time, requirements, resources (cost, labor, materials,
infrastructure), and risks. Unexpected changes in any
of these variables will impact an outcome of the
project.Therefore,makinggoodestimatesoftimeand
resourcesforaprojectiscrucial.
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Underestimating project needs may cause the

inadequacy of time, money, infrastructure, materials,
orpeopletocompletetheprojectwhileoverestimating
needs can lead to reject of this adequate project, or
postponetheprojectbecauseitistooexpensive.
According to the Article in developer.com [2] ,
EstimatescanberoughlydividedintothreetypesFair
estimates, Rough estimates, and order of magnitude
estimates.
Fairestimates:Thisisaverygoodestimate.It
willbeonly25%to50%offtheactualvalue.Fair
estimatesarepossiblewhenyouarevery
familiarwiththeprojectasyoumayhavedoneit
manytimesbefore,suchasmaintenancetype
projectwherethefixesareknown,andithasbeendonebefore.
Roughestimates:Theestimateisclosertotheactualvalue.Ideallyitwillbeabout50%to100%off
theactualvalue.Roughestimatesarepossiblewhenworkingwithwellunderstoodneedsandoneis
familiarwithdomainandtechnologyissues.
Ballparkororderofmagnitude:Theestimatewouldfallwithintwoorthreetimestheactualvalue.
Mostestimation,especiallyfortheestimationofanewproject,isfallwithinthistype.Somemaythink
thatthistypeofestimationisclosetonoestimateatall.However,theorderofmagnitudeestimates
areveryvaluablebecausetheygivetheorganizationandprojectteamsomeideaofwhattheproject
isgoingtoneedintermsoftime,resources,andmoney.Itisbettertoknowthatprojectisgoingto
takebetweentwoandsixmonthstodoratherthanhavenoideahowmuchtimeitwilltakeatall.
Knowingwhichofthesethreedifferentestimatesyoucanprovideiscrucial.Also,inmanycases,wemaybe
able to give more detailed estimates for some items rather than others. For example, we may be able to
providearoughestimateoftheinfrastructureweneedbutonlyanorderofmagnitudeestimateofthepeople
andtimeneeded.

EstimationTechniquefornewprojects(Orderofmagnitudeestimates)
1.Breaktheprojectdownintothedifferenttasksneeded.

2.Evaluateeachtaskontwoscales:complexityandsizeofwork.Taskseffectivelyfallintooneof
nine combinations of complexity and
size. For example, a less complex task
maystillinvolvealargeamountofwork,
suchas,loadingadatabasefrompaper
forms.
3.For each combination, define an
expectedamountoftimeandresources
required. For example, the low
complexityandsmallsizetaskswilltake
one week at most, the medium
complexityandsmallsizetaskswilltake
three weeks. These weighing factors
will differ based on the team and project and should be reviewed after the project to help get
bettervaluesthenexttime.
4.Addtogetherallthesevaluesforeachtasktogetanestimateoftimeandresourcesrequired.

EstimationTechniquesfamiliarprojects(RoughorFairestimates)
AccordingtoMurthi(2002)sarticleindeveloper.com,systemanalystcouldestimatefamiliarprojectsby
doingRoughorFairestimatesbyfollowthesefollowingtechiniques:
1.Peoplewhowilldotheactualworkarethebestpeopletodotheseestimates.
2.Onecanaddupalltheestimatesfromdifferentpeopletogetthefinalestimates.
3.Ensuretocollecttheestimatesoftime,people,infrastructure,andmaterialneeds.
4.Breakdowntaskstoasdetailedalevelaspossible.

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CostEstimation
Thereareseveraltechniquesforcostestimation,butthe2basicapproachesaretopdownandbottomup.
Topdownapproach:Costisderivedfromabusinessanalysisofthemajorprojectcomponents,or
startwiththemanagementsexpectationsontherangeofcosts.Then,figureoutwhatyoucandeliver
forthosenumbers.
Bottomupapproach:Costisderivedbyaccumulatingestimatesfromthepeopleresponsiblefor
variouscomponents.Bydoingthebottomupapproach,onewouldbreakdownataskintosmall
components,estimateeachpiece,andaddtheestimatetogether.
Theprimarytechniquesforcostestimationare[3]&[4]:
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Expert
Judgments

Estimationby
Analogy

Parkinson'sLaw

Description
Usingexpertsinboth
softwaredevelopment
andtheapplication
domaintopredict
softwarecosts.

