Product management prioritization is an essential skill for product managers. Without prioritizing initiatives and functional requests, your backlog would expand forever and you’d be forced to delay releases and disappoint customers.
This article provides a list of prioritization frameworks categorized by the different types of prioritization criteria: business value, ROI, effort/costs, market risk, competition risk, functional benefit/feature importance, timing/business window.
By using prioritization frameworks consistently on all initiatives, you’ll have complete visibility into product development so you can easily justify tradeoffs when necessary. You’ll also have more time to dedicate to high-impact opportunities that yield the biggest return on investment (ROI).
History of different prioritization frameworks for product managers
A prioritization framework is a prioritization method that product managers use to help determine which initiatives should be worked on, in what order. Prioritization frameworks are helpful for prioritizing initiatives and functional requests without increasing the backlog.
The most common prioritization framework is the business value prioritization framework. This prioritization framework ranks initiatives by their business value, which is determined by factors such as the potential impact on revenue and customer satisfaction. Other prioritization frameworks for product managers include:
- MoSCoW prioritization method (Must have, Should have, Could have, Would like)
- Risk/impact prioritization method
- ROI prioritization method
- Benefit/feature prioritization method
- The forced ranking prioritization method
- Priority matrix
- Portfolio prioritization framework with Pareto analysis
We’ll delve more into these different frameworks below. But first, let’s look at some of the more common variables in most of these different prioritization frameworks.
Most common prioritization framework variables
The following priority frameworks are listed in order from the easiest to implement and least time-intensive to the most complex prioritization frameworks.
1) Business Value (aka impact, desirability): Projects prioritized by business value can be viewed as those that will deliver the highest revenue or market share, have a direct impact on customer success metrics, have a short implementation timeline, allow for easy implementation, and come from a reliable source.
2) ROI: Projects prioritized by return on investment (ROI) are prioritized using financial performance data such as the net present value (NPV), internal rate of return (IRR), payback period, cost/benefit analysis, discounted cash flow models, etc.
3) Effort/Costs: Projects prioritized based on effort/costs are prioritized based on the number of people that will be involved, the amount of time needed to complete, any equipment that will be required, etc.
4) Market Risk: Projects prioritized by market risk are prioritized using external factors such as customer research data, industry trends, emerging technologies, etc.
5) Competition Risk: Projects prioritized by competition risk factor in the competitive advantage or disadvantage a project might provide to your company over its competitors.
6) Functional Benefit/Feature Importance: Projects prioritized with functional benefit/feature importance focus on which initiatives have the biggest impact on your product’s usability and feature set given your current knowledge capability at any given time.
7) Timing/Business Window: Projects prioritized by timing and business window take into consideration how soon a project needs to be completed and whether or not there are any strategic initiatives that affect the prioritization of this project.
8) Data-Driven Analysis: With projects prioritized using data-driven analysis, the prioritization is based on what projects are most likely to succeed given your company’s prioritization history, success factors, ability to manage an initiative, etc.
9) Stakeholder Group Value: Stakeholders with projects prioritized using stakeholder group value will have their initiatives weighted differently depending on which stakeholder group they belong to (e.g., product management may have more weight for initiatives prioritized by-product management than marketing).
10) Multicriteria Analysis: Finally, multiple prioritization criteria can be used simultaneously to prioritize initiatives and requests. This approach works best when prioritizing multiple high-level initiatives and requests with different prioritization criteria.
Business value prioritization framework
Business value prioritization framework prioritization is easy and fast. It focuses on which initiatives will create the most business value for an organization, often prioritizing by the highest revenue growth or market share of a product.
ROI prioritization framework
The return on investment prioritization method helps determine which new product ideas should be prioritized based on the projected cost savings of implementing each new product idea. There are two types of ROI calculations: one-time costs and ongoing costs. These calculations can help prioritize features that will drive the most revenue and/or help improve your company’s bottom line (e.g., by reducing expenses).
Effort/costs prioritization framework
With the effort/costs prioritization framework prioritization, new product requests are prioritized based on the number of people who will be involved in the project, the amount of time needed to complete it, any equipment that will be required for implementation, etc.
