Feasibility Study Quarter

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

• The Quarter is designed to introduce its learners to enterprise discovery, or, in other words, to concepts related to obtaining data needed to administer the enterprise effort; and
• The Quadrivium examines concepts of administering various types of enterprises known as enterprise administration as a whole.

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.

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 the proposed change implementation is a single project, a cost-benefit analysis may be needed. If the proposed change refers to the enterprise portfolio, another evaluation, portfolio appraisal, is needed. A feasibility study is feasible itself when its change stimulus is a business opportunity. If its change stimulus is a business need, no feasibility study is needed; business analysis is conducted instead. The change support analysis may be feasible for bureaucracies.
   • Change. In enterprise administration, the act or instance of becoming different and/or doing business differently.
   • Organizational change. Creation and/or creative alteration of how the organization conducts its overall business and/or what it offers to its stakeholders. The change can include its enterprise portfolio, organizational structure, people, work environment, technology, etc.
   • Business strategy change. Creation and/or creative alternation of a business strategy. This proposed change may be a new or existing product on the market, its scope or features, pricing, presentations, production personnel, and/or way of production usually in order to (a) offer new and/or additional benefits to the customer and/or (b) serve some organizational needs.
   • Unexpected change. Change activities that are unintentional and not necessarily goal oriented.
   • Planned change. Change activities that are intentional and goal oriented.
   • Proposed change. Any change that is proposed to be implemented.
   • Proposed change implementation. The implementation of the proposed change. This implementation can be a project or a strategic decision, especially related to the enterprise portfolio.
2. Idea evaluation. An appraisal of potential solutions to problems to identify the best one.
   • 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.
   • Idea prioritization. The process that arranges proposed changes in order of importance relative to each other.
3. Cost-benefit analysis. Studies 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, is the primary target of the feasibility study if the proposed change is a project.
   • 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. 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 product scope, a product scope needs to be developed first of all.
     1. Product scope. All the features and functions that characterize a product.
     2. Effort estimate. The expected effort or work that needs to be accomplished to deliver a product with the specified features and functions.
     3. Schedule estimate. The expected time of the delivery of a product with the specified features and functions.
   • Change benefit estimate. The expected total value that the enterprise is going to obtain after a proposed change is implemented. In other words, it is what the enterprise is going to obtain as a result of the proposed change implementation. This expected value may have several components and, therefore, several evaluations may be needed. The components may include political, economic, social, and technological benefits. compliance and configuration feasibilities may be needed to be assessed before the benefit evaluations.
     1. Compliance feasibility. An assessment of how the proposed change would conflict with legal, corporate, and other mandated requirements.
     2. Configuration feasibility. An assessment of how the proposed change would conflict with existing systems that the enterprise already employs.
     3. Political benefit. A political advantage gained from the proposed change implementation.
     4. Economic benefit. A profit gained from the proposed change implementation.
     5. Social benefit. A social advantage gained from the proposed change implementation.
     6. Technological benefit. A technological advantage gained from the proposed change implementation.
4. 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.
   • 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.
   • Competitor 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.
   • First mover. An enterprise that's first to bring a product innovation to the market or to use a new process innovation.
5. Enterprise portfolio. A collection of all businesses in which a particular organization is.
   • Startup business (or, simply, startup). A business in its search of its business model or its ways of making money.
   • Ongoing business. A business that executes its business model in order to make money.
6. Portfolio appraisal. An appraisal of practical potentials of enterprise portfolios undertaken in order to identify the best one.
   • Business strategy. The formulation of how an organization is going to compete in a particular business. This formulation may or may not include (a) what products, (c) resulted from what production, (d) at what price, (e) using what presentation, (f) on what market, (g) with what people, (h) with what level of organization's support this organization is going to offer, as well as (i) what financial results and/or competitors' actions would trigger what changes in those decisions. Rarely, a mature organization formulates just one business strategy; usually, there are several business strategies in the organization's enterprise portfolio since both/either different divisions may have their own business strategies and/or different business strategies are developed for different products, regions, and/or segments of customers.
   • Organization. A consciously coordinated social unit, composed of two or more legal entities, that functions on a relatively continuous basis to achieve a common goal or set of goals.
7. Change support analysis. An evaluation of the stakeholder support of the proposed change and, vice versa, the resistance to this change.
   • Restraining force. A force that hinders movement from the existing equilibrium (Kurt Lewin).
   • Change agent. An individual who acts as a catalyst and assumes the responsibility for supporting proposed change implementation.
   • 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.

