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close this folder Session 5: Importance of feasibility/viability analysis
View the document Project assumptions

Session 5: Importance of feasibility/viability analysis

TIME: 3 HOURS

 

RATIONALE:

 

One of the dangers at the start of new projects and businesses is that Volunteers and communities may become so enthusiastic about the initial idea that there will be little attention given to the analysis of short-term and long-term likelihood of project success. Without sufficient information-gathering, adequate assessment of local resources, and coherent analysis of this data, projects begin with an already high probability of failure. Volunteers can contribute greatly to the chances of project success by ensuring that relevant information is obtained at the outset. This session will focus on the identification of the key elements of feasibility/viability analysis and their importance in project selection.

 

OBJECTIVES:

 

1. To determine the critical assumptions needed to test the feasibility of an income-generation project.

 

2. To identify the key elements in feasibility/viability assessment of a new or ongoing project.

 

TRAINER PREPARATION:

 

1. Read the attached articles "Project Assumptions'' and "A Management Approach to Feasibility Study,' before the session for background information.

 

2. Prepare newsprint for the following items:

- session objectives

- key points in project assumptions lecturette

- small group exercise instructions

- analyzing assumptions chart

- feasibility checklist

 

3. Copy the participant handouts.

 

MATERIALS:

 

1. Newsprint and markers

 

2. Paper and pens for the participants

 

PARTICIPANT HANDOUTS:

 

1. Project Assumptions

 

2. A Management Approach to Feasibility

 

3. Analyzing Assumptions

 

PROCEDURES:

 

Introduction:

(5 Min)

1a. Introduce the session by explaining to the participants that project ideas are often rushed through the system because they "seem" to be what is needed, without taking into account all of the potential problems which could interfere with their success. Go over the rationale for the session, as written.

 

1b. Review the objectives for the session (already on newsprint) and clarify any questions the participants may have regarding them.

 

Lecturette on Feasibility/Viability:

(10 Min)

2a. Deliver a short lecturette on feasibility/viability analysis, stressing the following points:

 

Feasibility: describes the short-term success potential of a project. If the project works HERE and NOW technically and economically, it is feasible.

 

Viability: deals with the long-term aspects of the project. This means that there will be a sufficient profit to allow reinvestment and that repairs and business decisions will be made by group members to allow long-term sustainability.

 

analysis: means that the information collected is reviewed in a detailed, systematic and timely fashion-not accepted at face value.

 

2b. Ask the participants now the concepts are related to each other and why it is important to clarify each before the onset of a new project.

 

Identification of Project Assumptions:

(30 Min)

3a. Prepare and deliver a lecturette based on the "Project Assumptions" article and covering the following points:

- the necessity of making assumptions in projects

- the categories of assumptions (social, political, technical, economic, physical, etc.)

- the importance of examining the project assumptions carefully before beginning the project

- the importance of "assumptions" to answer the following:

 

This project will succeed, assuming that:

 

a. __________________________________

 

b. __________________________________

 

c. ___________________________________

 

3b. Put one of the assumptions categories on newsprint. Select one of the projects already discussed in the previous session on goals/objectives, and have the participants generate a-6 specific examples of items to be included in each category. Challenge any examples which seem inappropriate or vague.

 

3c. Point out to the group that testing all the assumptions in a project before implementation would be a time consuming and potentially expensive task. Stress that it is, therefore, important to decide which assumptions are the most important for success and to focus on them in feasibility testing.

 

3d. Have the participants look at the list just generated and rank the assumptions according to their importance. Lead a large-group discussion of any questions/comments regarding the rankings.

 

Individual Work:

(20 Min)

4a. Explain to the participants that this process of identifying and ranking assumptions for feasibility testing is important for all projects, large or small. Assign the following task for the participants to complete individually (already on newsprint):

 

- refer to your project/activity objectives developed in the previous session on Setting Goals and Objectives.

 

- develop and rank a list of important assumptions for the objectives, using the categories developed above.

 

4b. Ask for a volunteer to read one of his/her objectives and the assumptions developed. Have the large group critique it and make any necessary improvements.

 

Work in Pairs:

(15 Min)

5a. Divide the participants into pairs to critique each other's assumptions. After 5 minutes, have the reviewers explain their critiques to the writers. Allow sufficient time for the participants to complete any necessary rewrites.

