When we talk about the viability of an issue or a project, we refer to how likely it is to carry something out, to materialize it in reality. Therefore, and depending on the context, viability may have to do with the physical, logical, economic, or other possibilities (or even all of the above) that affect the project or the issue.
That is why determining the viability of a project before undertaking it is usually a behavior or aspiration related to different trades and professions, since no one would want to invest time, effort, and resources in a project that, from the outset, shows signs of not being able to take finished.
There are even professions dedicated to it: to determine, for example, the margin of success (and therefore the margin of risk ) that there is in a project or an investment. This is known as “feasibility analysis.”
Logically, the feasibility analysis must be carried out before making decisions, and it is usually an important factor to take into account when investing, having resources, or even committing to a project.
Feasibility and feasibility
The difference between something feasible (that can be done) and something feasible (that could be done) is small but significant. Normally both terms are used synonymously, but if we dig a little deeper, we will perceive the difference between one and the other.
Thus, feasibility has to do with the objective features of a project, which show that it can in fact be done; while feasibility has to do with the circumstances, and suggests the probability that it can be done successfully. In other words, what is feasible is what can undoubtedly be done, while what is feasible is what, apparently, can be carried out.
Technical feasibility is a type of feasibility, determined by the technical elements of the project or issue. In other words, those elements that have to do with the processes and mechanisms on which the project depends, such as tools, specialized knowledge, energy, etc.
Thus, when a project is technically feasible, this means that, from a strictly technical point of view, that is, taking into account knowledge and tools, it is highly likely that it can be carried out successfully.
For example: for a computer specialist it is feasible to repair a damaged netbook since they have the knowledge and tools (that’s why we call it “technical support”). That does not mean that it is 100% safe to fix it, but it does mean that, from a technical point of view, it has all the elements to make it so.
Similarly, economic viability has to do with the economic aspects of the project, that is, it refers to capital or financial resources, which will allow the project to be launched and/or acquire the elements that are needed. We refer, then, to the material resources necessary for the project.
For example: to start a canning factory, not only technical aspects are needed, but also economic ones: financing capacity through loans, debts or investors, or the company’s own capital, which may be its own founders, for example.
Furthermore, it would not make sense to start the factory without having the money to pay wages, pay for services ( electricity, water, etc.) and buy the machinery.
How is the viability of a project analyzed?
There are very different methods of analyzing the viability of a project, and each one proposes a different set of criteria: SWOT (Strengths, Opportunities, Difficulties, and Threats), VIA PRO, PEST, PESTEL, are examples of possible analytical procedures.
However, any feasibility analysis is based, broadly speaking, on a review of the fundamentals of the project, which are generally approached from a three-fold perspective:
- The product or service. This is an analysis of the characteristics of what is offered, that is, the product to be manufactured or the service to be provided, taking into account its inherent properties (without taking into account the context): its quality, its versatility, its potential. , its originality, etc.
- The structure. It is about the analysis of the project management, that is, the composition of its work teams, the internal organization of its processes, or the way of conceiving the production methods. But the system of costs, payments, and dividends that will sustain the project and allow it to be perpetuated over time is also taken into account, that is, the accounting analysis.
- The market or environment. It is about the analysis of the context of the project, that is, of its market niche, its target audience, and the historical conditions that accompany it. Every project has a real-world in which to insert itself, and this must also be taken into account.