Deliver These Eight for an Exceptional Product Requirements Document

What does highly useful PRD look like?  It will be…

1 – Verifiable. The requirements are measurable, not subjective. You can test their validity.

2 – Clear and Concise. No rambling. No cleverness, just a clear and easily understood explanation that can only be interpreted one way.

3 – Complete. The document does not require the reader to fill in gaps. All the information is there in black and white. It covers the entire scope of the product or enhancement.

4 – Consistent. Requirements are aligned. They do not conflict. You do not duplicate requirements. You define terms and maintain a consistent use of those terms throughout.

5 – Traceable. Every requirement can be traced back to a market need it is fulfilling. The document is organized with a numbering or annotation system covering individual requirements. There is a hierarchical structure that breaks requirements into smaller units while also allowing them to be traced back to the higher requirement.  The PRD must track versions so that changes in requirements can be followed.

6 – Viable. Can the requirements actually be met? Are they feasible? The PRD must lay out a plan that can be delivered with existing technology, skills, and capabilities. It must adhere to a set schedule and budget.

7 – Necessary. If the product requirements were removed, there would be a noticeable deficiency in the system. Delivery on this item can lead to prioritization discussions.

8 – Free of Implementation. The requirements should define “what” not “how”. The how the requirements will be implemented should fall to the designers. The one exception to this is when the market insists that the product meet set standards.

When you’ve developed a PRD that can successfully deliver on these eight items, you can be confident your team will have what it needs to move forward.

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In this week’s post, I’m going to discuss the nuts and bolts of the PRD (Product Requirements Document). Next week I’ll complete this discussion by covering some of the specifics that will be part of a good PRD.

What is a Product Requirements Document?

A PRD is a document that serves the development team. It provides details about features, functionality, and capabilities required to build the product. Obviously, if the product is a new one, the level of detail will be much greater than what’s needed for an enhancement to an existing product.

A well-crafted PRD clearly defines both the breadth and depth of the product. Done right, the PRD will move the development team beyond considering what to build to how to build. Supporting groups (packaging, creators of user manuals etc.) should understand what needs to be delivered with the product. All should understand what the customer experience should be when using the new capabilities. Finally, product requirements must be aligned with your company’s business objectives.

Four Questions Your PRD Should Answer

1. Who will use the product?

In answering this question, you should address the need the product will meet. Also cover the characteristics of the end user and how end users will actually use the product.

      2.   What will the end users do with the product?

This question covers the functional requirements the product must meet. This could be something simple like buttons to press or as complicated as a computer display. In some cases, you may need to provide a process flow for the various activities an end user will need to perform. Flow diagrams, data diagrams, sets of use cases, or content, and entity relationship diagrams can also be part of the functional requirements explanation.

      3.   What are the product’s performance requirements and design constraints?

Often called the non-functional requirements, these items define how well or how much the product needs to perform against measureable criteria. Product constraints can take many forms. They are often industry-specific. Typical considerations are environmental legal, physical, support of other products, etc.

      4.     What must accompany or support the product?

Support items are not related to the specific operation of the product. However, they are vital to supporting a smooth end-to-end user experience. Supports include such items as documentation, accessories, shipping, packaging, installation, replacement parts, and maintenance. The answer to this question can extend to cover how customer service will handle calls about the product.

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What Does an MRD Look Like?

Your MRD can take many forms. It can be a simple document, a wiki, a spreadsheet, a unique software tool, or something else you devise to fulfill this important step in your process. The potential of the project will dictate the form your MRD should take.

The Core of the Market Requirements Document

There are essentially two things at the core of your MRD:

1 – A clear definition of your target market. This is basically a vivid picture of your potential buyer and user profiles. What are the key reasons someone would use the product?

2 – Defined problem scenarios – What are the main challenges your users face that will cause them to turn to your product. These likely will vary between buyers and end users. You’ll want to develop problem scenarios for each.

Functional and Non-Functional Requirements

Requirements that must be dealt with in the Market Requirements Document fall into two categories: function and non-functional. Here’s the difference.

