Economic Feasibility
An economic feasibility of a project is essential before making a decision to invest in it. The process involves developing a break-even analysis of a business to analyze the costs against the returns of a project. It assists investors to determine the time required for the project to pay off its debts. An economic feasibility study develops a business model from the project. The technique is essential to prepare for early acquisition of the resources for use. In this concept, a financial analysis to develop a cost benefit analysis is conducted evaluating all the key criteria of the project.
Socio-Economic Feasibility
The economic feasibility study only identifies the costs and benefits of a project in monetary terms. However, the socio-economic study seeks to answer broader questions such as the economic value of the project to the community. This study aims at evaluating whether the project affects people socially and the scale of the impacts. Caring investors would not be selfish to venture into project that have negative socio-economic impacts on the involved community. Thus, it is essential to conduct this study before investing in a project.
Risk Assessment
Every project is exposed to specific and unique risks. However, some can be mitigated when others do not impact the project significantly. A risk Assessment is essential before making an investment decision as one is able to evaluate the measure and scale of loss in case of occurrence. A risk assessment also helps in development of mitigation strategies for various risks. When the risks are high investors tend to shy away from such projects.
Planning
Before the project began, the crucial gathering of the information and other techniques and methods during the project’s onset was crucial as it mainly provides an overview of what is expected to be done. Planning is one of those aspects that must be looked at before undertaking a project. Gathering information helps to obtain rough estimates, which are helpful in getting the type of resources necessary. Planning is the second most important thing in project management, given that it forms the basis of setting expectation and making assumptions. Therefore, it is necessary to identify all aspects in a project to ensure that the project reaches completion without challenges.
During the Project
Financial Management
The capacities of financial management are to ensure proper utilization of funds throughout the project. Inadequate financial management would result in failure of a project due to funds misuse and spending below or over the budget. Some of the common financial management practices include financial reporting, financial updating, and organizational coordination. Investors should account for all costs of the project in order to evaluate it effectively.
Risk Assessment
Risk assessment activities should be continuous process carried out throughout the project as new risks may arise as the project progresses. This assists in the identification of gaps and improvement of mitigation practices to ensure minimal risk occurrence and losses (Narayanaswami, 2017, p. 156). Some of the risks that should be identified are the financial, technical, environmental, political, and social risks. A qualified risk manager should be hired for the practice.
After the Project
Economic Feasibility
After complete implementation of the project, an economic feasibility study should be conducted to assess whether the financial costs of the project are as in the proposal. A cost benefit analysis can be conducted out to measure the benefits against the costs (Wang et al., 2016). The results of the economic study may vary in the proposal and evaluation stages. Thus, as Ha et al. (2017) put it, is important to establish the reasons behind such disparities and use it for decision-making processes of the next project.
Socio-Economic Feasibility
The socio-economic feasibility study assists investors identify the value of the project socially. Most projects have additional social value that was not captured in the proposal while some negative impacts may be undocumented. However, it is difficult to record all the socio-economic values of a project. According to Li and Wang (2016), this is why carrying out a socio-economic feasibility studies helps in identifying and documenting all the related values of the project.
Environmental Feasibility
An environment study analyzes the environmental impacts of the project. This may include noise, atmospheric, solid waste, or water impacts. The primary objective of carrying out an environmental feasibility study is to establish the adverse impacts that the project might have on the environment and recommend ways of mitigating them (Shockley et al., 2019, p. 1072). After completion of the project, an environment feasibility is essential to compensate and rectify any reversible impacts.
Risk Assessment
A risk assessment study is essential after completion of the project as it identifies any potential risk to the completed project. It also analyzes the risks that the project poses to the surrounding environmental and ways to mitigate them. In many cases, some risks can only reveal themselves once the project is up and running (Kim, Ha and Kim, 2017, p. 46). These include the unanticipated risks before the start of the project.
Project Analysis
It is crucial to analyze the project once it has been completed as it gives an explicit picture of how the overall project was performed. The techniques and methods used identified the items that could be used to improve the project further. It involves identifying things that require some improvements and could be achieved with some degree of effort (Campisi, Gitto and Morea, 2018, p. 195). In the opinion of Okoye and Oranekwu-Okoye (2018, p. 2538), it is important to involve many stakeholders during the actual analysis to ensure efficient evaluation of the whole process. Before and after the project, good planning shall make the reviews crucial and successful.
Reference List
Campisi, D., Gitto, S. & Morea, D., (2018) ‘Economic feasibility of energy efficiency improvements in street lighting systems in Rome.’ Journal of Cleaner Production, Volume 175, pp. 190-198. Web.
Ha, S., Kim, K., Kim, K. & Jeong, H., (2017) ‘Reliability Approach in Economic Assessment of Adapting Infrastructure to Climate Change.’ Journal of Management in Engineering, 33(5).
Kim, K., Ha, S. & Kim, H. (2017) ‘Using real options for urban infrastructure adaptation under climate change.’ Journal of Cleaner Production, Volume 1, pp. 40-50. Web.
Li, Y. & Wang, X., (2016) ‘Risk assessment for public–private partnership projects: using a fuzzy analytic hierarchical process method and expert opinion in China.’ Journal of Risk Research, 21(8), pp. 952-973. Web.
Narayanaswami, S. (2017) Urban transportation: innovations in infrastructure planning and development. The International Journal of Logistics Management, 28(1), pp. 150-171. Web.
Okoye, C. O. & Oranekwu-Okoye, B. C., (2018) ‘Economic feasibility of solar PV system for rural electrification in Sub-Sahara Africa.’ Renewable and Sustainable Energy Reviews, 82(3), pp. 2537-2547. Web.
Shockley, J. M., Dillon , C. R. & Shearer, S. A., (2019) ‘An economic feasibility assessment of autonomous field machinery in grain crop production.’ Precision Agriculture, Volume 20, pp. 1068–1085. Web.
Wang, T. et al. (2016) ‘A major infrastructure risk-assessment framework: Application to a cross-sea route project in China.’ International Journal of Project Management, 34(7), pp. 1403-1415. Web.