Feasibility Study Quarter

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Feasibility Study Quarter (hereinafter, the Quarter) is the first of four lectures of Operations Quadrivium (hereinafter, the Quadrivium):

The Quadrivium is the first of seven modules of Septem Artes Administrativi, which is a course designed to introduce its learners to general concepts in business administration, management, and organizational behavior.


Outline

The predecessor lecture is Idea Generation Quarter.

Recitals

Strategy analysis is the enterprise effort undertaken in order to analyze concepts generated during strategy discovery with regard to their feasibility. The analysis can be divided in four batches:
  1. To discover the concepts generated during strategy discovery;
  2. To analyze feasibilities of the discovered concepts;
  3. To select most feasible concepts;
  4. To formulate the selected concepts and the reasons that make them most feasible for their further selection or, in other words, as the input for strategy design.

Concepts

  1. Feasibility study. In enterprise administration, an assessment of the practical potential of a proposed change. Depending on the nature of the proposed change and the complexity of its implementation, this assessment may consist of one or more evaluations. If a business opportunity, not a business need, causes the change, a cost-benefit analysis may be needed. If a business need, not a business opportunity, causes the change, a feasibility study may not be feasible itself. If the proposed change refers to the enterprise portfolio, another evaluation, portfolio appraisal, is needed. The change support analysis may be feasible for bureaucracies. The feasibility study can also be described as an evaluation of proposed alternatives to determine if they are legally and technically possible within the constraints of the enterprise and whether they will deliver the desired benefits to the enterprise.
  2. Change. In enterprise administration, the act or instance of becoming different and/or doing business differently.
    • Unexpected change. Change activities that are unintentional and not necessarily goal oriented.
    • Planned change. Change activities that are intentional and goal oriented.
  3. Idea evaluation. An appraisal of potential solutions to problems to identify the best one.
    • Evaluation. The systematic and objective assessment of a solution to determine its status and efficacy in meeting objectives over time, and to identify ways to improve the solution to better meet objectives. See also metric, indicator and monitoring.
    • Domain. The problem area undergoing analysis.
    • Opportunity analysis. The process of examining new business opportunities to improve organizational performance.
    • Enterprise environmental complexity. The number of components in an enterprise's environment and the extent of the enterprise's knowledge about its components.
    • Enterprise environmental uncertainty. The degree of change and complexity in an enterprise's environment.
    • Social screening. Approving social criteria (screens) to investment decisions.
  4. Idea prioritization. The process that arranges proposed changes in order of importance relative to each other.
    • Prioritization. The process of determining the relative importance of a set of items in order to determine the order in which they will be addressed.
    • Abstraction. The ability of engineers to think of design concepts that are not dependent on specific solutions.
  5. Organizational readiness assessment. An assessment that describes whether stakeholders are prepared to accept the change associated with a solution and are able to use it effectively.
  6. Cost-benefit analysis. An analysis of the difference between the change benefit estimate, which is what the enterprise is going to obtain, and change cost estimate, which is what the enterprise is going to lose when some proposed change is implemented. In other words, the financial and non-financial costs of making a change or implementing a solution are compared and quantified to the benefits gained during this analysis. Usually, the cost-benefit analysis is the core of feasibility study.
    • Change benefit estimate. The difference between the positive and negative impacts of the proposed change. The positive impact can be assessed as the expected total value that the enterprise is going to obtain after a proposed change is implemented. The negative impact is what the enterprise is going to lose. These estimates may have several components and may be obtained as a result of an impact analysis.
  7. Impact analysis. An assessment of the impact that a proposed change will have on a stakeholder or stakeholder group, project, or system.
  8. Change cost estimate. The expected total cost of a set of enterprise efforts undertaken in order to implement a proposed change when it is implemented. This estimate is always approximated. In other words, it is what the enterprise is going to lose as a result of the proposed change implementation. Because the cost likely depends on the payroll and the payroll depends on work time, a schedule estimate needs to be evaluated before the cost. Because the schedule likely depends on the work to be accomplished, a effort estimate needs to be evaluated before the schedule. Because the work definitely depends on the change scope, a change scope needs to be developed first of all.
  9. Market analysis. Studies of the attractiveness, the risks, and the dynamics of the market that is identified by the analysis' buyer. Sometimes, market research is considered being the first phase of the market analysis.
    • Market. A place or space in which commercial dealings are conducted including a regular gathering of people for the purchase and sale of products. Collectively, the buyers create the market demand; the sellers create the market supply.
    • Planned economy. An economic system in which economic decisions are planned by a central government.
    • Free market economy. An economic system in which resources are primarily owned and controlled by the private sector.
    • Valuation. The process by which a company's worth or value is determined. An analyst will look at capital structure, management team, and revenue or potential revenue, among other things.
  10. Competitive intelligence. The ability to control market research, to identify the data about the competitors, to process the identified data in order to acquire knowledge, and to apply the knowledge towards understanding and anticipating competitors' actions rather than merely react to them.
    • Competition. The activity or condition of competing on the market. The buyers may compete over purchases of a product; more frequently, the sellers compete over sales of a product.
    • Competitive analysis. A structured process which captures the key characteristics of an industry to predict the long-term profitability prospects and to determine the practices of the most significant competitors.
    • Competitor analysis. Performing an audit or conducting user testing of competing websites and apps; writing a report that summarizes the competitive landscape.
  11. Portfolio appraisal. An appraisal of practical potentials of enterprise portfolios undertaken in order to identify the best one.
  12. Change support analysis. An evaluation of the stakeholder support of the and, vice versa, the resistance to this change.

