Feasibility studies are first milestone during the early development of any financial project;this forms a vital component in the process of business development. Feasibility studies based on accounting and auditing enable organizations to assess the viability, cost and benefits of projects, before allocation of financial resources.This is a tool to enhance credibility of a project and a mean of independent assessment.
A careful feasibility study answers following questions:
The feasibility study is a management-oriented activity. These types of feasibility assessments as follow.
It considers the technical requirements of the proposed project. The technical requirements are then matched with the technical capability of the organization. The systems project is consider technically feasible if the internal business technical capability is sufficient to support the project requirements.
Questions answered under technical feasibility study are:
Operational feasibility should dependent on HR (human resources) available for the project and involves projecting whether the system will be used if it is developed and implemented.
Operational feasibility is a measure of how well a proposed system solves problems, in addition to takes advantage of opportunities identified during scope definition. How it satisfies the requirements identified in the requirements analysis phase.Operational feasibility reviews the readiness of the organization to support the proposed system.
Questions that a detailed operational study will answer:
I. Enough throughput and response time?
II. Managers and also end users with timely, correct and fruitful information?
III. Cost-effective information services?
IV. Reduction in cost and or an increase in benefits?
V. Effective controls to protect against fraud and to guarantee accuracy
VI. Security of data and information?
Economic analysis could also be referred to as cost& benefit analysis. In economic analysis,the procedure is to determine the benefits and savings and compare them with costs. If benefits outweigh costs, the decision is taken to design and implement the system.
Conceivable questions elevated in economic analysis are:
The economical feasibility will review the expected costs. These projected costs will only be a rough estimate; exact costs are not required to determine economic feasibility.