Functional requirements cover capabilities that have interactivity with the user. They deal with specific high-level functions a user may want to perform.

Non-functional requirements are concerned with design restrictions and performance factors involved with the product. Performance factors cover how well a product must perform. Design restrictions revolve around how much a product must support.

Common Non-Functional Requirement Categories

There are many different categories of non-functional requirements including many that are industry specific. Here are some of the most common categories:

• Physical requirement – Maximum and minimum dimensions, weight, packaging, sturdiness, etc.
• Environmental requirements – the environment in which a product must be operated or stored.
• Performance requirements – This category can include such things as expected speed for specific operations, what are the lifetime expectations for use, etc.
• International requirements – where the product will be sold and used. What are the language, currency, power supply, and specific localized needs?
• Compatibility Requirements – How does the product need to work with other products?
• Documentation requirements – What are the types, formats, and delivery methods for documentation?
• Support requirements – What must be available to customers to help them with installation, repairs, operation, payments, maintenance, and disposal of the product?
• Legal, Regulatory, and Compliance requirements – What laws, rules, and government or agency-related requirements impact the product?
• Distribution and Packaging – What is required to distribute the product and how does it need to be packaged?

What to Include in a Successful MRD

There are essentially six key elements of a successful MRD.

1. As mentioned above: You must include a definition of your target market, a vivid picture of your potential buyer and user profiles.
2. A comprehensive list of market requirements the solution will need to fulfill.
3. Suggested quantitative measures of success for each requirement.
4. A prioritized list of requirements from your market’s point of view.
5. A clear focus on the market problem you are trying to solve, not on your planned solution.
6. A timeframe for product introduction and a supporting rationale.

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Recently we’ve discussed the SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. Today, we’re going to consider a tool that drills down to the product feature level and allows the product team to compare competitors’ products to your solution. This tool is the Competitive Analysis Matrix. A Competitive Analysis Matrix is usually presented in a spreadsheet format. However, many such charts include 8 or more features. Complex products can include twice that many feature comparisons.

How the Competitive Analysis Matrix Works

The purpose of the Competitive Analysis Matrix is to identify gaps in your competitors’ offerings. Your matrix should include a row for each feature to be considered. It should also include a column for each competitor with qualitative rankings of each feature in the competitors’ products. This means a ‘Yes’ or ‘No’ ranking won’t cut it. Your team needs to become as familiar with the competitive products as possible so you’ll feel comfortable evaluating each.

Market Importance

The market importance column is particularly significant. It is likely that your competitors have added some features to their products to meet the needs of a particularly important customer. These will not necessarily have overall appeal in the marketplace. By assigning a high, medium, or low ranking to each feature, you will be able to identify those features which you can probably cut from your product. This can help you save valuable resources and money. Every feature adds cost. The Competitive Analysis Matrix will help you hone in on the features that are most important. Once these are covered in your budget, you can start adding on other items that will appeal to the market as resources permit. Features should be added according to their ability to help your customers meet their goals.

Four Things a Basic Competitive Analysis Matrix Will Include:

1 – High-level Feature Sets – Group the features that are related together to simplify the matrix. It is easy for your team to get bogged down if huge individual features are considered separately.

2 – End-to-End Customer View – Don’t get off track by including just characteristics of the physical product. Include attributes that impact the entire user experience. This can cover such things as how the product is purchase, delivered, installed, supported, and maintained. By evaluating these items you may open avenues for product differentiation.

3 – Measure How Well Features Perform – Don’t allow yes or no answers. Remember this is a qualitative comparison.

4 – Measure of the Market’s Importance – Most likely your competitors have included features that are not highly valued by most customers. There is no need to match competitors feature for feature. Build the product the market wants no matter what you see competitors doing.

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Before we drill down into Storyboarding and Flow Diagrams, let’s take a moment to think about the purpose of the problem scenario.

Purpose of the Problem Scenario in Product Concept Investigation

All problem scenarios must illustrate challenges faced by users while attempting to reach a specific goal. This includes exposing the limitations of current solutions in the marketplace.

