RICE clarifies Reach, Impact, Confidence, and Effort as a detailed prioritization structure for quantifying the possible worth of features, project ideas, and initiatives. The RICE standard enables product managers to quantify the evaluated worth of a feature or task idea, assembling it more relaxing to categorize them when determining their job order. By evaluating and scoring each product team’s competing ideas, they can develop a specific number to determine which initiatives should be prioritized and in which order. Product managers need unique methods and techniques to prioritize and achieve significant business outcomes.
Using a model such as RICE can provide three benefits for product teams. It enables product managers to make more informed decisions, minimizes personal bias in their decisions, and helps them defend their priorities to other stakeholders, such as administrators.
How does RICE work?
The RICE score is calculated by dividing the overall value by its effort to get there. This formula provides a standardized score that objectively decides which items to prioritize. We will break down each factor to understand its importance and how it works.
Reach represents the number of users or paying customers directly affected by the feature over a set period.
It can be a monthly customer, and it can be a monthly transaction or action in an event.
The impact is the total contribution a feature makes to a company product, reflected in the benefits its users will receive from those features. Depending on company usage, it can also mean that a feature will increase its conversion rate. Estimating how much users profit from these components is difficult, so there are several scales to choose from, and the Intercom scale is a widely used standard.
There are many ways to determine the impact. Some key questions to consider: Will this feature significantly improve our conversion rate? Does it help retain users? Will it significantly improve ease of use? Perhaps it will give users a fleeting moment to realize that this is what they need.
This metric indicates product manager confidence in his estimate. Sometimes he believes a project has a significant impact, but he lacks the data to support his assumptions. In other words, how confident are product managers about their reach and impact scores? How much data does the company have to support its score?
We measure confidence in percentage terms. Always ask himself: To what extent does manager data support his estimate? Typically, 100% means “high confidence,” “medium” equals 80%, and “low” is 50% because any data below that level is shot in the dark.
So far, we have reached scope, impact, and confidence, all regarding benefits to the company product or initiative. However, the effort represents the cost of the company initiative. For this reason, it plays a leading role in determining its overall RICE score. RICE scores are a simplified version of a cost-benefit analysis of a product team initiative or product. To determine the product manager’s “effort” score, he needs to look at how many people it takes to complete each task and how long those people take. For example, it would take five people, six months, to complete the project. It clarifies and helps determine product manager costs and his scores. Use the same scoring system created for Reach.
The RICE scoring model can support product teams to fast build a uniform framework that objectively evaluates the comparative significance or worth of concepts from different projects. RICE may be worth trying in the organization if the product manager is confused about other priority models.