The MoSCoW principle is a clever acronym that can help manage project scope and customer’s expectations. It stands for features that you
- Must have
- Should have
- Could have, and
- Will not have (would be nice, but don’t count on it)
The MoSCoW principle is the difference between a project focused on fulfilling a contract and a project focused on delivering business value.
In a contract-based project every requirement is a Must-have. There is no prioritization, no compromise. You might as well figure out the order in which you will tackle the contract’s objectives, build out your WBS and your Gantt chart, and get to it.
A business value oriented project is driven by the MoSCoW principle. The features and requirements of such a project follow the following distribution.
You have to work with the client to figure out what they want to get done, and what will either become part of the next phase of the project, or not be done at all. Figuring it all out and setting these priorities is not a simple task; this exercise could be very painful and even politically charged, but extremely crucial.
What could help in the process is to assign business value  to each feature. By itself, every feature is important and carries a high business value. The true value of a particular feature can only be understood in comparison. When you look at what is essential for your project to generate revenue, deciding between the must-haves and the could-haves becomes a little bit easier.
You are planning to buy a white color car 4 –door with diesel which can hold maximum of 5 passenger to travel with family. You also like to have automatic functions in the car like auto-lock system, power windows, automatic seat belt, sun roof system, rear view camera, GPS and so on.
Must have: car for 5 passengers, 4 door car
Should have: Diesel car, white color
Could have: auto-lock system, windshield
Won’t have: Extra features like sun roof system, rear view camera, GPS, power windows and so on.
MoSCoW approach enables to keep focused on the needs of the stakeholders in the project and deliver them at the target time.
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