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The current trend globally for a company to boost the business is using the project to help with the management process. With the industrial and business environment growing more sophisticated and complex than ever, whether a company or an organization can accurately predict the outcome of the project become vital for their project selection, decision making and eventually the performance of themselves. To make a better prediction, a process called Project Viability Assessment has been introduced in the project management process to be run before a company is committed to a certain project to make sure both the company and the client or any stakeholders can have a better result when the project is finished.
Sometimes, this process referred to by different names such as Feasibility Assessment, Project Feasibility Analysis, Project Viability Assessment, etc. In this assessment onwards, Reasons why this can be benefiting for a project Whit a very long list of failed projects, ranging from product developments to government social programs, from computers to pharmaceutical, and from public transit to supersonic transport, reminds us of this reality (Cicmil et al.
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2006; Gulla 2012; Lemon et al. 2002; Standish Group 2013). Many projects do not live up to their expectations or fail even before their technical completion in spite of careful feasibility analysis during their proposal or selection stages (El Emam and Koru 2008; Shore 2008). Because projects are run by companies or organizations and they are run by human beings, so there are loads of differences and uncertainties need to be dealt with for each one of the projects.
The uncertainty characterizes situations where the actual outcome of a particular event or activity is likely to deviate from the estimate or forecast value. It follows that decision making becomes more difficult as uncertainty grows. Further, that the availability of relevant information increases predictability and reduces uncertainty seen from the decision maker’s point of view.
Accessing more information means more accurate assessment for an individual project. Being has more certainty and situation under control is the key to make sure a project can go as planned. Figure 1. Uncertainty vs. available relevant information in a project.
The information gathered in the vitality assessment should include factors as the market, technical, operational of the project; identify key issues or milestones and assess project risks, or have the contingency plan in place to be more ready for high impact risk factors. [6] As a part of the project life cycle, growing became more important, the viability assessment is the very first step towards the final success of projects. This is due to that the feasibility/viability study provides a basis for the decision on whether a project is to be implemented or not. In this process, a feasibility/viability study has been used to support a decision making for the stakeholders regarding the selection and prioritization of projects. (Yun and Caldas, 2009; Ziara et al., 2002). The viability assessment process is a commonly used project management practice by different companies before they have made the final selection on which project they want to carry on with. An investigating and research function is normally provided by the feasibility phase. A viability study is performed before the business plan. After the business plan has been considered to be feasible, a business plan is then developed.
In a standard project life cycle model, there are 4 typical parts in this structure which are Project Starting, Project Organizing Definition Planning, Project Execution, Project-Out. (PMIa 2008, p 16). According to a study carried out by Russell, Ivano, and Daniele, they have proposed 2 additional project phases on the original Comprehensive Project Life Cycle Model mentioned up above. The two added new components are Incubation Feasibility and Post-Project Evaluation [6] Figure 3. Proposed six-phase comprehensive top-level project life cycle model.
A brief discussion here on both elements based on my own experiences: The Incubation Feasibility: As the main topic of this article, I can’t agree more how important this is to a project in real life. Without it, a company most likely can make a mistake which we called ‘Over Commitment’. In this situation, it happens mostly because the sales team is not having effective internal communication with the operation team. Once the contract is signed, one thing is guaranteed is the client will not happy about the result and will cause damage to the company both finically and even the trust between these two parties. Post-Project Evaluation: This is a normally ignored phase for too many companies or organizations. It is a common mistake globally. Although, we always want to keep up with the fast pace in the current business environment and we always don’t have enough time to do anything, this where most people making the mistake. They just moved on to ‘the next project’ without spending any time on the previous one. The reason this part should be valued by any companies is this is a very important opportunity for them to conclude what they can learn or improve for the next project. A well appreciated Post-Project Evaluation session can and will save tonnes of money and time for a company in the long run. This is will eventually form a knowledge base which will be priceless for any type of company.
From the proposed the project life cycle model, we can see that the life cycle of a project starts at the Incubation/Feasibility Phase. In this stage, regarding on the project feasibility aspects as overall economic, technological, political, social, and physical feasibility of the project, including the level and acceptability of the various risks that are involved.
Normally, the project is not officially authorized to entering the next stage of Project Starting. Once the project is selected and ready for the feasibility assessment, then the next step comes down to developing a set of criteria for the assessment. With each criteria, it should be assigned certain scores and weights for the final score calculation. So, it is quite clear that all of the criteria developed should be quantifiable. From a published study on the Journal of Economics, the figure 2 demonstrated what actives should be included in a Feasibility or Viability study: Figure 4. Actives of Feasibility [8] It is a common sense that to conduct a viability study requires multiple business units cooperation to come up with a more accurate assessment report.
Different function department and business units such as Sales, Operation, Finance, Legal, HR, Marketing, Procurement, etc. With all the effort came from all of them, the result of the assessment will become more authoritative than it only generated by one party. Typically, while doing the viability assessment, most of the major issues will be examined roughly, especially trying to identify if the potential solution exists already or how much possibility the company stands for to be able to reach a solution for it. If the foreseeable issue is too big, there should a separate assessment just focusing on that. Issues come in different forms and directions, such as internally (cost, personal, technical) or externally (market change, transportation, government regulations shifts). Few predictions need to be made as the life cycle of the project can be fairly long and the project execution and the market and some other factors are not static. They are changing dramatically in the entire lifespan of the project. So, being able to identify certain elements that will stay relatively predictable direction or even stable will definitely improve the accuracy of the final result.
Eventually, this report will provide answers to the following questions:
As you can see, these questions are rather generic without considering different industries or businesses, still, it provides a great example for us to understand this the coverage of the viability assessment. With a comprehensive and project-specific viability assessment, the decision maker in the company can decide whether there will be economic returns from selecting this project. It will be the best investment a company can ever make to achieve long-term business success. After all of the research on this topic, I have found a rather different reason or aspect of why viability is one critical step in project management or even to healthy running business, it is because it can tell which project should not to proceed. This one benefits alone can potentially save the most of the project based companies or organizations.
Finally, in this assignment, I have learned more details on the topic of the Project Viability Assessment. It should serve as an analytical tool prepared for the decision-making process and help the decision-maker to determine the project selections and the fate of the company. Personally, part of this process can also help us to achieve more in our life. Being able to identify difficulties and get prepared for them will help for sure individually.
Business Analytics: Project Viability Assessment. (2024, Feb 06). Retrieved from https://studymoose.com/business-analytics-project-viability-assessment-essay
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