Market risk prioritization framework
This prioritization framework prioritizes projects based on external factors such as customer research data, industry trends, emerging technologies, market conditions, etc. This approach can help your company stay ahead of its competitors and meet changing customer demand.
Competition risk prioritization framework
With this prioritization method, we weigh the competitive advantage or disadvantage a project might provide over our competitors in addition to customer and market needs and wants when prioritizing each product idea or request.
Functional benefit/feature prioritization framework
The functional benefit/feature prioritization framework method analyzes which initiatives have the biggest impact on product usability and feature set. This approach allows your company to focus on developing new product features that are most valuable to customers now, even if they do not provide any one-time benefits for the company.
Timing prioritization framework
Projects prioritized by timing or business window take into consideration how soon a project needs to be completed and whether or not there are any strategic initiatives affecting its prioritization. For example, if it is late in the fiscal year and you know that your budget will be exhausted before you can launch all of your project ideas then you might prioritize projects that would launch sooner over those with longer lead times.
Vision prioritization framework
The vision prioritization prioritization prioritization methodology is all about what will be possible in the future, regardless of customer needs or company goals today. This framework prioritization method is great for innovative product ideas that take advantage of emerging technology (e.g., cloud computing). These projects are often high risk but can also bring amazing returns if they succeed so this prioritization approach can help your company “think outside the box” and surprise competitors.
Input prioritization framework
The input-based prioritization approach requires project managers to prioritize initiatives based on how much time customers will need to spend learning about, using, and getting used to new product features or changes. This prioritized list can help your company prioritize product initiatives that will require less time and effort from customers so they can start enjoying the benefits of the changes sooner.
Project prioritization matrix
The prioritization prioritization matrix method allows project managers to compare and contrast different prioritization efforts against one another. This framework prioritization approach is effective when prioritizing complex projects with multiple objectives such as increasing revenue, improving customer satisfaction, etc. Outputs from this prioritization methodology might include a list of projects ordered by priority or criteria such as impact on brand perception or potential for growth in target markets.
Multi-dimensional prioritization
A multi-dimensional prioritization prioritizes new product ideas based on a combination of factors. For example, a multi-dimensional prioritization might be prioritizing product ideas based on customer needs, market conditions and opportunity, and timing.
MoSCoW prioritization method
(Must have, Should have, Could have, Would like)
The MoSCoW prioritization method is a simple way to prioritize your product initiatives by breaking them down into four categories (must have, should have, could have, and would like) based on their importance to customers and your company goals. This prioritization framework will help you stay ahead of competitors with innovative new products that take advantage of emerging technology while still meeting customer needs for more basic features.
MUST HAVE: These initiatives are high priority and time-sensitive. For example, the product manager might want to launch new features that will be available on competitor products soon. Customers’ current feedback or market conditions could also play into this prioritized list generated by the must-have prioritizing approach. MUST HAVES ARE NOT OPTIONAL!
SHOULD HAVE: This strategy is similar to a “nice-to-have” because it is not essential for your company to achieve its goals at this time but these initiatives could yield beneficial outcomes if executed. Those project managers who use a should have framework for prioritizing projects follow the “If you build it, they will come” prioritization approach. If prioritizing projects for a new product line or service, should-have initiatives are generally those that offer the highest potential for growth or market share.
COULD HAVE: The could have prioritization framework includes project prioritization ideas that are not essential to your company’s success but may yield positive outcomes if implemented. For example, these might be product initiatives that allow your company to learn more about customers’ interests and needs which can help with future prioritization efforts. COULD HAVES ARE OPTIONAL!
WOULD LIKE: Product prioritization ideas that fall under the would like prioritizing framework are considered nice-to-haves because they only benefit a company if implemented. WOULD LIKES ARE OPTIONAL!
Final thoughts on prioritization frameworks for product and project managers
These prioritization strategies can help your business allocate valuable resources to product prioritization initiatives with the most potential to benefit your business and customers. The prioritized list you generate will be a useful tool for understanding which prioritization ideas are more important than others as you develop future projects. Now that you understand project prioritization frameworks, try using one prioritizing approach to help organize your next project’s product prioritization efforts.