Usingthecostofa
similarprojectinthe
sameapplicationdomain

Usinganyavailable
resources.

Advantage

Disadvantage

Relativelycheap
estimationmethod.
Accurateifexperts
havedirect
experienceofsimilar
systems.

Veryinaccurateif
therearenoexperts!

Accurateifproject
dataavailable

Impossibleifno
comparableproject
hasbeentackled.
Needssystematically
maintainedcost
database

Nooverspend

Systemisusually
unfinished

Getthecontract

Theprobabilitythat
thecustomergets
thesystemheorshe
wantsissmall.
Costsdonot
accuratelyreflectthe
workrequired

Theprojectcosts
whateverthecustomer
hastospendonit
PricingtoWin

Costisestimatedasa
AlgorithmicCost mathematicalfunction
Modeling
derivedfromastudyof
historicalcostingdata

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EconomicFeasibility
Economic evaluation is a vital part of investment appraisal, dealing with factors that can be quantified,
measured, and compared in monetary terms (Chen 1996). The results of an economic evaluation are
considered with other aspects to make the project investment decision as the proper investment appraisal
helpstoensurethattherightprojectisundertakeninamannerthatgivesitthebestchancesofsuccess.
Projectinvestmentsinvolvetheexpenditureofcapitalfundsandotherresourcestogeneratefuturebenefits,
whetherintheformofprofits,costsavings,orsocialbenefits.Foraninvestmenttobeworthwhile,thefuture
benefitshouldcomparefavorablywiththepriorexpenditureofresourcesneedtoachievethem.

Cost/BenefitAnalysis
Toassesseconomicfeasibility,managementhastoanalyzecostsandbenefitsassociatedwiththeproposed
project. The capital cost of a project affects the economic evaluation. Cost estimating is essentially an
intuitiveprocessthatattemptstopredictthefinaloutcomeofafuturecapitalexpenditure(Chen1996).Even
though it seem impossible to come up with the exact number of costs and benefits for a particular project
during this initial phase of the development process, one should spend the adequate of time in estimating
thecostsandbenefitsoftheprojectforcomparisonwithotheralternatives.
When talking about the cost of IT/IS project, one would first think of the tangible costs that are easily to
determine and estimate, such as hardware and software cost, or labor cost. However, in addition to these
tangiblecosts,therearealsosomeintangiblecosts,suchaslossofgoodwill,oroperationalinefficiency.
OnemethodologyfordeterminingthecostsofimplementingandmaintaininginformationtechnologyisTotal
Cost of Ownership (TCO). It is a financial estimate designed to help consumers and enterprise managers
assess direct and indirect costs. Bill Kirwin, VP and Research director of Gartner, stated that TCO is a
holistic assessment of IT costs over time. The term holistic assessment implies an allencompassing
collection of the costs associated with IT investments, including capital investment, license fees, leasing
costs, and service fees, as well as direct (budgeted) and indirect(unbudgeted) labor expenses.[5] An
advisory firm Garter, Inc. has identified and offered statement on the financial impact of deploying
informationtechnologyduringitswholelifecycleasfollowing[6]:
EndusercomputerHardwarepurchasecosts
Softwarelicensepurchasecosts
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Hardware&Softwaredeploymentcosts
Hardwarewarrantiesandmaintenancecosts
Softwarelicensetrackingcosts
OperationsInfrastructureCosts
CostofSecurityBreaches(inlossofreputationandrecoverycost)
Costforelectricityandcooling
Networkhardwareandsoftwarecosts
Serverhardwareandsoftwarecosts
Insurancecosts
Testingcosts
Costtoupgradeorscalability
ITPersonnelcosts
"C"LevelManagementTimecosts
BackupandRecoveryProcesscosts
Costsassociatedwithfailureoroutage
Diminishedperformanceincidents(i.e.usershavingtowait)
TechnologytrainingcostsofusersandITstaff
Infrastructure(floorspace)costs
Auditcosts
Migrationcosts
Ontheotherhand,IT/ISprojectscanprovidemanybenefits,bothtangibleandintangible,toanorganization.
Thetangiblebenefit,suchascostsavingorincreasinginrevenue,wouldbeeasiertoestimatewhile
intangiblebenefitsarehardertoquantify.TheexamplesofbenefitsinIT/ISprojectsareshowninmany
articles.
MetaGroupsExecutiveVicePresidentHowardRubinandBatteryVenturesGeneralPartnerDave
TaborssuggestthatITaccountsformostofthisproductivityimprovement.(Cohan2005)
KevinMoody,directorofBabsonCollegesCenterforInformationManagementStudies(CIMS),
suggeststhatcompanieshaverecentlyreducedsomeoftheirITcostsbeafactorof10byreplacing
expensiveserversrunningproprietarysoftwarewithcheaperbladeserversrunningonLinux.(Cohan
2005)