An effective problem scenario promotes:

• Clear understanding of the situation a user faces in trying to reach a goal
• An accurate definition of the goal the user is seeking to achieve
• A strong understanding of how consumers are currently reaching this goal
• The frustrations felt by customers using current solutions
• A revelation of the opportunity you have to flush out new ideas to reduce or eliminate frustrations with current solutions
• A wide open path for the presentation of bold, fresh ideas that could dramatically improve the customer’s experience

Storyboarding as a Method of Product Concept Investigation

One of the great strengths of Storyboarding is its ability to make an idea instantly understandable to your team. In contrast, the simple story method of product concept investigation requires the audience to read through the whole written description. Only when the reading is complete will the team understand where you are going and what you are suggesting.

Storyboarding combines illustrations (ala comic books or cartoons) with individual written steps to deliver your concept. Your audience can quickly grasp where you are taking them with the storyboarding methodology. The one danger is that you can over simplify your ideas and therefore leave out critical details that would be clear in a fully written out concept (simple story).

Now, let’s consider another approach to the Problem Scenario, Flow Diagramming.

Flow Diagramming

If collaboration between individuals or departments is vital, the Flow Diagram is an excellent tool for sharing your ideas.

The Flow Diagram essentially shows how a solution would flow through your company’s various departments on its way to completion. Each handoff point and step will be clearly shown on the diagram so everyone can see exactly where their department fits into the overall sequence.

Looking Forward

Next week we’ll move away from the Problem Scenario approach to product concept investigation. We will take a close look at the Competitive Analysis Matrix and its uses, advantages, and disadvantages in the product development process.

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Problem scenarios are a good way to take a high level look at what an ordinary customer might encounter, the problems they need to solve, and the challenges they face in doing so.

A mother may need to provide a nutritious but easy to prepare meal for her busy family.  They need a quick meal, but not just any fast-food pickup. It needs to be healthy, quick to prepare within tight time constraints, and tasty.

Problem Scenarios – Different Types

A problem scenario can take different forms depending on the product concept under consideration and the level of detail you want captured in the scenario.

The first type of problem scenario is the Simple Story. This can include a few paragraphs or a few key bullets. Key elements to include in a Simple Story are:

• Who is the primary persona in the scenario? Usually there is one, but sometimes there can be several, depending on the product.
• What are the location and timeframe for the scenario? Does it occur at home, in the office, or somewhere else?
• What is the goal of the persona? What is the high-level objective the persona is trying to achieve. For example: Provide a quick to prepare, tasty, and healthy meal, hear music on a patio, etc.
• What are the common steps taken to achieve the goal? What are the most basic tasks a person will need to undertake to reach the goal? These should illustrate the challenges and frustrations the persona encounters in the quest. These also should encompass how the persona would proceed using current solutions and products available in the market. The result of this step will be a complete start-to-finish set of activities. It will give a bird’s eye view of the situation.
• What major decisions must the persona make during the workflow? If the product is complex, such as software or services, there may be several paths that can be taken depending on decisions made. For example, let’s consider a product team attempting to create an online order form. Decisions the persona would need to make might include which credit card to use, do they want gift wrap, where will the item be sent, how much does the persona need to purchase in order to get free shipping, and that’s just the start of the possible decisions.

Looking Ahead

Next week we’ll take a look at another type of problem scenario you can use in your product concept investigation: Story Boarding.

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Choosing the Best Product Ideas and Features to Advance

Today, we’re going to look at a tool many organizations find useful in helping them determine how to proceed. This tool, the Prioritization Matrix helps product teams score the various product concept ideas under consideration so they can make well-reasoned decisions.

When myriad product ideas are floating around, this systematic matrix approach will help ideas with the most potential rise to the top so they can receive further study.

You can use this same Matrix approach to consider various features you may want to add to a product. The Prioritization Matrix pulls the cream of the ideas to the top and lets the sludge sink to the bottom and ultimately disappear.

