What is a Product Requirements Document? Components, Benefits, and Best Practices

Before starting a product or project, it is vital to define all necessary requirements, including objectives, functionalities, and user benefits. The product requirements document sets a clear direction for product development, helping development teams understand what a product should do and why it matters to the organization and its end users. 

In a nutshell:

• The product requirements document defines all capabilities a future product must include
• The PRD is created at the beginning of product development to keep stakeholders, team members, and managers aligned on expectations
• Core components of a PRD include objectives, goals, assumptions and dependencies, requirements, UX mockups, questions, and out-of-scope exclusions
• PRDs clarify your product vision, increase workflow efficiency, ensure effective resource management, and reduce the risk of scope creep

What is a product requirements document?

The product requirements document (PRD) is a product document that identifies all requirements a team must include for a product’s release. It defines what a product is for, why it is needed, and what it needs to deliver the promised value. 

The purpose of the PRD is to align stakeholders and team members on a product plan. It is a shared reference that helps teams remember a product’s main objectives. 

These documents vary in complexity depending on the project management framework you choose. Waterfall projects will require more detailed planning, while Agile projects only need basic outlines. 

What is included in a PRD?

The product requirements document should contain objectives, goals, success metrics, assumptions and dependencies, requirements, UX mockups, questions, and out-of-scope ideas. 

Objectives

The objectives component answers why you’re building the product. It provides a detailed explanation of the problem your product intends to solve. 

Because the objectives section explains the product's significance, it needs to prove that the problem you defined exists and is worth solving. This means providing data gathered by your research team and outlining the issues in your industry that create the need for your product. 

The section also describes the kinds of buyers affected by the problem. It outlines the benefits they will gain from using the product. 

Finally, this section should explain how the product aligns with the company’s objectives. A worthy product endeavor should benefit not only the end user but also the company and its efforts to improve. 

Let’s say you run a B2B SaaS platform. You intend to add two-factor authentication to protect sensitive data. You would define the problem from the user’s perspective: You are afraid that malicious actors can access your company’s information through the platform you use.

The users interested in this product are likely business owners who store valuable information on your platform. The benefits they will receive include enhanced security, streamlined logins, and peace of mind.

Building this product might help your organization increase customer trust and loyalty.

Goals

The goals section highlights the outcome the product intends to achieve. It should have a clear idea of what success looks like for both the company and the user. 

What does the product empower the user to do? What benefits will the company gain from solving the users’ problem?

2FA will empower the user to protect their information. In turn, the company gains their trust and loyalty.

Success metrics

To remove ambiguity, you need to define clear metrics for measuring success. You should outline what to look for as evidence that you’ve solved the problem you earlier identified. 

Possible success metrics for a 2FA feature could include the following:

• Number of user accounts with 2FA enabled
• Number of successful logins
• Ratio of total user accounts to compromised accounts 

Assumptions and dependencies

It’s important to anticipate any external factors that might help or hinder workflow efficiency—here’s where assumptions come in. These are ideas you consider true but have yet to prove. 

Making assumptions allows you to estimate the complexity of an endeavor.

Meanwhile, dependencies are requirements that depend on prerequisites to function. Anticipating dependencies allows you to identify what tasks to prioritize early in development. 

A possible assumption for a 2FA feature is that users will use 2FA for their login. It also assumes that users will be willing to provide additional personal data, such as their mobile phone number. 

When deploying a 2FA feature, you will need to collect the data the user will use to confirm their login. As a result, data-gathering will come before testing whether the feature works on the user's end. 

Requirements

The requirements section lists the minimum features necessary to make the product functional. Typically, the requirements are listed as user stories to help teams visualize the feature from the perspective of the end user. 

For example, drafting user stories for a 2FA feature would look something like this:

UX mockups

The UX mockup section shows what the product’s design might look like. Including the UX mockup in the PRD helps engineering teams understand how the user might navigate and interact with the app. 

Questions

The questions section is where the team, stakeholders, or other relevant individuals can raise questions not covered in the previous sections. This ensures that everyone involved in the product agrees to the requirements. 

Below are some questions you might include in a 2FA PRD:

• How will users access their accounts if they lose the device that is connected to 2FA?
• How will we make users aware of the feature?
• How quickly will we roll the feature out?

Out of scope

This section outlines what the project does not cover and why. It ensures that the team allocates resources exclusively to necessary requirements. It also ensures that you and your stakeholders are aligned on your goals. 

For example, if you’re working on a 2FA feature, a related feature that you might classify as out of scope is biometric login support. 

The Shortcut Docs feature includes a product requirements document template to help you kickstart product planning. Read the Shortcut Docs page to learn more. 

The benefits of PRDs

A well-written PRD yields your team multiple benefits, including clearer product visions, increased efficiency, improved resource planning, and reduced scope creep. 