TimeValueofMoney
There are several economic evaluation methods available to assess an investment.The most widely used
methodsareNetPresentValue(NPV)andDiscountedCashFlowRateofReturn,orInternalRateofReturn
(IRR).Eventhough,NPVapproachandIRRapproachwillnormallyprovidethesamedecisionresult,pollsof
industry indicate that the IRR is the number one economic evaluation decision method use by about two
thirdsofindustrialcompanies(Chen1996).Thisisduetothefactthatsomemanagerspreferapercentage
rateofreturnmorethanthedollaramountfromNPV.
BeforecalculatingNPVandIRR,oneshouldhaveanunderstandingofbasicfinanceconceptcalledTime
valueofmoney.TheconceptofTimevalueofmoneyisthatadollartodayisworthmorethanadollar
availableatafuturedatebecauseadollartodaycanbeinvestedandearnareturn.Someoneinvestinga
sumofmoneytodayatagiveninterestrateforagivenperiodoftimewouldexpecttohavelargersumof
moneyatthefuturedate(BakerandPowell2005).Asdifferentprojectsmayprovidebenefitsatthedifferent
timeinthefuture,allcostsandbenefitsoftheprojectsshouldbeviewedinrelationtotheirpresentvalue.
Presentvalueisthevalueofafuturecashstreamdiscountedattheappropriatemarketinterestrate,called
discountrate.Thepresentvalueofthefuturecashflowcanbecalculatedusingthefollowingequation:

NetPresentValue(NPV)&InternalRateofReturn(IRR)

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NetPresentValue(NPV)

InternalRateofReturn(IRR)

Concept

Addingthepresentvaluesof
eachindividualpositiveor
negativecashflowbasedon
theopportunitycostofcapital.
Inthiscasethepresentis
takenasthetimeatwhich
evaluationiscarriedout.
(Chen1996)

Thediscountrateatwhichthe
netpresentvalueofan
investmentiszero.(Ross,
Westerfield,andJaffe)

Forindependentprojects,

Forindependentprojects,

DecisionRule
(fromBakerand
Powell)

AcceptifNPVisgreaterthan
zero
RejectifNPVislessthanzero
Formutuallyexclusive
projects(chooseoneproject
overothers),acceptthe
projectwiththehighest
positiveNPV.

Strengths
(fromBakerand
Powell)

NPVisadirectmeasureofa
projectsdollarbenefit.
NPVapproachfullyaccountsfor
timevalueofmoneyandconsiders
allcashflowoverthelifeofthe
project.
NPVassumesthatfirmscan
reinvestallofthecashinflowatthe
projectsrequiredrateofreturn
throughoutthelifeoftheproject.
Thisrateismorerealisticthanthe
IRRrate.
NPVapproachprovidestheaccept
rejectdecisionforbothindependent
andmutuallyexclusiveproject.

