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Could a feasibility study be the most important thing you do this year?
This blog has been co-written by Richard Fletcher MD of Ignys electronics design and software development consultancy who has over 20 years experience in electronics and has seen the good, bad and the ugly when it comes to projects that have gone ahead, with and without a good feasibility study.
What is a feasibility study?
A product feasibility study looks at whether the thing you are trying to do, the way you are trying to do it, is actually possible. Are you approaching this in the right way?
A feasibility study is largely used to try and address as many of the foreseeable risks at the start of a project so you don’t get to the end and find a major unforeseen roadblock. At Ignys we often talk about ‘failing fast’ and how this can be a powerful thing that helps you achieve your end goal faster and more cost effectively.
It’s all about saving time and money in the long run. In other words, it is a de-risking exercise. As well as getting the specification of the products that meet your specification right.
A good product feasibility study will consider:
- Is it impossible – Are you breaking the laws of physics?
- Technology – Are the parts you want to use available to you?
- Risks – Is what you are trying to achieve very aggressive?
- Is the desired customer price compatible with the unit costs?
The question you are asking with this process
“Is my idea viable?” What you are really asking is this. I’ve got an idea, what are the key problems this idea is trying to solve and how many unknowns will be present in this project.” Eliminating or working round these unknowns will allow your project to be more successful. That is assuming of course the feasibility study finds a solution that means that your idea is still possible and within budget. Do you really want to find out a long way into development that the approach taken for your idea isn’t feasible?
The end goal is the product’s purpose, not your dream
Ask yourself, what is my product’s true purpose? Not the dream that you have in your head. You have an innovative product solution to a real customer problem. If you can achieve that solution whilst adapting some changes as to how you plan to do that, it will still meet the vision you set out to achieve. You can still change the world; it just might need to be in a slightly different way.
What is more important. The right price or the best features?
You will have a price in mind you are planning to sell at, for example you may plan to retail the product at £120,but if the Bill Of Materials (BoM) brings the total to £250 a unit this isn’t going to work.
You may have a desirable price but which has a very heavy feature set. This will drive the costs of development and production up. There is a trade off here between profit margins, Return On Investment and sales volumes which you need to think about.
Often you will need to choose between making the product more expensive to the customer but providing them with all the best features or omitting some of those desirable extras.
One solution to this is to launch a product, that meets your price target, with only the necessary features. Once the product has been established with good customer feedback and social proof you can then launch a premium version with the ‘nice to have’ cutting edge features.
What is a typical problem that might be uncovered?
Here is an example. Long battery life and 24/7/365 high resolution streaming video functionality in a small enclosure is mutually exclusive, so you need to shape the project around that to avoid complications later. Understanding the key purpose of the product is needed to allow trade-offs to be made. Perhaps a camera can be triggered from another, low power source and then capture short video bursts. Maybe 24/7 operation is required but there can be a rechargeable battery pack replaced regularly. There may be a source of power on site but it is intermittent and so a combination of powering strategies can be used.
In these situations using the 5 Whys approach can help get to the nub of the problem at hand. We will explore this topic in more detail at a later date. Keep in touch via our newsletter for all the latest blogs. You can sign up here.
Why should I do a feasibility study?
Here are some of the main reasons to do a feasibility study:
- It starts the whole process off on the right foot and will give you confidence
- You will go in organised, not jumping through hoops on a whim.
- You will get a smoother project – The next stage will focus on doing the engineering, not constantly solving complex problems.
- You will steadily decrease your risk as you carry out the project.
- There will be less unknowns and it lowers the chances of hidden problems.
- The project will be more focused and it will be cheaper overall (because you won’t be constantly encountering problems you need to then fix, or elements that are impossible to do).
- It promotes innovation – How are we going to solve this, approach the problem and turn the next stage into pure engineering.
- Checking the definition of the project and that it makes commercial sense
- Ensuring your end goal in its entirety is possible.
- Save time and money (even though it doesn’t feel like it at the time!)
- Having refined requirements within a clear specification will help you to develop a deeper understanding of how the product can best be implemented. innocuous changes can have a big impact on sales.
It takes a strong person to do make that feasibility commitment. But you are rewarded with major questions being answered.
What types of feasibility study are there?
There are several aspects to a feasibility study. Here we outline 6 types. An in-depth product feasibility study may look at all of these.
