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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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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Questions Your Product Concept Must Answer

There are 11 questions your product concept document must answer:

1. What is the market problem you are addressing?
2. How big is the opportunity?
3. Who are the potential buyers and users? Who needs this product?
4. How does the product benefit the customer? How does it benefit your organization?
5. Do we have evidence that we understand the problem and that the prospect will buy our solution?
6. What is the window of opportunity in the market?
7. Which competitors will our product face?
8. What are the main features of the product and the key success factors?
9. How is our product different from the competition?
10. How would we market our creation?
11. What metrics should be considered in determining the product’s success?

The real objective of developing a product concept is to provide enough information about the market needs to justify pursuing further investigation at a deeper level.

5 Things a Good Product Concept Includes

1. Enough research into the market to document the current situation and actual need for the product
2. An understanding of the competition in the market and why the need for your product exists
3. A conceptual solution that aligns with your company’s capabilities and objectives
4. An explanation of how the new product will be an advancement and added value over what competitors offer
5. An indication of the financial and long-term benefits your company can anticipate from the product

Looking Ahead

In my next post, we’ll take a look at the Idea Prioritization Matrix, a popular tool to use when evaluating different product concepts.

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Regression Analysis Findings

Our regression analysis shows strong correlations with high performance when organizations effectively:

• Prioritize the backlog
•  Have a clear definition of done created within the team
• Don’t over-emphasize development cost when prioritizing requirements

Impact of Respondents’ Perceptions

Respondents’ perceptions of product development methodologies also showed up in our data. Over 90% of survey respondents are actively involved in the product development process. Those who lack an understanding of the method in use clearly are part of organizations that underperform.  Additionally, those who believe using Agile/Scrum leads to high product profitability are more likely to be in organizations that perform well financially. Knowledge clearly makes a difference.

Top Tools and Automation

Lastly, the most highly productive teams believe their effectiveness would increase through the use of better tools and automation. Here, again, knowledge makes a difference. Teams that have implemented effective team processes are looking to expand their uptake of DevOps and Extreme Programming (XP) practices with the latest automated refactoring, test, build, and infrastructure-deployment tools.

Looking Ahead

As of this post, we conclude our exploration of the findings drawn from the latest Global Study of Product Team Performance. Starting next week, we’ll switch gears and begin a discussion of product management tools that can grease the wheel of success within your team and your organization.

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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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Today we will look at the fifth of six total key findings drawn from the analysis of the latest Global Study of Product Team Performance. Next week we will wrap up the full set of analytic findings gained from the latest survey.

#5 Key Performance Indicator

There is a Strong Correlation Between an Effectively Prioritized Backlog and High Product Team Performance

A substantial 43.5% of survey respondents indicate that their team prioritizes the backlog effectively. When we submitted this question to regression analysis, the correlation was clear:

Product teams that effectively prepare and prioritize their backlog of work are more likely to perform at a high level.

Conversely, 37.9% of respondents indicate that their backlog is a jumble. Our regressive analysis shows that product teams that describe their backlog in this way are negatively correlated with high performance. That is, they are unlikely to perform well.

Grooming the Backlog

The importance of effective backlog grooming cannot be overstated. Not only does an effectively groomed backlog ensure that teams are always applying themselves to work that customers will highly value, but it also serves to motivate developers.

In fact, just by working on the top backlog item developers know they will positively impact customers more than they would by doing anything else. That motivational factor cannot be overstated.

Next Post: The Sixth and Final Key Performance Indicator

In the final summary post of this series based on findings from the Global Study of Product Team Performance, we will pull the study’s takeaways together and give you the complete scope of takeaways you can use to build a stronger, more effective product team.

Recap of the First Five 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

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