Weaknesses
(fromBakerand
Powell)

NPVdoesnotprovideagaugefor
relativeprofitability.Forexample,
NPV$1,000ishighlydesirablefora
projectcosting$2,000butnotfora
projectcoating$1million.NPVonly
providethetotalprofitsgained,but
notthepercentagegained.
Somepeoplehavedifficulty
understandingthemeaningofNPV
measure.Therefore,inpractice,
managersoftenpreferapercentage
returntoaPVofdollarreturn.

AcceptifIRRisequalor
greaterthanrequiredrateof
return.
RejectifIRRislessthan
requiredrateofreturn.
Formutuallyexclusive
projects,accepttheproject
withthehighestIRRthatis
greaterthanrequiredrateof
return.

IRRmeasuresprofitabilityasa
percentageshowingthereturnon
eachdollarinvested.
IRRapproachfullyaccountsfortime
valueofmoneyandconsidersall
cashflowoverthelifeoftheproject.
IRRprovidesthesafetymargin
informationtomanagement.Thus,
thehigherIRRisthesafetymargin.
SomemanagersprefertheIRR
becausetheylikedealingwiththe
percentageratesofreturnmore
thanwiththedollarvalueinNPV.

IRRmethodcanprovidenoIRRor
multipleIRRsifaprojecthasanon
conventionalcashflowpattern,such
as,cashflowpatternhasmorethan
onesignchange(/+/).
IRRassumesthatfirmscan
reinvestallofthecashinflowatthe
IRRratethroughoutthelifeofthe
project.Thisratemaybeunrealistic.
IRRmayleadtoinconsistenceof
rankingformutuallyexclusive
projectsasitdoesnotprovidethe
magnitudeordurationofitscash
flow.

BreakEvenAnalysis
Breakevenanalysisisatypeofcostbenefitanalysistoidentifyatwhatpoint(ifever)benefitsequalcosts
(Hoffer,George,andValacich).
BreakEvenRatio=YearlyNPVCashFlowOverallNPVCashFlow
YearlyNPVCashFlow
Thebreakevenpointisusuallyexpressedastheamountofrevenuethatmustberealizedforthefirmto
haveneitherprofitorloss.Itexpressesaminimumrevenuetarget.(Marshall,McManus,andViele)Itcanbe
expressedinnumbersorbytheuseofgraphs.
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AnexampleofEconomicvaluationmethod
A system analysts estimate the cost for the new system as $42,500 one time investment for developing,
updatinghardware,andusertraining.Also,firmneedstopay$28,500eachyearforsoftwaremaintenance,
incremental communication cost, and supplies. On the other hand, the system will provide approximately
$50,000peryear.Assumetheexpectedrateofreturn(discountrate)is12%.

Afterdeterminingcostsandbenefitsofanewsystem,thesystemanalystsevaluatetheprojectusingNPV,
IRR,Breakevenanalysis,orothermethods.Also,usinga timediagramishelpfultoillustratethetimingof
cash flows, especially for situations involving cash flows at the different points in time that are not equal
(BakerandPowell2005).

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OtherEconomicFeasibilityMethods
Also,thereareotherfinancialmethodsthatareusedtoevaluatetheprojectinvestment.
Returnoninvestment(ROI)equalstonetcashreceiptsoftheprojectdividedbythecashoutlaysof
theproject.FirmschoosetheprojectthatprovidesthehighestROI.(Hoffer,George,Valacich)
Paybackperiod(PP)isamountoftimerequiredforaninvestmenttogeneratesufficientcashflowsto
recoveritsinitialcost.Paybackperiodissimilartothebreakevenanalysis,exceptthefactthat
paybackperiodignorestheconceptoftimevalueofmoney.(BakerandPowell)
Profitabilityindex(PI)showstherelativeprofitabilityofanyinvestment.Itequaltothepresentvalue
ofcashinflowdividedbypresentvalueofcashoutflow.(BakerandPowell)

