Prioritization of Product Features


I have been thinking of doing a post on the topic of prioritizing product features for quite sometime as most product managers do this activity regularly. Product Managers in many companies do the prioritization exercise differently, but I’ve attempted an approach which I believe is comprehensive.

Here’s an approach I’ve followed in my experience — I call it the “Business Value Model”. The prioritization activity involves assigning “weights” (in the form of unit-less points) for each feature in the backlog against a variety of parameters such as the following:

  1. Value: the value of the feature will be a function of Benefits and the associated Effort Estimate.
    • Value = f (benefit, effort estimate)
    • Benefits: assign a number (from 1-10) for each of the benefits the feature provides. The benefits must be from customer requests.
    • Effort Estimate: assign a number (from 1-10) depending on the effort estimate from a look-up table. Something like 1 for 3 days, 2 for a week’s effort, 3 for 2 weeks effort, and so on.
  2. Benefiting Customer Size: a number (from 1-10) depending on what percentage of existing customers would benefit from the feature.
  3. Benefiting Market Size: a number (from 1-10) depending on what percentage of prospects in the open market (i.e. potential customers in the pipeline, general market, etc.) would benefit from the feature.
  4. Competitive Necessity: have just a handful of numbers to choose from depending on what the feature will do to the product with respect to the competition. For example:  2 for closer-to-competition, 5 for competitive-parity, 10 for beats-competition.
  5. Strategic Requirement: assign a number (from 1-10) depending on the alignment of the feature with business strategy, product vision, etc.

The framework is available for download here: PrioritizationTemplate

Remember: Every new feature will need to be looked upon from the angle of tapping new markets. Here’s an excerpt from one of my earlier posts, related to Win-Loss Analysis: Some customers might have unique needs which we might not even be aware already. In such a case, it is essential to profile the customer and research the need in the market place — may be we will end up discovering completely new market segments which we can go after once we have built the required product capabilities.

Would love to hear your thoughts!!!

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About Mohamed-Aneez
Passionate about Product Management

13 Responses to Prioritization of Product Features

  1. Prasad says:

    Interesting & quite detailed, especially the approach to assigning weights. Thanks. I would suggest that the “Benefiting Market Size” & “Competitive Necessity” be merged into a single field called “Sales Impact” – a high value indicates the feature is a deal-maker

  2. François says:

    Interesting and as Prasad commented quite detaild.
    I am using only 2 parameters :
    – evidence (scale 1 – 3), this indicates the amount of requests from the market
    – impact (scale 1 – 5), this is about benefits and deal-makers, like Prasad mentioned

    Just multiply evidence with impact and you have a priority

  3. Marilyn Maguire says:

    Mohamed

    This is an interesting structured approach that gives a solution to a SWOT analysis for a product. Your categories provide a method of assigning value that answer the items brought up in SWOT analysis, and provide a means of communicating effectively to developers and marketing what priorities will be addressed.

    The only requirements that are not effectively addressed in this (unless you include them under Strategy) are technology changes. Including development that is driven by changes in technology needs a clearly understood process (early adopter, fast follower, late entrant, etc) to incorporate those changes any product needs to accommodate.

    I am impressed with the format. Thanks for sharing

  4. lukassen says:

    Sometimes there is less value in having a feature, than in not having the feature. Not sure this can be accommodated in this model

    • Brian J. says:

      That is accommodated by how you rate the strategic and competitive necessity. I think you’re saying that some features should essentially have a negative score, but that’s not needed in this model. Once you have a good backlog of features, the less beneficial features will all shake to the bottom of the pile, never to be worked on.

      But it’s good to keep them in the backlog because obviously the ratings may change if the market changes.

    • Mohamed Aneez says:

      I agree with Brian J on this one. If there is any feature with less value, it would be at the bottom of the list. The ones at the top get knocked off consistently.

  5. This can be an effective tool, one I’ve used often. It certainly can help prioritize not only product features, but new initiatives. My only caution is that if a team is involved in assigning the values (e.g. product, sales, marketing, techology), product leaders must be ready to challenge the objectivity of the number assigned, and be ready to back it up with market facts. Product leaders must continue to be the market experts in their field.

  6. Anonymous says:

    This is good start Mr. Mohamed Aneez. We recommend you also think about technical feasibility and urgency factor while prioritizing.

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    Please check out how ProductOffice, our affordable Product Management @http://www.productoffice.com can help. Using ProductOffice companies can manage product ecosystem, consisting of various product stakeholders, assess R&D opportunities, manage product strategy, and innovate continuously to stay ahead of the competition.

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  7. John H says:

    I use something conceptually similar to this template myself – it’s always reassuring when you see someone else independently arriving at a similar method!

    My one suggestion: I’d be sure to somehow link in the source of the feature request, ie the customers or prospects who raised the feature (either directly or via sales/support/resellers) against each feature request. Being able to align your weighted scores against the number of customers or number of instances where a feature has been requested (coupled with the demographics of the customer/prospect) is very useful, both for marketing planning and also accountability to those representing the customers from a quality management perspective. You’re probably tracking this in your CRM, so it might be as simple as just getting data from that into a separate table that this sheet can reference summary information from.

    @lukassen: I guess you could accommodate this with the use of negative values, or working on a logic that 5 or below on a scale of 1 to 10 indicates doing this feature would actually be worse than doing nothing.

  8. Brian J. says:

    Mohamed,

    Simple. I like it. Have you considered adding weightings to C, D, E, F and G?
    E.g., H = (Wc * C) + (Wd * D)+ (We * E)+ (Wf * F)+ (Wg * G)

    Then you could adjust your value factor weightings based on, say, the stage of the product, the market and competition, or your company’s goals.

  9. Mohamed Aneez says:

    Thanks Brian. That’s great feedback. Let me think through it.

  10. Pingback: Feature Prioritization *New* | Passionate Product Management by Mohamed-Aneez

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