 

Closing:

(10 Min)

6a. Close this portion of the session by leading a large group discussion of the following questions:

 

- Considering the kinds of assumptions we have identified, what does this tell you about the role of the Volunteer in project development? About the role of the community?

 

- What do you see as the possible consequences of a Volunteer proceeding with a project that has made wrong assumptions?

 

TRAINER NOTES

 

Ensure that information about the danger of the PCV acting as a "Lone Ranger" in project design comes out here, sod that the community's knowledge of its own problems and historical interventions is acknowledged.

 

BREAK

 

TESTING PROJECT FEASIBILITY

 

Lecturette:

(15 Min)

7a. Deliver a lecturette on sensitivity analysis and project assumptions, stressing the following points:

 

- a feasibility study does not have to be extremely complex and time-consuming, but it should contain enough information to indicate that the best solution to the community problem has been selected.

 

-the project assumptions and the resource needs identified earlier will become the basis for the project feasibility study.

 

- one way of analyzing the projects assumptions is through a sensitivity analysis, which asks the question, "What if?" For example:

 

If a chicken-raising project assumes that 10 % of the chickens vaccinated will die......

 

What if 20% die instead of 10%? (Will the project still be economically feasible?)

 

What if 15% die? (Will the project still be economically feasible?)

 

The project also assumes that the price for a healthy 3-pound chicken is $. 50......

 

What if the price goes down to $.40? To $.30? (How far down can the price go, given our other assumptions, and the project still remain feasible?)

 

Through the analysis of a project's critical assumptions, one should be able to ascertain how much variability there can be without endangering feasibility. The information gathered from the sensitivity analysis may force a redesign or cancellation of the project.

 

Analyzing Assumptions:

(5 Min)

8a. Introduce the "Analyzing Assumptions" chart by explaining to the participants that it offers one way to identify the critical questions about a project:

- Is it essential for project success?

- How certain is it that the assumption will hold true?

 

8b. Point out that, when assumptions are uncertain, it becomes necessary to test their feasibility, and it is very important to know the types of questions which need to be asked.

 

Individual Exercise:

(20 Min)

9a. Instruct the participants to look at their project assumptions according to the steps of the "Analyzing Assumptions" chart and choose one assumption that they feel is uncertain. Ask them to develop a written checklist of feasibility questions they would want to ask for that assumption.

 

TRAINER NOTES

 

Included in the list of questions should be:

 

- How much risk or uncertainty is involved in the assumption?

 

- How crucial is the assumption to the overall success of the project?

 

- What is the impact on the project if the assumption does not hold true?

 

- What alterations can be made in the project while still maintaining its likelihood of success?

 

- If outside resources are required, what is the likelihood of obtaining them? From what source?

 

- Have projects with similar assumptions succeeded in the past? What data is there to support this?

 

Individual Presentations:

(20 Min)

10a. Reconvene the participants, and have volunteers present their assumption and list of critical questions they would ask about it. As the individuals are presenting, make a generic list of the items included. Ask the large group to review the list and add any other items they have thought of during the presentations. Copy the list for the participants to take with them for future use.

 

Large Group Discussion:

(15 Min)

11a. Lead a large group discussion of the following questions:

 

- What methods can project designers use to get more information on the feasibility of the assumptions they have made?

 

- To whom would they talk?

 

- What data sources would they use? How long would they take to complete the feasibility study?

 

TRAINER NOTES

 

Included in the list should be the following:

 

Examine official records (country and PC)

- statistics collected by government.

- records on projects, money spent, etc.

- needs assessment data, if collected.

- monitoring forms, if used.

 

Discussions

- individual interviews (community and elsewhere.)

- group meetings.

- experts.

 

Observation

- visiting a similar project

- observing existing situations

 

11b. Review 4 -5 questions on the list just developed and have the large group recommend methods for studying them. Challenge the group specifically on the type of information they would expect to learn through the study. Also focus on what timeframe they would anticipate would be sufficient to obtain enough information to either move forward or cancel the project.

(10 Min)

Closing:

(5 Min)

12a. Summarize the work of the session by pointing out that thorough feasibility testing can help to avoid unanticipated problems during the implementation of a project by pointing out the key issues which the PCV and community need to consider. Some of the issues identified will cause the project to be cancelled; others will necessitate redesigning it on more realistic terms. Each of these courses of action can help to conserve scarce human, material, and financial resources for the community.

 

12b. Pass out the handouts for the participants to keep as reference material.