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TechnicalFeasibility
Technica
Assessingtechnicalfeasibilityistoevaluatewhetherthenewsystemwillperformadequatelyandwhetheran
organization has ability to construct a proposed system or not.The technical assessment help answer the
question such as whether the technology needed for the system exists, how difficult it will be to build, and
whetherthefirmhasenoughexperienceusingthattechnology.Oneexamplesofthetechnicalfeasibilityis
showninthecreditunionmanagement.
Itworkedgreatandclientswerehappywithitandfeltthatitmettheirneeds,butobviouslythat
platformneededtobeupgradedtomeetthecurrenttechnologydirectionfortheindustry.Itwasno
longergoingtobesupportablelongtermsaidSaraL.Brooks,chiefstrategyofficerforFiservscredit
uniondivision.(Swedberg2005)
Eventhoughaparticularoperatingsystemmayrunondifferentcomputerarchitectures,thesoftware
writtenforthatoperatingsystemmaynotautomaticallyworkonallarchitecturesthattheoperating
systemsupports.Forexample,in2006,OpenOffice.orgdidnotnativelyrunontheprocessors
implementingthe64bitsstandardsforcomputers.[7]Therefore,implementingtheOpenOfficeatthat
timewouldnotbefeasibleintechnicaltermifthecompanyhave64bitscomputerarchitectures.
In developing the new system, one has to investigate and compare technology providers, determine
reliabilityandcompetitivenessofthatsystem,andidentifylimitationsorconstraintsoftechnology,aswellas
theriskoftheproposedsystemthatisdependonthesizeofthesystem,complexity,andgroupsexperience
withthesimilarsystems.
ProjectSize:Projectsizecanbedeterminedbythenumberofmembersontheprojectteam,project
duration time, number of department
involved, or the effort put in programming.
(Hoffer, George, and Valacich) The larger
the size of the projects, the riskier the
project is. The CHAOS Report (1999)
confirms that small projects are more likely
to succeed than large projects. The
smaller the team and the shorter the
duration of the project, the greater the
likelihood of success. (CHAOS Report
1999)
ProjectStructure: The project that its requirements are highly structured and well define will have
lowerriskthantheonethattherequirementsaresubjecttothejudgmentofanindividual.
FamiliaritywithTechnologyorApplicationarea:Theprojectwillbelessriskyifthedevelopment
andtheusergroupisfamiliarwiththetechnologyandthesystems.Therefore,itwouldbelessriskyif
thedevelopmentteamusesthestandarddevelopmenttoolandhardwareenvironments.Also,onthe
usersside,themoreusersfamiliarwiththesystemsdevelopmentprocess,themorelikelythey
understandtheneedfortheirinvolvementthisinvolvementcanleadtothesuccessoftheproject.
However, one thing to keep in mind is that a project with the highly risk may still be conducted. Most
companywouldhavethereasonablecombinationamonghigh,medium,andlowriskprojects.Withoutthe
highrisk project, the organization couldnt make the major breakthroughs in innovative uses of systems.
(Hoffer,George,andValarich)

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OperationalFeasibility
Assessing operational feasibility is to gain an understanding of whether the proposed system will likely to
solvethebusinessproblems,ortakeadvantageoftheopportunitiesornot.Itisimportanttounderstandhow
thenewsystemswillfitintothecurrentdaytodayoperationsoftheorganization.
Also, system analysts need to assess whether the current work practices and procedures support a new
system and how the organizational changes will affect the working lives of those affected by the system.
(Jaffe1967)ImplementingthenewIT/ISprojectmaycausesomeobstructsandmayincreasedifficultytothe
staffsintheirdaytodayoperation.
Itisnotonlyimportanttoevaluatewhetherasystemcanwork,butalsoevaluatewhetherasystemwill
work.Aworkablesolutionmightfailbecauseoftheenduserormanagementresistance,suchas,how
will the working environment of the endusers change, or whether endusers and management can
andwilladapttothatchange.[8]

