Concept & Feasibility - when most value gets added to projects.
The Feasibility, or Concept, stage of the project life cycle is the first development stage undertaken after determining the reasons and benefits for undertaking a project. This usually consists of a study, where an Initial Project Definition is developed in outline, demonstrating that the project is feasible, and identifying how the project should be structured in order to deliver the benefits expected of it.
8 good reasons for undertaking a Concept Study before implementing a project. It will:
The last point is IMPORTANT!
- Be the opportunity to consider all options for achieving the project's objectives.
- Develop consistently, alternative scopes and options for the project before determining the Best Value solution to proceed with.
- Have only committed a relatively small amount of money to understand the project and its chances of success, before committing larger sums of money associated with project implementation.
- Identify the most significant risks facing the project, should it proceed to implementation.
- Test the identified project scope and definition against the reasons for undertaking the project.
- Be the time of the project where most value can be added, through the creativity and experience of those involved, where ideas can be considered and tested in a safe environment.
- Test the sponsor's level of commitment and enthusiasm to see the project through, when the resulting conclusions and recommendations are presented.
- Be following recognised Best Practice in project management.
Research has demonstrated that project pre-planning activity, when carried out properly, is the biggest factor determining success for a project.
Research carried out initially by the American Construction Institute and more lately by the European Construction Institute, has shown that those projects that apply recognised project management Best Practice, are highly likely to successfully deliver the benefits expected. Furthermore, from a sponsor's perspective the most significant success determining factor is the application of a rigorous and structured approach to project pre-planning activities before proceeding with the implementation stage.
What Should Be Covered?
The scope of a project Feasibility Study should consist of those activities required to develop and document an outline project definition
Sufficient time should be allowed to identify and evaluate different options for providing the expected benefits of the project, as well as time to test the solutions against the defined project objectives.
25 step plan for Project Definition
will allow you to focus your development activities in a structured way dealing with those issues that Best Practice considers important for producing a comprehensive definition.
It is important that the Feasibility Study considers ALL
significant alternatives and options for delivering the objectives and benefits of the project.
The Feasibility Study stage of the project life cycle is where the biggest opportunities for adding most value to the project can be found. As the project definition gets better developed, and once the project moves into its implementation stage, opportunities for adding value decrease quickly as the focus shifts towards ensuring the project is delivered exactly as planned.
Having identified alternatives and options; next, they need to be narrowed down to a best alternative, which may itself include a few options, before moving on to the detailed pre-planning stage of the project.
CAUTION! It is usual to carry options past the Feasibility Study stage, though these should be options associated with the identified best alternative. The number of options carried forward should be kept to a minimum, or risk developing a project scope with too many degrees of freedom which increases risk associated with the project.
In order to narrow down alternatives and options, the level of definition for all options needs to be consistent. Otherwise the subsequent evaluation and selection process will not be comparing 'like for like', with a high risk of not selecting the Best Value alternative.
Where it is the intention to deliver objectives and benefits in a phased manner, usually when implementing some type of strategic development project, carrying out a MASTER PLANNING Feasibility Study is a common practice;
For example: the development of a geographic site location over time, to meet the longer term strategic business plan for a process driven manufacturing business, will usually be split into independent projects.
Master Planning Feasibility Studies generally follow the same process as the suggested
25 step plan for Project Definition,
yet usually end up defining a project portfolio, often termed a 'programme', consisting of multiple projects phased in order to achieve the strategic objectives over a period of time; commonly, 5 - 10 years.
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Value Enhancement - Challenging and Testing Alternative Scopes & Options
It's important, for all identified alternatives and options, to test and challenge the ability to satisfy the core objectives, and to rank them in order of ability to BEST achieve the defined project objectives. This will highlight the single best alternative or scope option for the project.
The Best Value solution is demonstrated and quantified during this process.
IMPORTANT! Best Value does not necessarily mean the lowest cost option, but should consider the entire life cycle value of the project, generating the best return from the project, however 'return' is defined. Many community based projects measure return, not in terms of financial success, but in terms of social benefit provided, a difficult metric to quantify.