Clearer product vision

Writing a PRD forces you to think more clearly about your goals. It ensures alignment between what customers in the current market need and what your company aims to achieve. The format of a PRD also asks you to question whether your product is needed, increasing the chances of product-market fit. 

It also ensures that you conceptualize your product’s essential features. This gives your team a clearer picture of what they will work on day to day. 

Increased efficiency

When the team has a well-written PRD, they have a clearer picture of the product’s goals and requirements. From there, they can build a comprehensive product backlog to guide the development direction. 

These guidelines make work easier for team members to predict, increasing efficiency. 

Ensures effective resource allocation

PRDs help you understand what resources are necessary to develop a product. This helps you plan resources more effectively, prevent waste, and ensure you always have what you need. 

Reducing scope creep

The PRD defines the key features a product needs to function. It also explicitly states which problems are out of scope, preventing teams from allocating resources to anything unnecessary. A well-written PRD keeps the team focused on the defined goal. 

Best practices when writing PRDs 

By following these PRD best practices, you set the stage for a well-organized project that meets expectations and adapts to evolving needs.

Align complexity with project management methodology

The effectiveness of your PRD often hinges on how well it aligns with your chosen project management methodology.

Project management methodologies differ in their level of upfront planning. A waterfall project would require a high degree of preparation, given that each stage is dependent on its predecessor. Therefore, a waterfall project would benefit from an extremely detailed PRD.

Meanwhile, Agile PRDs are more sparse. Agile requirements evolve through time, which means flexibility is essential. The more complex your PRD is, the more you delay actual development. 

Identify target persona

One of the PRD’s main purposes is estimating scope. This is easier if you have a clear idea of who your target audience is. Establishing a target persona narrows down the problems your product needs to solve. This is especially helpful for building the out-of-scope section. 

Map out user flow

Before building UX mockups, map out how the user will navigate your product to execute their intended task. This will give you a clearer understanding of how to build your wireframe on top of helping stakeholders visualize the user journey. 

Estimate a release timeline

Including a release timeline in your PRD helps teams visualize upcoming work. It also helps you identify which tasks need to be prioritized and when. 

Get team-wide approval

You should seek approval from everyone involved in the project, including stakeholders, team members, managers, and other organizational higher-ups. This ensures that workflows will run smoothly and that expectations are aligned. 

Team members, who work on the ground level, can help you determine whether the requirements outlined are achievable and realistic. Meanwhile, stakeholders and higher-ups can communicate their needs and goals. 

Summary

Nobody wants to enter a project without a game plan. A lack of preparation before development leads to misallocated resources, wasted time, burnt-out teams, and dissatisfied stakeholders. 

The first step in product development planning is making a PRD. This document will communicate to the team, stakeholders, and other relevant individuals what the project intends to accomplish and the requirements needed to meet that goal.

Build a PRD to establish a product’s objectives, goals, success criteria, and requirements. The document provides a clear initial guideline for development work, ensuring efficiency while keeping teams aligned with stakeholder expectations.

PRDs are great tools for ensuring proper project execution. To streamline product development further, consider using project management software. Shortcut’s project management tools help the entire team stay on top of work by providing planning, task management, and reporting tools. 

Read the Shortcut homepage to learn more.

Frequently asked questions (FAQ)

Are you allowed to make changes to the PRD

You can make changes to your PRD if the framework you choose allows it. Since waterfall projects discourage deviating from the original plan, the contents of a waterfall PRD would be set in stone. 

However, agile projects encourage change and allow PRD adjustments according to changing requirements. 

What is the difference between the product backlog and the product requirements document?

Product requirement documents establish the main problem a product intends to solve while defining the core characteristics that would make it functional. 

Meanwhile, the product backlog is more comprehensive. It acts as a checklist of features the development team needs to complete. It is subject to change depending on evolving requirements. 

What does a good PRD look like? 

A good PRD concisely sells your product concept to stakeholders. It is specific, with clear success metrics, supporting data, and UX mapping. It is clear about what the product aims to achieve and how needed the solution is. 

The PRD should also illustrate how the user will interact with the product and what benefits they will derive from it. 

Who is responsible for the PRD?

The product manager drafts and presents the PRD. However, it requires approval from all stakeholders and team members.

What is the difference between a BRD and a PRD?

BRD stands for business requirements document. It outlines all what a business does and why and how it requires a defined project effort. BRDs can guide planning for any type of project, while PRDs exist for products specifically. 

What is the difference between an MRD and a PRD?

MRD stands for market requirements document. It is a product marketing document that describes the current market for the product. It typically breaks down customer requirements, target personas, competitor analysis, and revenues. 

Meanwhile, PRD is more focused on what the product does and why the solution matters.