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How to Create the Perfect Product Requirements Document (PRD)?

Building without clarity is the fastest way to delay a product.

Teams often start developing the product with half-baked inputs or scattered feedback. They assume that meeting notes and chats are enough to start. But they aren’t. This leads to confusion, missed use cases, and plenty of back-and-forth during development.

A product requirements document (PRD) is created to bring clarity before development begins. It outlines the features to be built, the problems they aim to solve, and what should be delivered in the final output.

Whether you are a product manager or business stakeholder, this guide will help you understand what PRD is, its key components, and a step-by-step process to prepare an effective PRD.

What is a Product Requirements Document (PRD)?

A PRD, or product requirements document, clearly defines what product needs to be developed and why, before actual development starts.

A well-written PRD is not a formality, but it’s built to keep work moving without confusion.

Some of the core things usually captured in a PRD:

  • Business objectives
  • Which features are part of the current scope
  • Details about the user experience
  • What should be avoided or left out for now

Later, business analysts and other team members use the PRD to prepare a system requirements specifications document, which defines functional and non-functional requirements of the system in depth.

Did you know? It’s often said, “A PRD is the quiet friend of the product manager.”

How a PRD Differs from a Business Requirements Document (BRD)

Point of Difference
PRD (Product Requirements Document)
BRD (Business Requirements Document)
Purpose
It covers details about how the product should work from the end-user’s perspective.
It explains the business goals, needs, and expectations behind the project.
Content Type
Functional needs, user stories, feature scope, and basic flows.
Business problems, ROI expectations, risks, and cost justifications.
Level of Detail
Mid-level, focused on features and user needs
High-level, focused on business objectives and value
Ownership
Usually written by product managers
Often created by business analysts or project leads
Audience
Product managers, designers, developers, testers
Business stakeholders, project sponsors, clients, and sometimes product teams
Timing
Used before and during product design and development
Usually created before a project gets budget approval or go-ahead
Output Focus
What to build and why it matters to users
Why the project matters to the business and what outcome is expected

Key Components of a Product Requirements Document

There are no fixed components that you should use in the product requirements document.

In the image below, you can see the lists of components that a senior project manager, uses:

components of a PRD document

Here, we have listed some commonly used components to create a PRD:

  • Purpose: Define why the product is being developed, who will use the product, what problem it solves, and how it aligns with the company’s objective.
  • Features: Outline the key features of the product. Also, write down detailed requirements.
  • Scope: Lists what will be included in the release. In some cases, what’s being left out is also mentioned here.
  • Project Timeline: Specify the estimated timeline for each milestone.
  • Open Questions: Things that haven’t been decided yet. Keeping them visible helps teams avoid confusion later.

How to Write a Product Requirements Document (Step-by-Step)

The main aim of writing the PRD is to align the product and development team towards a common goal. Teams can follow the step-by-step process given below to write a solid PRD document:

1. Start with the problem, not the solution

At the start, summarize the problem and explain why you are building the product.

  • Example: “Users drop off during checkout because guest login isn’t available.”

A line like this gives the feature purpose. If the problem isn’t clear, the feature will likely miss the mark.

2. List goals in plain language

Avoid fluff here. Be direct about what the product or feature should achieve. One or two lines are enough.

  • Example: “Make it possible for users to complete purchases without creating an account.”

This helps the team focus. If extra things are added later, they can be weighed against the original goal.

3. Define what’s in scope and what’s not

Also, define the in-scope and out-of-scope for the product. So, teams can know what features are included and excluded in the next release.

  • For instance:
    • In-scope: Add guest login, send confirmation email.
    • Out-of-Scope: Save user data for future visits.

Small notes like these prevent misunderstandings later.

4. List Features

Now write what the system should do. Use short, clear points. Keep the language simple and focused.

Example:

  • If the user chooses “Checkout as Guest,” skip account creation
  • The email address must be collected before payment
  • Order confirmation must be sent within 5 minutes

Also, make sure to clearly define high-level functional and non-functional requirements.

5. Add the Product Release Timeline

No one can determine the exact timeline to complete the product. However, you can define the estimated timeline to complete each feature of the release. Based on the set timelines, development teams can prioritize feature development.

Example:

  • Social login should be implemented within the first five business days.
  • Payment API changes are expected next month

By noting this early, surprises can be avoided later.

6. Define Success Criteria

In this section, define the criteria that will help teams to understand whether the product is complete and customer-ready.

For instance:

  • 100% of valid user transactions (onboarding/off-boarding) processed without errors.
  • Zero security breaches related to unauthorized account access.

7. Stakeholder Review

Once the document is created, make sure that all stakeholders collaboratively review it. This way, teams can ensure that there is no missing feature and all team members are aligned on the same page.

A PRD is not written once and forgotten. Teams should keep updating it as requirements change.

Download the demo PRD document from here.

Creating PRDs using Modern Requirements

Writing PRDs in Microsoft Word might seem convenient at first, but it often turns into a mess once teams grow or changes start piling up. There’s no version tracking. Reviews happen over email. Templates get copied and edited manually, which increases the chances of missing something.

This is where a proper requirements management tool should be considered.

With Modern Requirements4DevOps, teams can use the Smart Docs feature to write PRDs inside Azure DevOps itself. To create a PRD, you can use the pre-defined meta templates or create a new one as shown in the video below.

This meta template can be reused again and again.

Furthermore, it offers a Microsoft Word-like editor, which makes it easier to edit the document. The videos below show how to create a document and embed Azure work items within your PRD.

Moreover, it also offers version control to track different versions of the document and a review management system to collaboratively review the document.

Over time, using Smart Docs helps teams write faster, review better, and stay in sync without switching tools.

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