Commercial – Can you sell the product for a sufficient margin and will your project work within a reasonable budget?
Technical – Is it physically possible to create the product? What technical issues may be encountered along the way? Can the issues be tested in advance of full development?
Operational – Can we have the product when we need it, what are the supply chain requirements? Lead times, manufacturer stability and location may mean you end up with a design that cannot be made due to missing parts.
Uses cases – How will the product be used? Will this cause any problems. How do we onboard a client with our product – will there be training needed, will this bring additional resource requirements?
Schedule – Is there a narrow window of opportunity to launch the product? Do you have a clear phased product delivery plan to hit that window robustly?
Compliance – What are the legal requirements for the product? What sector will it be selling into and what countries? Are there established standards that can be used or is this trailblazing?
The study sections in more detail
Can you solve the problem that you are trying to solve within your available budget and desired price point?
You need to look at both the product’s unit cost and the estimate for design, prototyping and test costs. There is often a trade-off between development costs and product costs.
There is a trade–off here. If you expect to sell low product volumes while gaining market traction it could be worthwhile to minimise the initial product design costs and accept a higher unit cost by leveraging modules instead of producing discrete component designs. As volumes and confidence in the solution increase it can make sense to invest in value engineering to bring down the unit cost to increase margins and stave off copy-cat competitors.
Alternatively, if unit costs need to be kept down from the start look at spending more money on value engineering upfront. This could be because you plan to produce at high volume so a 10p difference in product unit costs will add up to significant amounts. Or your product may be very price sensitive, for example if market research shows customers will only buy the product at £50 then keeping unit costs low will provide you with more profits to invest back into R&D or your businesses sustainability.
Also consider any add on or subscription costs. For example IoT products often rely on a cloud service. There may be a data transaction cost associated with the full product lifespan. This needs to be built into the cost consideration and the wider business model.
Tip: Be realistic about your status in the industry
If you are a start up the chances are you won’t have the purchasing power yet to persuade large manufacturers to prioritise your project and provide high quality support.
This looks at whether your project is physically possible. A common starting point is to examine the product overview requirements and identify areas of risk and uncertainty. This provides a focus for the feasibility and ensures that the right areas are examined. There are a wide variety of techniques and approaches including paper-based calculations; spreadsheet modelling; simulations; build, test and measure and more that can be deployed here. A combination of approaches are often used to quickly establish the most appropriate course of action. Hand calculations can be used to verify that the order of magnitude is correct or to flag that the approach attempts to defy the sometimes-inconvenient laws of Physics. If these show promising results, then a prototype or development kit can be used to for further confirmation. If not, then other approaches and trade-offs can be investigated before anything is built and measured.
The technical and commercial elements often go hand in hand. Sometimes the technical limitations are not due to physical constraints but are due to needing to use new, innovative technology. For example, if your product relies on silicon which is not yet released you may not be able to access it because samples and manufacturers design-in support may be scarce. At first release of innovative technology manufacturers often limit the design support and distribution to large businesses and then gradually widen the access once some products are in the field. This means that while the technology exists SMEs and start-ups may not be able to use it for some months post launch. In addition, components in the electronics industry are regularly subject to long lead times for production quantities. This has been exacerbated by the pandemic. Identify whether the components you need will to be available to meet your manufacturing plans and take action to secure them in advance.
Unless the devices you need for your new product are actively available for purchase you cannot suddenly speed up global supply to suit your deadline.
What to do next after a technical feasibility study?
A common next step is to look at a Proof Of Concept (PoC) demonstrator with the devices you are going to use. These can be used to gain confidence, finalise the definition of design and attract investors and partners. You may struggle if your project relies on influencing multi-billion pound corporations into doing things your way. You will most likely have to accept you need to work your way up to get their attention and reach a priority status in their eyes.
The Proof of Concept demonstrator can be in the form of early prototype (A model) electronics hardware and firmware, or it can take an MVP approach and leverage development kits wired together on a piece of wood to prove the main functionality.
This type of feasibility study looks at:
- Supply chain lead times
- MOQs (minimum order quantities)
- Getting hold of the right parts at the right time
- Are there reliable quality sources?
- Who is going to be making it? Do they have the right experience to create these kinds of products at your expected volume?
- Does the manufacturer have the right processes in place for quality testing – Consider that just because a product works fine by itself doesn’t guarantee it will perform in the same way when manufactured automatically in a factory and in higher quantities.