Methods

1. Idea evaluation technique. An established procedure for carrying out idea evaluation.
   • Visual comparison. An idea evaluation technique that represents a comparison of two or more proposed ideas by eye. The ideas may be placed side by side, overlaid, or being dynamically alternated. This technique also include a pairwise comparison.
   • Scoring. An idea evaluation technique that encourages its participants to score proposed changes with one or more criteria in order to prioritize those changes. This technique also include the five star assessment and pass or fail test. Those techniques can be implemented in various ways, either online or onsite, including a simple or anonymous voting.
   • ROI estimating. An idea evaluation technique that represents an attempt to expect the return on investment (ROI) ratio for a proposed change.
   • Proof of concept. Evidence, typically derived from an experiment or pilot project, which demonstrates that a design concept, business proposal, etc., is feasible.
2. Funding. The act of providing financial resources, usually in the form of money, or other values such as effort or time, to finance a need, program, and project, usually by an organization.
   • Equity crowdfunding. The online offering of private company securities to a group of people for investment and therefore it is a part of the capital markets.
   • 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.
   • Venture capitalist. External equity financing provided by professionally managed pools of investor money.
3. Project estimate technique. An established procedure for carrying out project estimating.
   • Precedence diagramming method (PDM). A network diagramming technique in which activities are represented by boxes (or nodes). Activities are linked by precedence relationships to show the sequence in which the activities are to be performed.
   • Critical path method (CPM). A network analysis technique used to predict project duration by analyzing which sequence of activities (which path) has the least amount of scheduling flexibility (the least amount of float). Early dates are calculated by means of a forward pass, using a specified start date. Late dates are calculated by means of a backward pass, starting from a specified completion date (usually the forward pass' calculated project early finish date).
   • Program Evaluation and Review Technique (PERT). An event-oriented network analysis technique used to estimate program duration when there is uncertainty in the individual activity duration estimates. PERT applies the critical path method using durations that are computed by a weighted average of optimistic, pessimistic, and most likely duration estimates. PERT computes the standard deviation of the completion date from those of the path's activity durations.
     1. PERT network. A flowchart diagram showing the sequence of activities needed to complete a project and the time or cost associated with each.
     2. PERT activity. The time or resource needed to progress from one event to another in a PERT network.
     3. PERT event. End point that represents the completion of major activities in a PERT network.
4. Risk evaluation technique: An established procedure for carrying out risk evaluation.
   • Assumptions analysis. A technique that explores the assumptions' accuracy and identifies risks to the project from inaccuracy, inconsistency, or incompleteness of assumptions.

Instruments

1. Idea evaluation tool. A tangible or software implement used to carry out idea evaluation.
   • Pros and cons table. An idea evaluation tool that usually represents two columns, one of the advantages called "pros" and another for disadvantages called "cons."
   • What if question. An idea and risk evaluation tool that encourages asking "What if?" while evaluating an idea.
   • Should we question. An idea evaluation tool that encourages asking "Should we?" while evaluating an idea.
2. Project tool. A tangible or software implement used to carry out project estimation.
   • Gantt chart. A project 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. The chart was initially developed by Henry Gantt.
3. Market analysis tool. A tangible or software implement used to carry out market analysis.
   • SWOT framework. A market analysis tool that maps the analysis of the organization's strengths, weaknesses, opportunities, and threats.
     1. Strength. Any activity the organization does well or its unique resource.
     2. Weakness. An activity the organization does not do well or a resource it needs but does not possess.
     3. Opportunity. A positive trend in the external environment.
     4. Threat. A negative trend in the external environment.
   • Porter's five forces framework. A market analysis tool that maps the analysis of competition of a business. The five forces include (a) threat of new entrants, (b) threat of substitutes, (c) bargaining power of customers, (d) bargaining power of suppliers, and (e) industry rivalry.
4. Risk evaluation pattern. A three-step pattern used to evaluate risks. Risks are identified first, qualitatively analyzed and prioritized second, and those, that are selected as the most important, quantitatively analyzed third.
   • Risk identification. Determining which risks might affect the project and documenting their characteristics.
   • Qualitative risk analysis. Performing a qualitative analysis of risks and conditions to prioritize their effects on project objectives. It involves assessing the probability and impact of project risk(s) and using methods such as the probability and impact matrix to classify risks into categories of high, moderate, and low for prioritized risk response planning.
   • Quantitative risk analysis. Measuring the probability and consequences of risks and estimating their implications for project objectives. Risks are characterized by probability distributions of possible outcomes. This process uses quantitative techniques such as simulation and decision tree analysis.
5. Portfolio appraisal tool. A tangible or software implement used to carry out portfolio appraisal.
   • BCG matrix. A strategy tool that guides resource allocation decisions on the basis of market share and growth rate of strategic business units.
   • Strategic business unit. A single independent business of an organization that formulates its own competitive strategy.

Practices

The successor lecture is Business Modeling Quarter.