RICE Scoring Model | Prioritization, History, Method, Tips and Calculation
March 27, 2022 Edwin Kooistra
In today’s fast-paced corporate environment, businesses and individual contributors alike are constantly in the run for new ideas, products, and added features to the current portfolio. But with this race come situations where sometimes some difficult decisions need to be made.
In businesses and organizations alike, sometimes business managers or individual entrepreneurs are faced with a dilemma. They are looking at different business growth opportunities or initiatives that can be undertaken but not together simultaneously—the reason for which can be a lack of finances or human resources or even just time constraints.
But what remains is that they need to choose between one of these and that too objectively. And to help them do so, this is where the RICE scoring model steps in.
What Is Rice Scoring Model for Prioritization?
The RICE scoring model or RICE scoring framework is a business tool that helps decision-makers, whether business managers or product managers, prioritize different projects features and specifications to be added to a product. Despite being applicable in various business scenarios and product development, the RICE scoring model has widespread applications in product development.
The RICE prioritization method, just like a practical arrangement framework, helps you account for all the different factors involved when considering a project or added feature. RICE stands for Reach, Impact, Confidence, and Effort. It allows you to combine all these factors methodologically to give you a clear direction without letting personal biases get in the way.
In its true essence, the RICE framework allows you to quantify even the subjective and qualitative factors that you need to focus on when making a business decision. It also incorporates the future impact of that decision and how it compares to other choices and options available.
History of the Rice Scoring Model
The RICE scoring methodology was introduced to the world a couple of years ago by Sean McBride. Sean wrote about it initially in an article when he was a Product Manager at Intercom. Sean is no longer associated with Intercom and currently works for a team success platform.
Intercom is a solution provider company for sales, marketing, and support teams alike. Every day thousands of businesses use Intercom’s interactive customer communications platform, enabling better fostering of customer relationships and meeting increased customer demands.
How Does the RICE Score Method Work?
The RICE score method works by looking at four different factors and how they impact each option available to a decision-maker. Let’s look at each of these factors in detail and how we incorporate these when using the RICE score framework.
When talking about reach, it means the number of individuals or customers a specific project or feature will impact in a defined time. This can be calculated as the number of customers per month or even the number of daily transactions. It all depends on the kind of projects you are scoring under this model and what are its reach dynamics.
By impact, we mean the effect that a particular project, if undertaken, will have on the customers. You can define a scale of one to five, where one is the lowest and five is the highest to measure the impact. It must be kept in mind that not all projects have a definite high impact on customers and specific projects with even low implications are critical to be undertaken first.
To put it simply, confidence is how sure you are about your reach and impact numbers defined in the factors mentioned above. Confidence is measured in percentage, where 100% confidence means that the numbers for reach and impact are confirmed and backed by data.
Effort means the amount of input that needs to be let into a project for its completion. This effort can be measured in various ways, such as the number of employees required, the number of hours to be put in per week, and financial injection.
How Is RICE (Reach, Impact, Confidence, and Effort) Calculated?
Now that we know the factors that calculate the RICE score, let’s look at how to calculate this number using a defined formula.
The formula to calculate it is as follows:
(Reach*Impact*Confidence)/Effort = Rice Score
Let’s take an example of project 1, which has a reach of 350 customers per month, with an impact of three on a scale of five and a confidence level of 90%. Two months are required to complete this project in terms of persons per month when it comes to effort.
Calculating the RICE score for this example.
(350*3*90%)/2 = 472.5
You can calculate RICE scores for all the project options available similarly and finally choose the project with the highest score.
How To Effectively Use RICE Scoring Model?
The RICE scoring model is not some fixed mathematical algorithm that helps you identify the right option amongst many choices. It is a tool that you can use to help you prioritize different projects that you might want to undertake.
It can also help you sequence discussions and deliberations based on business priority. Therefore, to ensure practical usage of the RICE methodology, process owners should ensure that the data fed into the formula is accurate to the best of their knowledge, and all subjective ideas and perceptions have been assigned a quantitative value.
Why is RICE Score Prioritization Beneficial for Product Managers?
RICE score prioritization is not only beneficial for product managers but has become a tool of daily usage and even day-to-day decision making. It has several benefits for business managers and project managers alike, some of which are mentioned below.
- It directs data-based decision-making, free from emotions and personal inclinations.
- It aids in aligning all relevant stakeholders as they are informed of the factors on which a particular decision is made.
- It helps teams evaluate the correct KPIs and metrics to gauge their performance.
- It offers a flexible approach where it can be used to evaluate new ideas, products, added features, and even services updates.
- Because of the objective approach, it helps business managers defend their decisions in front of executives.
Best Tips to Improve RICE Framework Model for Prioritization
Here are some tips that you should keep in mind if you want to improve the usage of the RICE framework when deploying it in your daily operations or decision-making as a business owner.
- Always try to ensure data accuracy, especially when it comes to confidence in impact and reach. Wild guesses and overestimations should be avoided.
- Do not solely rely on the RICE framework. Using the RICE score, evaluate the low score projects that might be essential for strategic purposes.
- Some projects might be prerequisites to specific high-rated projects, which should be identified and considered.
The rice scoring methodology for prioritizing projects is a simple yet effective business tool that can help business managers and decision-makers make critical strategic decisions. Not only that, but its objective approach also actually helps take away personal biases that individuals might have towards their projects. Thus, ensuring that the business’ goals and visions are prioritized over personal recognition and interest.