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.
   • 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.
   • 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.
   • Planned change. Change activities that are intentional and goal oriented.
   • Unexpected change. Change activities that are unintentional and not necessarily goal oriented.
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. A set of 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 the defined scope of work has been completed. In simple words, it is what the enterprise is going to lose as a result of the proposed change implementation. Because the budgets likely depend on the payroll and the payroll depends on work time, schedule feasibility needs to be evaluated before the budget. Because the work time likely depends on the project scope, effort feasibility needs to be evaluated before the work time. Because the project scope definitely depends on the product scope, deliverable feasibility needs to be evaluated first of all.
     1. Product scope estimate.
     2. Project scope estimate.
     3. Project schedule estimate.
   • Change benefit estimate. The expected total value that the enterprise is going to obtain when a proposed change is implemented. Because this value shall have several components, several evaluations may be needed. The components may include economic, social, compliance, and configuration ones.
     1. Configuration feasibility.
     2. Compliance feasibility.
     3. Economic benefit.
     4. Social benefit.
     5. Political benefit.
     6. Technological benefit.
4. Market analysis.
   • Market.
   • Market research.
   • 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.
   • Competitor intelligence. Gathering information about competitors that allows managers to anticipate 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.
   • Restraining force. A force that hinders movement from the existing equilibrium (Kurt Lewin).
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.

Methods

1. Idea evaluation technique.
   • Funding: Most people are familiar with getting budget from within their company, but crowdfunding is another way to validate ideas. A great example is, of course, the Kickstarter model which not only empowers individuals to collect money for their ideas, it also validates that there’s an audience for their idea in the first place.
   • Proof of concept.
   • Pairwise Comparison: Organizations will put up ideas right next to one another and ask which idea is preferred? This generates a ranking system for an entire list of ideas with the most commonly chosen ideas appearing on top and the least selected at the bottom.
   • the five star assessment, idea scoring, ROI analysis.
   • Pass/Fail: Pass/fail is pretty easy. Ideas must meet specific required criteria in order to be considered and/or move forward in the selection process.
   • Anonymous voting
2. Project estimate technique.
   • 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.
3. Risk evaluation technique:
   • 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.
   • Pros and cons table.
   • What if question.
   • Should we question.
2. Project estimate tool.
   • Bar chart. A graphic display of schedule-related information. In the typical bar 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. Also called a Gantt chart.
3. Market analysis tool.
   • SWOT analysis. An 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.
4. Portfolio appraisal tool.
   • 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.