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Top Key Factors that Impact Prioritization of Product Backlog

As per multiple studies done on the products, it is proven that 

  1. Only 20% of the product features are fully utilized, 
  2. 20% of the features are never used by the users
  3. 40% of the features are often used
  4. 20% of the features are rarely used

(Please refer to Standish’s Chaos Report )

If this is the truth, why should we build every feature in the backlog? Not required. We need to prioritize what is critical for the business. This is where prioritization becomes a key to building the right product.

Prioritizing work is prevalent in the management portfolio and thus has weightage in Agile and Scrum teams. For product managers, it has always been the top priority to prioritize customer items whereas for technical teams, it is also the technology initiatives and debts that come in priority at times over business priorities.

Prioritization helps the team achieve its goals and motivates others to move in the right direction. Although people are not hired to prioritize, it is just the demand of the product manager’s role.

But why do we need prioritization in the first place? It is because companies and teams only have a small pool of resources; There is always 4 to 10 times more work to do compared to the pool of people we have in the team.

They must manage and allocate them wisely. But what task needs to be done prior? How do we decide that? 
This is where prioritization comes into effect and helps teams to streamline their working process. This is how they can deliver a quality product on time, adhering to all constraints. 

Teams must follow a set of things to pipeline or maintain the tasks dependency. But what happens if we break the series of tasks? In that case, we must be ready for questions to be answered.

Questions to be answered before prioritization

  • How do we know which task is more important to customers/stakeholders? How important is it? And from whom perspective is the task important?
  • How must the team decide what tasks must be done in a single product release? How to define that sequence?
  • How can we determine if the assumptions are reasonable to proceed? Are we proceeding in the right direction in delivering a quality product? And how could we improve the process and quality?
  • How do we know which one is of high priority? Technical initiatives or technical debts or business backlog items?

These questions are necessary to be answered to have a long-term vision. Several factors can significantly impact the ordering of product backlogs.

Agile Prioritization factors influencing product backlog ordering

All tasks within the product backlog are treated equally. 

product backlog

Among the different tasks at hand, how does the team prioritize those tasks? What factors help them decide the order of the product backlog? 
Since backlog can be of any of the above types, it is key to identify factors that can help prioritize in the right order.

Factors that help decide the priority of backlog

In a typical agile world, the prioritization is done by PO, based on the demand and criticality of the feature from a customer standpoint. However, this way of prioritization is not the right way. Lean-Agile thinking drives more factors for prioritization beyond the business priorities.

Let’s see what factors can help you decide based on Lean-Agile thinking.

  • User value or Business value
  • Product Cost included in developing and implementing the change
  • Time criticality
  • Technical dependencies
  • Risk / Opportunity factor
  • Lead Time
product backlogs

We will dive deep into these factors and how they help impact the decision of task priority.

  1. Business value 

Agile has a different approach to defining the business than was done earlier in the traditional approach. Business value is the solution that keeps the stakeholder and customers happy. 

But how is it used as a factor? Suppose there are two tasks, but one significantly impacts the business value; then the other can wait. The team must understand if the task can directly impact the value of its customers. If yes, then you have the answer.

There are features that have a lot more business value than others – for example, 

  1. “People who bought this also bought that” – psychologically we buy additional products because someone else bought them, not because we needed that.
  2. Waiting List in any reservation system and last-minute cancellation by the system and returning the money (ex., railway reservation)
  1. User Value

What is the value the user gets with Feature 1 compared to Feature 2? Which one has the higher user value?

  1. Cost/Size included in developing and implementing the change.

This addresses the cost that the company pays to build the product. Cost is associated with multiple factors – team size, amount of work the team can accomplish in a given period of time, infrastructure, another operational cost, etc. One of the key elements in this is the team’s delivery in a given time.

Relative sizing is a common agile practice to estimate the efforts required by the developer’s team to work on a specific product backlog. For that, agile teams assign story points to each backlog item. 

Story point is measured based on 3 parameters

  1. Size of the work – How big is the work? Is it a small, medium, or considerable amount of work?
  2. The complexity of the work – How complex is the story implementation? Is it simple OR complex?
  3. Knowhow of the work – How do we implement this user story? Do we have the technical expertise to implement it?

The team compares the size of the user story points. For complex user stories or large-size work or stories of less know-how, more effort is required and will take more time to complete. 

  • User stories are very small when the size is small with no complexity and with absolute clarity on how to implement.
  • User stories are sized as medium-sized when one of the 3 parameters is different from others
  • User stories are very large when the size of the work is big, complexity is high and know-how is very limited.
  1. Time criticality 

This factor is about prioritizing based on how critical the feature is to release in the near future. How soon you require a specific solution also defines the product backlog. Agile is a well-known approach for delivering a quality product within time while minimizing cost. 

There are few situations that this factor will help prioritize

  1. Delivering the product before it becomes a risk – for example, a critical security vulnerability issue not being fixed for a long time can become a high risk for the business and must be released soon.
  2. A critical feature that customer expects to need to be released to make sure business doesn’t stop
  3. Compliance-related issues not being resolved leads to business impact – for example GDPR not enabled will lead to loss of business

The teams cut down the over-engineering solutions to deliver the best by the last responsible moment. But if you deliver the product after the risk, it will be of no value. So make sure that you deliver the highest-order items first.

  1. Technical dependencies 

Some product backlog depends on another task that needs to be done as a priority. Suppose you create a product where you need the data stored in the database, then set the database with the correct data as the top priority. 

  1. Risk factor

Some system complexities increase the project’s risk. If the team does the backlog refinement, it will spread the risk management actions throughout the system. So the team can choose to work on complex tasks first to reduce the further risk before they become huge issues and they might miss the timeline. 

  1. Lead Time

Lead time is the time taken to deliver value to the customer from the time the customer requests it.

How do we prioritize?

Before prioritizing a backlog, it is good to check all the above factors and take an informed decision. This will help get an end-to-end view/systems view for prioritization so the right backlog will be prioritized and implemented.

One of the popular techniques used by the lean world is WSJF – Weighted Shortest Lead Time. This helps consider all the above factors before prioritizing the backlog.

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