Choosing Matrix Criteria

Your Prioritization Matrix can include any criteria that align with your organization’s goals and objectives. Some commonly used criteria are:

• Is the market attractive?
• Can you be competitive?
• Is it a good time to enter the market?
• What’s the market’s potential value?
• Can you differentiate your product from others out there?
• Is there a strong projected return on investment within a set period?
• Does the proposed product align with your company’s goals and objectives?
• How does the estimated cost of development compare to the size of the
  opportunity?

Here’s a virtual example of what a Prioritization Matrix might look like:

Using the scoring scale, each of the criteria earns a score of 1,2,or 3. For clarity and to avoid individual subjectivity, it’s smart to specifically define each measure. For example for Market Attractiveness high would equal market growth of greater than 5% along with a market size of over 2M potential customers. Once you’ve defined your ranking scale numbers, your team should rate each criteria and total up the scores for each idea under consideration.

Naturally, at this point the scoring will be fairly subjective. That’s ok because you are not at the point of constructing a financial forecast. You are simply considering which ideas are the most deserving of additional consideration.

Building in Automatic Stops

You need to build some automatic stops into your Matrix. For instance, if an idea does not strategically align with your company’s strategy or objectives, it must be dropped from further consideration. Additionally, at the outset you should agree that products that do not garner a predetermined minimum total points will be discarded.

The systematic Prioritization Matrix approach is an excellent way to increase effective use of your resources. Don’t become discouraged if a majority of ideas don’t measure up on the Matrix. This is a common occurrence that can often lead to a positive: your valuable resources not being wasted on lackluster ideas.

Looking Forward

Next week will take a look closer look at Product Concept Investigations, beginning with Personas.

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SWOT is a way for you to assess the current situation of your company, a product, or even a competitor. Armed with this analysis, you will be able to formulate a strategy for moving forward.

Through the use of SWOT, you can gain a full view of what you face internally and externally, including both positives and negatives of your situation. Let’s take a closer look.

SWOT Matrix

A SWOT matrix is a four by four illustration. The top row lists strengths and weaknesses of the product or organization under consideration. These listings are based on your current view. The listings under the bold headings are common areas to consider when assessing the internal view.  These include things such as:

• Product Capabilities
• Company Competencies
• Market Position
• Key Resources
• Strong Processes or Quality
• Key Partnerships

Opportunities and Threats

The lower half of the SWOT Matrix is concerned with Opportunities and Threats. These concern elements external to your company. They cover trends or events that may impact your company’s situation later on.

Opportunities refer to factors that may positively affect your product or company. Threats are those forces that may negatively impact the situation. The analysis focuses on a fluid situation that can be impacted by:

• Movement in the Market
• Competition
• Technology
• Processes
• Resources
• Your partners

A Key Factor

As you are considering your SWOT matrix, remember that the upper tier (Strengths and Weaknesses) concerns your product and company in a competitive landscape. The lower tier, Opportunities and Threats, deals with trends and situations in markets outside your company.

Here’s an example:

If you may not get the parts you need to build the product, that is a weakness, not a threat. If your market is becoming more tech-saavy, that’s an opportunity.

The SWOT Matrix won’t tell your team what to do. It will prepare you to take the next step, which is to consider your options strategically. You’ll explore how to seize opportunities and reduce threats. All the while, you’ll have a clear idea of your company’s or product’s strengths and weaknesses so you can factor them into your strategic decisions.

Looking Ahead

Now that we’ve looked at the SWOT Matrix, my next post will present the TOWS Matrix, which is SWOT spelled backwards. A look at your situation from this view presents new insights that can be valuable to your team.

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Managing the Product Portfolio

Your product portfolio links your specific product strategy to the overall company strategy. Within the product portfolio you should find the complete suite of products, including those that currently exist and those that are planned for the future. By actively managing the product portfolio, you help ensure that your company meets its goals.

The product portfolio management process links your company’s high-level resource/budget allocation to the strategic initiatives or the product roadmap(s). The process of managing the product portfolio is also linked to what is a more tactical project portfolio management regimen. This discipline manages the approval and tracking of specific projects tagged as being supportive of the overall product portfolio initiatives.