Roles

  1. Change agent. An individual who acts as a catalyst and assumes the responsibility for supporting proposed change implementation.
  2. Idea champion. An individual who takes on a particular change and actively and enthusiastically promote the change idea, build support, overcome resistance, and ensure that the change is implemented.
  3. Subject matter expert (SME). A stakeholder with specific expertise in an aspect of the problem domain or potential solution alternatives or components.
    • Implementation subject matter expert (SME). A stakeholder who will be responsible for designing, developing, and implementing the change described in the requirements and have specialized knowledge regarding the construction of one or more solution components.
    • Domain subject matter expert (SME). A person with specific expertise in an area or domain under investigation.
  4. Investor.
    • Angel investor. A private investor or group of private investors who offers financial backing to an entrepreneurial venture in return for equity in the venture. Typically, angel investors provide small amounts of capital at early stages of startup development, usually when it is in its infancy, and before a seed round.
    • Venture capitalist. An individual investor, who works for a venture capital firm and is authorized by it to professionally manage pools of investor money in order to invest in specific companies. Venture capitalists typically have a focused market or sector that they know well and invest in. Venture capitalists never or almost never invest in infant startups.
  5. Customer (or client). The person or group of people who are the direct beneficiary of a particular product or service. Ideally, these are the people for whom the product is designed.

Methods

  1. Idea evaluation technique. An established procedure for carrying out idea evaluation.
  2. Due diligence. An analysis an investor makes of all the facts and figures of a potential investment. Can include an investigation of financial records and a measure of potential ROI.
  3. Assumptions analysis. A technique that explores the assumptions' accuracy and identifies risks to the project from inaccuracy, inconsistency, or incompleteness of assumptions.
    • Assumption. Assumptions are influencing factors that are believed to be true but have not been confirmed to be accurate.
  4. Force field analysis. A graphical method for depicting the forces that support and oppose a proposed change. Involves identifying the forces, depicting them on opposite sides of a line (supporting and opposing forces) and then estimating the strength of each set of forces.
  5. Delphi method.

Instruments

  1. Idea evaluation tool. A tangible or software implement used to carry out idea evaluation.
  2. Affinity diagram (or affinity diagramming). A business tool used to organise a large number of ideas, sorting them into groups based on their natural relationships, for review and analysis.
  3. Gantt chart. A project management tool that represents actual and planned output over a period of time. In other words, it is a graphic display of schedule-related information. In the typical Gantt chart, activities or other project elements are listed down the left side of the chart, dates are shown across the top, and activity durations are shown as date-placed horizontal bars. Any bar shows the start and finish dates of the activity it represents. The chart was initially developed by Henry Gantt.
  4. Market analysis tool. A tangible or software implement used to carry out market analysis.
  5. BCG matrix. A strategy tool that guides resource allocation decisions on the basis of market share and growth rate of strategic business units.

Results

  1. Feasible idea (or feasible alternative). Reviews of available alternate procurement actions which could attain the objectives.
  2. Business case. An assessment of the costs and benefits associated with a proposed initiative.

Practices

  1. Methods and instruments used for stakeholder engagement can be always or nearly always applied to change support analysis.
  2. Some researches agree that the SWOT framework shall be outsourced if an enterprise decides to employ it.

The successor lecture is Business Modeling Quarter.

Materials

Recorded audio

Recorded video

Live sessions

Texts and graphics

See also