- What considerations are needed for it to be maintained in the field?
This looks at the end product through the user’s point of view. (Who are the user(s) and what are their roles) How will the product be used in the real world? It is possible your idea might not be feasible because of the type of end user you are planning to market to. For example, your product may rely on something perceived as simple such as connecting to Wi-Fi. However, if your IoT product is aimed at the elderly care market there is a technical and information gap here. The age demographic will have less experience connecting devices and this may be a step too far.
Schedule feasibility looks at whether the product can be developed and made available in the required timeframes and what additional risks could occur where timing is compressed and decisions affecting dependencies must be made without the full knowledge needed. It is worth keeping in mind that in most cases the first prototype made is not suitable for high volume production. There will be updates, adjustments and changes needed through the development process.
Schedule feasibility asks questions like:
- What does the overall project plan (design, prototype, tooling, sampling, bring-up, test, verification, NPI and more) look like for this product?
- Do parts of the plan need to be developed concurrently to hit a specific end date? Does the concurrent nature bring additional risks to the project?
- Does the plan leave appropriate buffers to address issues that although unforeseen will crop up or does it rely on an unrealistic assumption that everything works first time and there are no challenges along the way?
The approaches for product elements that cannot easily be changed in the field will be different to those that can be updated later. In other words, software can often be treated differently to enclosures or hardware. If the right quality processes are in place, it is possible for firmware and software to be changed right up until the point of manufacture. Software doesn’t have the same dependencies on tooling or production lead times. Inconveniently printed circuit boards, component supply chains and tooling cannot be changed quickly, and you can rarely just patch the PCB out in the field.
There are legal elements that need to be considered for safety and security. These will depend upon.
- The countries you are selling into – For example UKCA in the UK or EU regulations
- Sector based regulations – For example construction or medical
- Communication based considerations – For example devices which use radio communications need to consider RE–D
This allows the relevant standards to be identified and the routes to compliance confirmed which are typically to self-certify or to use a notified body. The use of a notified body depends on the availability of relevant standards and the permitted method of meeting them. Products for life safety or which could have significant consequences for failure often need third party testing, known as third party attestation. As compliance brings costs and takes times to complete it needs to be built into the project plan. It will influence where you plan to sell, for example you may decide to target one country.
Getting product compliance sorted correctly is important. Getting it wrong or missing it altogether can affect the ability to export, bring legal issues, damage reputations, or require product recalls.
Who should conduct a feasibility study?
In 3 words: The Right People
Should you do your own feasibility study or should you use a design partner?
Option 1: If you have the technical expertise to do the feasibility side then you may want to consider doing the study yourself or internally with your own team, but full project experience is just as important as your technical know-how.
Ask yourself. “Have I completed a full project similar to this in the past?”
If the answer to the question above is yes then chances are you will have a good handle on what might go wrong and what things to consider. If you have a good process for flushing out what needs doing, there may be no need for a full study.
If your project is going down a completely new path, you are trying out a new project or you are planning to launch the first product in your portfolio then it is worth looking a design partner. They will provide you with far more in-depth analysis than you could achieve yourself and ultimately provide you with a completed picture.
Make sure it’s a team approach
You’ll want to clearly communicate the problem the product solves to your different departments or at least your immediate team. You may want to consider involving sales and marketing at an early stage. Failure to factor in advertising costs could mean your great product never gets the traction and buzz it needs to get off the ground, especially if there is no budget left to be spent on generating brand awareness.
How to get the most out of your feasibility study
- Make sure it is tailored to the situation. Is it a product that is similar to another one in the portfolio (or on the market), or a combination of two existing products? In may be that only a simple study is needed, which could only take 1-2 days of engineering time.
- If you are pushing boundaries, combining features in a unique way, or using cutting–edge devices then you will need an in-depth plan that looks at more potential unknowns.
- Know what questions you are trying to answer – You want to make sure the feasibility study addresses what you need to know and that your design partner, if you use one, is also aware of these.
- Be collaborative – coming together from both the engineering and commercial side to solve a problem.
- Prepare to be flexible – There may be solutions if a hidden unknown throws a spanner in the works. You may need to approach the problem from a different angle than you expected.
How do you prepare for a feasibility study?
Have a clear understanding of the problem you are trying to solve and an open mind about how you might solve it.