Analyzing the Product Suite

Successful product leaders know not only where to invest, but just as important, where not to put their resources.

Boston Consulting Group (BCG) devised a simple way to communicate how to handle market analysis. It revolves around a dog, a cow, a star, and a question mark.

BCG’s Growth-Share Matrix

Using this approach, market growth rate is shown on the vertical axis and relative market share on the horizontal. Products that fall in the lower right box are those with low growth potential and low market share in your company. In other words, these are the dogs. Anything that falls in this quadrant is definitely on its way out. By pulling investment from the dogs, you free up resources to use in more productive quadrants.

The upper right quadrant displays a question mark. This represents products that usually will require your company to invest in order to improve your share of the market. However, since the prospect for market growth is high, the products represented here have high potential for the future.

Now let’s move to the upper left quadrant where you find the star products. These are the products where your company has a high share of the market and there is high potential for growth.

Finally, in the lower left quadrant are the cows – the CASH Cows. These are successful mature products. Your company has a high share of the market, but growth potential is pretty low. These are the products that produce profit you can invest in your stars and question marks hopefully to turn them into stars.

Looking at the Matrix Over Time

As time passes, things change. You will see your cash cows gradually morph into dogs as new and better products come into the market. You’ll also see today’s question marks evolve into tomorrow’s stars as the current stars replace the cash cows or rotate out of the 2-by-2 matrix entirely.

This visual clearly shows the importance of keeping a pipeline full of emerging products you can grow into robust winners for your company.

Next Week

Through my next post we’ll take a look at other product management tools starting with the GE-McKinsey Matrix, another tool that can be very helpful in your product portfolio management.

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This post discusses the sixth and final key finding gathered from the analysis of the latest Global Study of Product Team Performance.

#6 Key Performance Indicator

Product Teams that Believe Their Effectiveness Would Be Improved by the Use of Product Tools and Automation Are Likely to Be High Performance Teams in Companies that Achieve Their Financial Goals and Objectives.

Just over 50% of our survey respondents are members of technology development teams. For this reason, this finding is particularly meaningful to technology development organizations.

Desire to Improve Tools and Increase Automation

The sixth indicator of high performance is essentially possessing the desire for improved tools and increased automation. Organizations that have implemented effective team processes often seek out ways to further improve efficiency.

This indicator points to the rapid uptake of DevOps and the Extreme Programming (XP) practices that underpin it.

This particularly points to:

• Test automation of every kind starting from the practice of test driven development
• Refactoring (and tools that automate refactoring)
  • Continuous integration, continuous delivery, and continuous deployment (and
  the automated build tools and application release tools that support these
  practices)

The up swell of enthusiasm for test-and-build automation has driven strong tool development and rapid tool advancement. This includes having check-ins kick off build scripts that not only compile binaries, but also generate documentation, tests, and statistics. They also kick off test automation, plus generate and deploy distribution media, website pages, and program logic to servers.

In addition, on the operations side, tooling like continuous configuration automation enables automated rollout of both physical and virtual infrastructure. The result is that teams with effective team processes find themselves continuously looking with longing for the latest – and the latest is rapidly evolving.

Next Post: Wrapping It All Up

For several weeks now we have delved into the responses and analysis of the latest Global Study of Product Team Performance. Next week, we reach the conclusion when I will share a few final thoughts on this interesting survey and its outcomes.

Recap of the Six Key Performance Indicators:

1. High performing teams have a clear definition of “done”.
2. Respondents unable to associate a product development methodology with product profitability are unlikely to be on a high performing team.
3. Respondents who believe using Agile/Scrum leads to high product profitability tend to be in organizations that meet or exceed their financial goals.
4. Teams that consider development cost as a criterion for requirements prioritization are more likely to under-perform (i.e., negatively correlated).
5. There is a strong correlation between an effectively prioritized backlog and high product team performance
6. Product teams that believe their effectiveness would be improved by the use of product tools and automation are likely to be high performance teams in companies that achieve their financial goals and objectives.

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