Will Witt helps companies
and private investors maximise the ROI on their projects
Feasibility Studies | Feasibility Study
"Will your project produce Sufficient Return on the Investment of your Time and Money to make the whole thing worthwhile"
The SHORACE Story
What is a Feasibility Study?
You have probably landed on this page after searching for the term "Feasibility Study". It is a very commonly used term that is used to describe the activities required to establish a new facility for innumerable different purposes.
Feasibility Study is a total misnomer!!!
You may have been told that you must do a feasibility study. But you do not want to know if a particular concept is feasible - You know that already.
What you really want to know is - what do I need to do to answer the question;
"Will this project produce Sufficient Return on the Investment of my Time and Money to make it worth bothering with"
If you look at my biography on the "Meet Will Witt" page you will see that I have spent most of my working life doing Feasibility Studies and Master Plans (A special sort of Feasibility Study).
Throughout my working life I have wondered about the term "Feasibility Study" and the misunderstandings that result from the way it is used. This page tells the story of how an alternative approach can be used that produces a much better ROI - or will tell you at an early stage that the project is not viable.
Very Large Projects working as a Consultant to KBR
I worked for 10 years as a specialist consultant, on very large projects, to one of the biggest and most infamous engineering construction company called KBR (Kellog Brown & Root) between 1995 and 2005. It was then owned by Halliburton the company where the the US vice-president Dick Cheney was CEO.
Frequent discussions on the Scope of Feasibility Studies
Because of the frequency that Requests for Proposals (RFP) for Feasibility Studies passed across my desk I was constantly in discussion with the other "Gurus" in KBR on what should and should not be included in these proposals.
Every RFP was different showing that great uncertainty existed throughout the industry on what should be included or excluded from a feasibility study.
Millenium Project Failures
It was about this time that all the Millenium Projects were being developed.
There was great hilarity around the office when we heard the latest industry horror stories about the Millenium Dome, The Portsmouth Spinnaker and the many other projects funded by the UK lottery that were a disgraceful waste of the publics money.
By the way I exclude the Eden Project and the London Eye as they have both been outstandingly successful - it shows that it can be done by good project managers.
"Missing Link" in the Project Development Process
As this went on I became more and more intrigued by the apparent "Missing Link" from the early stages of project inception and development.
It was strange because the construction industry is studied to death by academics and researchers but there is very little published literature on actually how to get a new project up and running.
One of the leading Oil Companies Project Development System
Then by pure coicidence l was introduced to a highly, focussed systematic project development process that had been developed by one of the major oil companies in the late 1990's.
It was designed to overcome problems that the oil company had been having with the development of its own projects. It was developed and put into operation at great cost - but it worked
We scoffed at it to start with
Very experienced engineers always scoff at all new ideas and I was very sceptical about it to start with. There was a lot of mickey taking about all this weird jargon that the oil industry guys were using and imposing on us.
Simple Concept
It was simple concept that involved;
- Identification of a project framework
- Systematic identification and analysis of alternative ways of achieving the project objectives
- Repeated testing of the project's viability at each Step
- The deployment of a project communication plan
Although the concept is simple, implementation is complex because of the number of issues involved. As I used it more and more over a two year period I realised that it was a very powerful tool that would lead to better projects if properly deployed.
The "Eureka" moment!
This was a "Eureka" moment for me because I quickly realized that the approach could have been used in just about every project that I had ever been involved with.
I could not do much with the idea at the time because of the pressure from the projects that I was working on.
The Core Element of Shorace
The core element of Shorace that sets it apart from the conventional approach to feasibility studies is the systematic identification and analysis of alternative ways of achieving the project objectives.
What is it that makes this so important?
The answer lies in the following ration;
1 : 5 : 200
I know that you could ask hundreds of construction professionals what this ratio represents and they would not know!
It is never 100% accurate but it is a rough relationship between the following;
Building Capital Cost : Total Building Operating and Maintenance Costs : Total Salary Costs of the people that will work in the building
In other words, even after discounting is taken into account your ROI will be predominantly determined by the productivity of the people that will work in the project, partially determined by Opex and not affected at all by the Capex.
So the only way to maximise your ROI is to examine every available alternative and tune the better options based on your NPV analysis.
If you are reading this and you are experienced in Feasibility Studies you will know that the study of the alternatives is predominantly carried out in a very ad hoc way during a process that is often called a "Pre-feasibility study"
It is no wonder that so many projects go badly wrong!
The Development of SHORACE
I have now have now developed Shorace into a system that can be used for all types of engineering and construction projects.
I have called it SHORACE an ancronym derived from the names that I have given to the first 4 steps of project development followed by the Execution Stage.
It is not a Panacea
To be frank it is not a panacea that will make a bad project manager a good one.
It is just a framework that will encourage a good project manager to produce the goods - a high ROI - or an early recommendation to close the project before any more money is wasted.
The underlying principle is that you develope your a Stage at a time and test your project against the yardsticks laid down during the 1st Stage.
Your project must past each test or the yardsticks need to be changed - and the senior management must be consulted about such a change.
Readers and Your Problems
If you are reading this I expect that you have a project to develop - many readers will be new to the whole concept of project inititiation. Many more will be brushing up on their techniques because if my experience is anything to go by many will be very uncertain as to how to tackle their problem.
The Problems involved in getting a Project started
You are probably;
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Confused by the massive amount of conflicting advice and information on how to even start and what is this thing called a "Feasibility Study" that everyone keeps on about
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Perplexed by the difficulty of actually getting started
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Concerned by possibility that you might spend a lot of time and money and not get value for it
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Uncertain as to what the Scope of the project should be
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Worried about how much it is going to cost
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Frustrated because you seem to be going round in circles
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Anxious about the risks that might be involved
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Nervous about personal responsibility for the project
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Terrified that it will be disaster project that massively overruns budget and schedule
The SHORACE process can deal with all these issues.
What is SHORACE?
It is a project inception and execution process that concentrates on all the main issues that are germane to the project At the Appropriate Stage During the Project Development Process
In other words you will not be committed to massive spending on all kinds of special surveys and investigations until they are absolutely necessary and more importantly
"You Know What You Need To Know"
and not what some self-interested consultant tells you what you need!
How do I find out about it?
Follow this link Information on SHORACE
If you decide to become a SHORACE member you will be able to immediately download the White Paper on Shorace that gives an overview of the system and how it works.
If you want more detailed information you can buy the Ebook by following the link "Shorace - How to Respond when Opportunity Knocks"
I look forward to hearing from you
SHORACE
SHELL - OPTIONOLOGY - REFINEMENT - ACCORDANCY - EXECUTION
A proprietary system designed to maximise the Return on Investment in every type of project (except software) and developed by
Piexe Limited Registered in England No 6348048 at 145 - 157 St John St, EC1V 4PY, London
Get all the benefits that are listed here if you become a Member of Shorace - and it is Totally Free
Buy the Ebook "Shorace - the Simple Way to Increase Project ROI"
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FAQ's
Master Planning
Sample Feasibility Study
What is the difference between a business plan and a feasibility study?
The old obsolete approach to construction project appraisal