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ScheduleFeasibility
Assessingschedulefeasibilityistoassessthedurationoftheprojectwhetheritistoolongtobecomplete
beforeitisuseful.Systemanalystshavetoestimatehowlongthesystemwilltaketodevelop,andwhether
all potential timeframes and the completion date schedules can be met, as well as whether meeting these
datewillsufficientfordealingwiththeneedsofthe
organization.
Theprojectwouldnotbefeasibleintermof
scheduleiftheprojectshouldbeuseto
providethebenefitfortheeventoccursinup
comingsummer,butitschedulestobedone
4monthsafterthatsummer.
Moreover,anotherthingtoconsideristhelearning
curve of the new technology and new system. We
mayhavethetechnology,butthatdoesn'tmeanwe
have the skills required to properly apply that
technology. Even though all information systems
professionals can learn new technologies, the
learning curve will specifically impact the schedule
feasibility.
Also, one needs to determine whether the deadlines are mandatory or desirable. Unless the deadline is
absolutemandatory,itispreferabletodeliveraproperlyfunctioninginformationsystemtwomonthslatethan
to deliver an errorprone, useless information system on time. Missed schedules are bad, but inadequate
systemsareworse.[8]

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LegalandContractualFeasibility
Legal feasibility determines whether the proposed system conflicts with the legal requirement or not. A
projectmayfacelegalissuesaftercompletionifthisfactorisnotconsideredatthefirststage.[9]
The European Union has taken quite a different tack from American's marketdriven approach to
onlineprivacy.TheEU's1998DataProtactionDirectivebasicallyallowsindividualstodecidehowtheir
collecteddatacanbeused.Thus,ifaEuropeanconsumerproviedspersonalinformationsuchasan
address when buying from an online store, the store cannot legally send an ad to the purchaser
withoutfirstseekingpermission.Thedirectivealsoprohibitsthetransferdatatocountriesoutsidethe
EuropeanUnionthatdonothave"adequate"provacyrules."(McAdams,NeslundN.,andNeslundK.)
Today's software can track every keystroke, file download, and Internet page that appear on an
employee'scomputerscreen.Inarecentsurveyof840U.S.companiesbytheAmericanManagement
Association,60percentsaidtheynowusesometypeofsoftwaretomonitortheiremployees'coming
and outgoing email, up from 47 percent in 2001. Therefore, companies may adopt some of these
strategies to protect themselves from lawsuits. Employers wishing to implement the monitoring
programshouldadvisetheiremployeesofthatfactandhaveallemployeessignanacknowledgment
so there is no question about whether an employee has any expectation of privacy on computer
systems.(McAdams,NeslundN.,andNeslundK.)

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PoliticalFeasibility
Assessingpoliticalfeasibilityistogainanunderstandingofhowkeystakeholderswithintheorganizationview
the proposed system. The new information systems may affect the distribution of power and can have
political ramification. Therefore, those stakeholders not supporting the project may block or disrupt the
project.
Hightechpersonaldevicesarecostlytopurchaseandmaintainhowmuchdependonthedeviceand
usage.Soisthedevicecosteffectiveandistherearerealneedforthisdevicetogetworkdone
outsideoftheoffice?Oristhedeviceprovidedmoreasaconvenienceorstatussymbol?(For
example,"Theguynextdoorhasone,andI'mhigherupinthecompanythanheis,soIshouldhave
onetoo.")(Wilbanks2007)

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WebReferences:
[1]http://en.wikipedia.org/wiki/EstimationviewedNovember06,2008
[2]http://www.developer.com/mgmt/article.php/1463281viewedNovember06,2008
[3]http://www.cs.odu.edu/~zeil/cs451/Lectures/04mgmt/costest/costest_htsu3.htmlviewedNovember6,
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[4]http://www.levela.com/software_cost_estimating_swdoc.htmviewedNovember6,2008
[5]http://amt.gartner.com/TCO/MoreAboutTCO.htmviewedNovember04,2008
http://www.umsl.edu/~sauterv/analysis/F08papers/Katimuneetorn_Feasibility_Study.html

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[6]http://en.wikipedia.org/wiki/Total_cost_of_ownershipviewedNovember04,2008
[7]http://en.wikipedia.org/wiki/CrossplatformviewedNovember17,2008
[8]http://www.cs.toronto.edu/~jm/340S/02/PDF2/Feasibility.pdfviewedNovember10,2008
[9]http://en.wikipedia.org/wiki/Feasibility_studyviewedOctober20,2008

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