Business Requirements vs Functional Requirements

Business Requirements vs Functional RequirementsA business plan or project requires a variety of requirements to help define goals and establish a scope for the work that will be undertaken. Requirements also provide context and objective ways to measure progress and success. Once business requirements are established, functional requirements are defined and developed in order to move a project forward.

Business Requirements

Business requires relate to a specific need that must be addressed in order to achieve an objective. Business requirements relate to a business' objectives, vision and goals. They also provide the scope of a business need or problem that needs to be addressed through a specific activity or project. For example, if a trade association has an objective to promote the services offered by its members, the business requirements for a project might include creating a member directory that increases awareness of members.

Good business requirements must be clear and are typically defined at a very high level. They must also provide enough information and guidance to help ensure that the project fulfils the identified need. In addition to understanding an organisation's mandate, objectives or goals, a specific business need or problem that is being tackled should be clearly defined and understood before developing business requirements. The need or problem can related to the organisation or business in general or focus on a stakeholder group, such as customers, clients, suppliers, employees or another group.

Functional Requirements

Functional requirements break down the steps needed to meet the business requirement or requirements. Whereas a business requirement states the 'why' for a project, a functional requirement outlines the 'what'. For example, if the business requirement is to create a member directory for a trade association, the functional requirements will outline who has access to the directory, how member register with the directory, who will have ownership of the data, what vehicle or vehicle will be used such as a website or paper-based directory, and so on.

When developing functional requirements, a comprehensive list of steps that will be taken during the project is developed. Functional requirements are very detailed and provide information on how business needs and goals will be delivered through a specific project. While senior managers will be more interested in business requirements, functional requirements are generally what staff and lower-level managers need to focus on when developing a project. The end objective is for each step to contribute towards achieving the business requirement or requirements. It should also be clear who will be responsible for each step.

Similarities and Differences

While both business and functional requirements related to the same project, there are major differences between the two. Both sets of requirements contribute to a common goal, although functional requirements are much more specific and detailed. While business requirements deal with mainly business goals and stakeholder expectations, functional requirements outline exactly how a project will support business requirements. A business requirement tells us what the future state of a project is and why the objective is worthwhile, while functional requirements tell us how we will get there. Functional requirements outline specific steps and outline how the project will be delivered. As a result, they help ensure a project is on track and are used for measuring performance.

Other Types of Requirements

Certain projects may need to define additional requirements beyond business and functional or non-functional requirements. For example, some projects may need technical requirements that outline what is needed to support the project during development, implementation and ongoing delivery. These technical requirements might include, for example, servers to store data and a process for ongoing maintenance related to a website. There may also be a need to establish transition requirements to assist with implementation or delivery. Examples of transition requirements include steps related to staff training and knowledge transfer to users once the project is completed.

Need Help?

Business Conultants can help companies forumlate their business plans as well as detail the business and functional requirements. Find business consultants in London, Manchester, York and throughout the UK.