What Is Technical Feasibility? (Process And Best Practices)

By Indeed Editorial Team

Updated 13 November 2022

Published 27 September 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Technical feasibility is a standard practice for companies to conduct feasibility studies before commencing work on a project. Businesses undertake a technical feasibility study to assess the practicality and viability of a product or service before launching it. Whether you are working as a product engineer, product designer or team manager, there may be plenty of situations in your career where you are required to prepare a technical feasibility study. In this article, we discuss what is technical feasibility, explain how to conduct one and share tips on writing a feasibility study report.

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What Is Technical Feasibility?

What is technical feasibility, can be described as the formal process of assessing whether it is technically possible to manufacture a product or service. Before launching a new offering or taking up a client project, it is essential to plan and prepare for every step of the operation. Technical feasibility helps determine the efficacy of the proposed plan by analysing the process, including tools, technology, material, labour and logistics.

A technical feasibility study helps organisations determine whether they have the technical resources to convert the idea into a fully functional and profitable working system. It helps in troubleshooting the project before commencing work. The study identifies potential challenges and uncovers ways to overcome them. It also helps in long-term planning, as it can serve as a flowchart for how products and services evolve before they reach the market.

What Is The Purpose Of A Technical Feasibility Study?

A technical feasibility study helps find the answers to the following questions:

  • Is it possible to develop the product with the available technology in the company?

  • Is the organisation equipped with the necessary technology for project completion?

  • Are there technically strong employees who can deliver the product on time and within budget using the available technology?

  • Is there scope in the company's budget to add more technical resources?

  • Is the available technology the right choice to help the product team save time and complete development within budget?

  • Does the client require specific technology, or is the client open to developing the product, irrespective of the technology?

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How To Conduct A Technical Feasibility Study?

Follow these steps to help you plan a technical feasibility study for your business project:

1. Conduct an initial analysis

The initial analysis (also known as preliminary analysis) helps decide whether the project is worth undertaking from an economic and time perspective. A project is required to give financial returns and conclude within a reasonable timeframe to make it feasible. The two main areas of preliminary analysis include:

Project outline

Start by describing the project using the available details. The outline lists all the critical elements like the target market, the expected goals and outcomes. It also analyses whether there are any available products or services in the market that meet these goals and how the current project offers features or benefits that are better and more efficient.

Technical and equipment accessibility

Evaluate if there are any barriers or factors that hinder profitability. Challenges in accessing raw material, expensive capital, production costs that go over the projected revenues and lack of the right technology are some of the critical factors that hinder project profitability. If the preliminary analysis results show optimistic returns, you can proceed to the next step.

2. Calculate the estimated income

Work with the preliminary study results to predict the expected income that the product or service is likely to generate when sold in the target market. Then calculate the overall cost of development. This includes the expenses for manufacturing the product, along with paying any debts taken for production and continuing regular business operations. If the projected income is more than the overall cost of production, then you can proceed to the next step of the feasibility study.

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3. Do a market survey

A market survey helps determine the realistic revenues the project is likely to earn. The market study has to be in-depth and includes various steps like:

  • Identifying the right market: It involves analysing the demographic factors, the average disposable income of the target market, cultural aspects of the audience and how these factors determine the success of the product/service.

  • Comparing similar offerings: Identify the pros and cons of each product on your list. Compare pricing, quality, customer feedback, marketing strategies, and more to decide if your product/service addresses a specific need that is missing in the market.

  • Estimating the scope of expansion: Determine if the market offers expansion opportunities for launching new products or services down the line. See if there is an opportunity to expand to nearby markets based on the feedback from the survey respondents.

Based on the market survey results, you can decide whether the project is feasible to generate the predicted revenues. If the survey results are positive, you can move on to the next step of the feasibility study.

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4. Prepare a business plan

A business plan explains the project in detail. It outlines the raw material requirements and the planned product launch schedule and has a step-by-step plan on the expected costs at each step of the project and how to manage them. The critical elements of the business plan include:

  • Executive summary

  • Organisational chart

  • Materials, supplies and equipment

  • SWOT analysis

  • Labour costs

  • Facility costs

  • Overheads, including utilities, taxes, and insurance

  • Marketing and merchandising costs

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5. Build a day-one project balance sheet

The day-one project balance sheet lists the liabilities and assets of the project on launch day before it starts generating revenue. Make sure to include the following:

  • assets like the project's initial capital investment, land, building and equipment

  • liabilities like rent, loan repayments and margins for receivables

6. Review the data and decide

In this step, you compare the data you compiled in the previous steps to determine if the project is still feasible. The review provides a clear picture of the overall risks and costs. It helps decide whether it is technically feasible to commence work on the project. Here are three questions to ask during the final review stage:

  • Does the feasibility study determine whether the project guarantees the minimum expected ROI?

  • Do the potential rewards (income, market share, scope of growth) outbalance the risks (monetary investment, energy, time)?

  • Does this project have growth potential?

If the answer is 'yes' to all three questions, you can arrive at the conclusion that the project is technically feasible and economically justifiable.

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What To Include In A Technical Feasibility Study Report?

Once you complete the feasibility study, it is common to present a detailed report to your manager, senior leaders or clients. If you are responsible for writing a technical feasibility report, include the following information in it:

The scope of the project

The report establishes the scope of the project and its objectives. A well-defined scope is critical to verify the accuracy of the feasibility study. Also, identify the parts of the business that directly or indirectly affect the current project.

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The technical requirements of the project

The next step includes all the technical requirements to achieve the project's objectives. Start by listing all available resources, including personnel and equipment. Then, list any additional resources that the team has to procure to complete the project as per the schedule and within budget.

The project approach

Develop an outline of the planned approach to tackle the project. This involves the recommended course of action to achieve the objectives of the project. It is good practice to include more than one approach so that the stakeholders can choose the most viable option.

Evaluation

In this step, assess the cost-effectiveness of the different approaches. You are also required to provide an estimate of the project's total cost and compare it with the expected revenues. Additionally, you can highlight the strengths and weaknesses of each approach.

Final review

The final step of the feasibility study is to provide a formal review of the various elements completed until now. The assessment helps the stakeholders arrive at a final decision about whether it is technically feasible and economically justifiable to proceed with the plan.

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Best Practices For Conducting A Technical Feasibility Study

Here are some points to remember while writing a detailed feasibility report:

  • Use the available tools and templates to help you collate and gather accurate information.

  • Gather feedback and suggestions from all stakeholders, including clients, product designers, developers and other team members.

  • Ask technical questions to the core team members to investigate and get reliable data.

  • If possible, outsource the market survey to a market research team with experience and expertise in the field.

  • Break the study into different parts and evaluate the information you collect separately in each stage.

  • Collate the feedback from each stage and develop the final review without any bias.


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