Your planned route may not be commercially viable and there may be size, power, weight, thermal, or other performance constraints. Come to the table willing to share what knowledge you have but be prepared for your planned process to be honed, refined and tweaked. It may be achieved in a parallel way to the original plan.
Be clear on the non-negotiables and the nice-to-haves. Perhaps pick 3 essentials.
There will be elements of the project you can’t change. For example the bits that make the product truly unique or an element that may wreck your price point entirely. But there will be areas that aren’t so important.
You may have heard of a great new technology you want to integrate into your product. But if this would only lead to a 5% increase in sales but at 25% to the total costs of the project this may not be the best route. It may also wipe out over 5% in lost sales from your main customer base by sacrificing their ideal price point.
What to avoid in a feasibility study
- Blindly doing areas of study with no purpose – Just doing bits for the sake of it.
- Using an unstructured, unguided approach – This will lead to a free for all and won’t be productive or focused.
- Save the fun till later – Many engineers would love to delve into the nitty gritty of a project, ‘wouldn’t it be fun to look at this.’ But do you really want them to do days of work on an incredibly niche problem that is unlikely to come up at all? Make sure you agree the boundaries of the project or at least discuss the purpose of the feasibility study.
- Turning it into an open–ended research task – This is a road to nowhere and will just slow down the process you were trying to streamline in the first place!
- Start an online search black hole – Google, and other search engines, are full of advice, ideas and knowledge. But obsessively researching everything online isn’t going to help when its overdone. It’s better to work with a few professionals, from a design consultancy or your own team who understand the relevant problems that could hinder the project.
- A feasibility study is not the same as product development. Muddling feasibility with the development stage just makes things convoluted. A feasibility study should be signed off. It’s not something to dip in and out of and add to throughout the project. Feasibility is the route to implementation and although there may be a small crossover they are unique entities.
What are the outer limits of a feasibility study?
Make sure it is a defined phase in the process and you get it signed off and don’t start development during it. Look at specification, major devices, outline product cost, where there are risks, how the product may fail, and go into that project with a firm starting point. Don’t let the feasibility side just leak on and on during development. Don’t keep coming back to it. A feasibility study should be a distinct thing with deliverables to answer questions and remove uncertainty. And keep prototyping separate as well.
In summary: It’s a fine balance between doing not enough and too much when it comes to feasibility studies, but if you work with the right team that balance becomes easier.
Extra hidden benefits from doing a feasibility study
- Getting it right, from the start.
- You have taken the time to really understand what you are trying to do.
- Full visibility of almost all possible barriers.
- Prevents the temptation to dive straight in and get stuck later.
- Stops you creating a prototype and having no idea what to do next.
- It makes the project more real. Instead of it being the latest greatest idea with a fictional end date it’s a real tangible start to the process.
What are the risks if I don’t do a feasibility study?
- No checks now = Nasty surprises later – Hidden costly problems that you haven’t spotted can wreak havoc on your budget and deadlines.
- More chance of critical failure – In some cases the missing pieces can be so catastrophic it wrecks the whole project. A bit like finding out there is a problem with a house the day before exchanging but far far worse. In other words you could spend your entire budget on a project that is doomed from the very start. In the worst case scenario you may have to start all over again. And if you have spent your budget, your team have lost faith in you, or a competitor just stole your first mover slot, you may not get that second chance.
- Your project will use a whole number of assumptions – Do you want to be blissfully ignorant of problems or blissfully aware that you have the power to fix them?
- Doomed Deadlines – You may commit to hard deadlines which don’t allow for potential set–backs. These can happen in any project but feasibility studies take a lot of the guesswork out.
- Welcome to risk – Going in blind means there is a lot of risk involved. For start-ups, in particular, these risks can cause big problems. For engineering teams, risks mean uncertainty or losing credibility.
- Grow wings as you go – Whilst this sounds nice and might be fine you will end up doing a LOT more work without it all stacking up from the start with a clear plan. In the best case accept you may need to compromise if you are boxed into a corner over deadlines. Being governed by the deadlines may mean you end up with an inferior product to share with the world.
It all comes down to. How lucky do you feel?
When in the product development process should I do a feasibility study?
As early as possible.
Before committing to any level of hardware or software development on a product you should consider a feasibility study, even if this is just on a basic level.
Get ahead of the plan and start off on the right foot.
What to read next?
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Crave another deep dive blog? – Try our design reviews article