The First Step in Feasibility Analysis
Project identification is the initial phase of the feasibility study process where potential project ideas are conceived, defined, and screened to determine their viability before significant resources are committed.
Collect potential project ideas from various sources including market needs, technological developments, resource availability, and government policies.
Brainstorming sessions, SWOT analysis, stakeholder interviews, trend analysis, and competitive intelligence.
Apply basic criteria to filter out obviously unviable ideas based on alignment with organizational goals, resource requirements, and legal constraints.
Does it align with our mission? Do we have the basic capabilities? Are there any obvious legal barriers?
Define the broad parameters of the project including objectives, potential stakeholders, and high-level requirements.
Project concept statement, preliminary stakeholder map, and high-level scope document.
Conduct preliminary evaluation of technical, economic, legal, and operational feasibility.
Basic ROI calculation, technology availability assessment, regulatory review, and operational capability check.
Document the project concept, rationale, and preliminary specifications for further analysis.
Project identification report, preliminary project charter, and recommendations for detailed feasibility study.
Typical project identification process flow with feedback loop
Identifying unmet needs, gaps in current offerings, or emerging trends in the marketplace.
A software company identifies a need for better project management tools for remote teams after analyzing market surveys.
Company XYZ conducted market analysis using surveys, focus groups, and competitor analysis. They discovered that 78% of remote workers struggled with time zone coordination in project management tools. This led to the idea for a new tool with integrated global time zone features.
New technologies or innovations that create opportunities for new products or services.
The development of blockchain technology led to numerous financial service projects.
A fintech startup monitored emerging technology trends and identified advances in machine learning algorithms that could detect fraudulent transactions with 30% greater accuracy. This technological development sparked the idea for a new fraud detection service for online retailers.
Identification of underutilized resources or new resource discoveries that can be leveraged.
A region with abundant sunlight might inspire solar energy projects.
A manufacturing company had excess factory space after consolidating operations. Resource analysis indicated 40% unused capacity. This prompted the idea to lease the space to smaller manufacturers or use it for a new product line, creating two potential project ideas from underutilized resources.
New government policies, regulations, or incentives that create project opportunities.
Environmental regulations might prompt waste management improvement projects.
When the government introduced a 30% tax credit for renewable energy installations, a construction company analyzed the policy change and identified an opportunity to create a new division specializing in residential solar panel installation, capitalizing directly on the new incentive program.
Addressing existing problems or inefficiencies in current systems or processes.
Traffic congestion might lead to urban transportation projects.
A hospital identified that patient wait times averaged 45 minutes higher than the industry benchmark. This problem led to a project idea for implementing a new digital check-in and scheduling system, with the goal of reducing wait times by 60% and improving patient satisfaction scores.
| Criterion | Description | Evaluation Method | Example |
|---|---|---|---|
| Strategic Alignment | How well the project aligns with organizational goals | Alignment matrix scoring | Each strategic goal is assigned a weight (1-5), and the project is rated (1-5) on how well it supports each goal. Weighted scores are calculated and summed. |
| Market Potential | Size and growth potential of target market | Market research analysis | Combination of TAM (Total Addressable Market), SAM (Serviceable Available Market), and SOM (Serviceable Obtainable Market) analysis with growth rate projections. |
| Technical Feasibility | Availability of required technology and expertise | Technical capability assessment | Evaluation of technical requirements against current capabilities, gap analysis, and technology readiness level (TRL) scoring on a scale of 1-9. |
| Financial Viability | Potential return on investment and funding availability | Preliminary cost-benefit analysis | Rough order of magnitude (ROM) cost estimate, preliminary NPV (Net Present Value), IRR (Internal Rate of Return), and payback period calculations. |