During Value Enhancement reviews it is also important to test and challenge peoples' pet requirements and to be prepared to reject them should they not support the Best Value Solution. This is where the 'NEEDS' are separated from the 'WANTS'. This in itself adds value to the project.
Here we share a straightforward process we have used successfully on many occasions when developing Feasibility Studies:
This first step defines the sponsor's requirements, outputting a "Requirements Document" used as the reference point for testing creative ideas and challenging alternative solutions.
'Quadrant of Aims' exercise, involving the definition team.
The Why, What, Who and When are identified and challenged.
Review the current starting conditions for the project, the here and now, and carry out a GAP ANALYSIS to compare the current starting point with the Defined Requirements from (1)
Brainstorm and develop alternative solutions and options, using the Quadrant of Aims to test ideas against the Defined Requirements and produce a short list of viable alternatives and scope options.
Develop the viable alternatives and scope options to a consistent level. A FUNCTIONAL ANALYSIS exercise can be used to identify the Best Value solution. The development of scope definition should be sufficient to allow a Functional Analysis exercise to be carried out. A Functional Analysis compares each alternative in terms of expected cost or return, time and risk parameters in order to identify the BEST FULL LIFECYCLE SOLUTION for the project.
25 step approach to Project Definition,
work up the outline definition to an understood level of accuracy within the allowable remaining time the sponsor is expecting, before documenting and reviewing with the sponsor.
Following completion of step (5), you find yourself at a commonly used, first Stage Gate for a project. A point where the project either gets approved to develop to Detailed Planning, sponsors' requirements get amended and the feasibility work goes through an iteration, or the project gets terminated due to low business attractiveness.
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Frequently, time is of the essence since the project's output needs to be brought to market before a competitor steals the initiative; or maybe, there is some regulatory requirement, that if left un-actioned, will result in suspending business operations.
Here the temptation and pressure from project sponsors to short cut, or even omit, the project pre-planning stages is great. Though, due to the fast-track nature of these projects it is more important to spend some quality time to first understand and define the subsequent project implementation stage properly.
The amount of effort involved during the Feasibility Study stage, and therefore how long it takes to complete it, is not as important as undertaking
a recognised Best Practice, structured approach to project definition.
Where do many projects run into difficulties?
Through missing out, or omitting SCOPE items, rather than estimate errors associated with budgets or activity durations already identified.
This is where the
Work Breakdown Structure, WBS,
is important, though for a Feasibility Study, the WBS does not need to be developed to the activity level of detail; just to a level of detail that allows an order of magnitude estimate to be carried out on time and cost.
Rocks on the Road Along the Way
What is also important, whatever the extent of development of project definition, is appreciating the level of risk associated with the accuracy of the development work carried out.
This way EVERYONE understands where the weaknesses lie and where it may be prudent to take a little extra time to better understand high risk issues and to put in place suitable contingencies.
Who to Involve?
It's not difficult to see, that the Feasibility Study stage is the time where 'EXPERIENCE' is important, at a time when the Study Team needs to be kept lean, yet still be able to answer all the required questions with credibility and confidence.
Being the project life cycle stage where most value can be added, it is KEY to include as much depth and breadth of knowledge and experience into the outline project definition, as practical.
Without making the core project team too large, the knowledge of the most experienced needs to be captured. Bring in people with specific past experience of similar projects, or similar processes being undertaken by the project; for example, specialists in developing project definitions.
Consider also involving the supply chain during the project pre-planning stages. This provides a Value Adding benefit, either in confirming assumptions or advising on issues for consideration in specific areas: identifying or evaluating known risks.
For example; it is common practice with construction projects, to involve specialist construction management expertise in assisting with costs and time frames required for construction, as well as the most efficient sequencing for site activities.
Usually the Supply Chain will provide initial input at no cost to the project, in order to make their potential future involvement more efficient and value adding.
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