| Risk Assessment | Identification of potential risks and challenges | Risk matrix evaluation | Risks are identified and scored on likelihood (1-5) and impact (1-5). Risk score = Likelihood × Impact. Projects with multiple high scores (>15) may be rejected. |
| Legal/Regulatory | Compliance with laws and regulations | Legal review | Checklist of applicable regulations, legal consultation, and compliance rating (high/medium/low) for each relevant legal area. |
For a proposed mobile app project, company strategic goals are weighted as follows:
The project is rated against each goal:
Total alignment score: 52/70 (74% alignment with strategy)
For a new healthy snack product, market analysis shows:
For a company considering an AI-powered predictive maintenance system:
| Technical Requirement | Current Capability | Gap | TRL (1-9) |
|---|---|---|---|
| Sensor hardware | Available | None | 9 |
| Data processing infrastructure | Partial | Requires upgrade | 7 |
| AI expertise | Limited | Need to hire/train | 4 |
| Integration with existing systems | Available | Minor | 8 |
Average TRL: 7 (System prototype demonstration in operational environment)
For a new construction project, the risk assessment identifies:
| Risk Factor | Likelihood (1-5) | Impact (1-5) | Risk Score |
|---|---|---|---|
| Material cost inflation | 4 | 3 | 12 |
| Permit delays | 3 | 4 | 12 |
| Labor shortage | 5 | 4 | 20 |
| Weather delays | 4 | 2 | 8 |
Highest risk: Labor shortage (20) - This exceeds the threshold of 15 and requires mitigation planning.
Identification: City planners identified increasing traffic congestion and pollution as major problems affecting quality of life.
Screening: Evaluated potential solutions including road expansion, congestion pricing, and public transit improvements against criteria of cost, impact, and implementation time.
Outcome: Selected light rail transit project based on long-term sustainability and alignment with city's environmental goals.
Detailed Screening Process:
| Project Option | Strategic Alignment (1-5) | Financial Viability (1-5) | Technical Feasibility (1-5) | Risk Level (1-5) | Total Score |
|---|---|---|---|---|---|
| Road Expansion | 2 | 3 | 4 | 3 | 12 |
| Congestion Pricing | 3 | 5 | 3 | 4 | 15 |
| Light Rail Transit | 5 | 3 | 4 | 3 | 15 |
Final Decision Factors: Though both congestion pricing and light rail scored equally, the light rail option was selected due to its perfect strategic alignment score (5) with the city's long-term environmental and urban development goals.
Project Identification: Process of finding potential project ideas that address needs or opportunities
Screening Criteria: Standards used to evaluate and compare potential projects
Preliminary Feasibility: Initial assessment of whether a project is worth further investigation
Project Concept: Brief description of the project's purpose and approach
Stakeholder Analysis: Identification of parties affected by or interested in the project
SWOT Analysis: Evaluation of Strengths, Weaknesses, Opportunities, and Threats
Need Assessment: Process of identifying and measuring gaps between current and desired states
Opportunity Cost: The potential benefits missed when choosing one alternative over others
TAM (Total Addressable Market): The total market demand for a product or service
SAM (Serviceable Available Market): The portion of TAM targeted by your products and services
TRL (Technology Readiness Level): A measurement system to assess the maturity level of a particular technology
ROI (Return on Investment): A performance measure used to evaluate the efficiency of an investment
Example: For a local organic juice company, TAM might be the entire beverage market ($100B), SAM would be the organic juice market in their region ($5B), and SOM might be the expected market share they can capture in the first few years ($2M).
SWOT Analysis components:
In project identification, SWOT analysis helps identify potential project ideas by leveraging organizational strengths and market opportunities while addressing weaknesses and mitigating threats. It provides a structured framework for evaluating the internal and external factors that might influence project success.
Market analysis
Technological developments
Employee birthdays
Resource availability
To eliminate all but one project idea
To evaluate and compare potential projects systematically
To determine the final project budget
To assign project team members
Detailed cost estimation
Finalizing the project charter
Preliminary feasibility assessment
Executing the project plan
Likelihood + Impact
Likelihood × Impact
Likelihood ÷ Impact
(Likelihood + Impact) ÷ 2
A measure of how innovative a technology is
A measure of how expensive a technology is to implement
A measure of the maturity level of a particular technology
A measure of market adoption for a technology