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What is a Functional Requirements Document (FRD) I Introduction & Tips

A critical part of any project, and often the difference between success and failure, is gathering functional
requirements before the development process starts. A proper definition and documentation of these
requirements make things simpler for everyone; from business analyst to the customer, and from the
development team to the end-user. It helps create better estimates, reduces costs, improves user
satisfaction, and shortens the duration of the project.

On the other hand, failure to do this can lead to a lack of communication and understanding between the
stakeholders involved in the project and cause constant delays and numerous revisions. Ultimately,
poorly defined functional requirements can result in a faulty and unsuccessful product. Good functional
requirements document, or FRD, enables smooth implementation of the project and stands as an
indicator of competence and capability of a business analyst.

Table of Contents 

1. What is a Functional Requirements Document (FRD)?

2. What is the Benefit of a Functional Requirements Document (FRD)

3. What are the Sections (i.e. Elements) of a Functional Requirements Document (FRD)?

3.1. General Information

3.2. Functional Requirements

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3.3. Non Functional Requirements

3.4. Requirements Trace Ability Matrix

3.5. Glossary
What is the Difference Between a Business Requirements Document (BRD) and Functional
4.
Requirements Document (FRD)?
5. Conclusion – Functional Requirements Document (FRD)

What is a Functional Requirements Document (FRD)?

The functional requirements document (FRD) is a formal document detailing the requirements
required to achieve business needs. The document serves the purpose of a contract so that the client can
agree what they deem acceptable for the capabilities of the product. The functional requirements
document is a core document for product development.

Functional requirements specified in the document determine the intended behaviour of the system. The
FRD lays out the system’s functionality in detail by describing that expected behaviour which may be
realised as tasks, services, or functions. The document makes clear how the project team plans to satisfy
the business need. The contents of the document explain the said business need, current and desired
state, and functional requirements.

The FRD is independent of the solution. It doesn’t provide information on how the product will be
developed, how it will work, or what it should be, but rather what the product should do. As such, the
functional requirements commonly come in the form of requirements statements. The functional
requirements document commonly includes a list of requirements statements organised by the feature
with identified priorities.

This type of documentation is very important for the whole development as it presents a link between the
business and technology sides of the process. It’s a point where stakeholders and technical teams meet
and it further ensures cooperation between the two sides. The FRD reiterates the business needs by
turning them into functional capabilities and features that need to be achieved by the product or system.

It makes sure that the team working on the project fully understands the requirements and is
concentrating their efforts to develop a solution that will satisfy business needs. However, the functional
requirements document doesn’t force the teams to commit to specific designs nor does it impose the
solution. Instead, it allows them to determine in which way they will develop the project so it answers the
requirements.

In most cases, the functional requirements document is created by a business analyst. However, it’s a
good idea that they do it under the supervision technical expert who can offer more insight into the
technical side of things, for example, a system architect or a qualified engineer. Furthermore, during the
preparation of the FRD, the business analyst should consult the project manager and all stakeholders.
This is necessary to perform a proper analysis of the requirements and gain a full understanding of them.

In agile context a product owner or product manager may choose to specify product requirements using
a product requirements document (PRD)   a product requirements document is a document containing
all the requirements for a certain product.

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Functional Requirements and Specifications: A Quick Tutorial

What is the Benefit of a Functional Requirements Document

(FRD)
Documenting the functional requirements provides several important benefits to the organisation and to
the process of developing a solution.

It provides a single reliable source of requirements for the stakeholders.  FRD helps clear out all
misunderstandings and keeps the development teams as well as those on the business side of
operation all on the same page and working towards the common objective. It ensures that there’s
transparency, consensus, and agreement among all the stakeholders.

It reduces the cost and shortens the overall duration of the project. Clearly defined functional
requirements ensure that the teams have a shared understanding and a written record of what they’re
required to do, eliminating the need for frequent meetings. 

It makes the project more predictable. With well-documented and detailed functional requirements
teams can more accurately estimate the time needed for the development and potential budget. 

It helps timely identification of potential issues. When the functional requirements are thoroughly
captured during the discovery phase, it’s easier to identify the error on time and fix them. Problems
discovered during the phase of gathering the functional requirements are the easiest and cheapest to
correct. In addition, documenting functional requirements and analysing them is helpful for identifying
the missing requirements. Furthermore, the functional requirements documentation is useful as a
reference for checking whether the product provides all the functionalities required by the client.

How to create Functional Requirement Document (FRD) - Certified Business Analy…

Analy…

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What are the Sections (i.e. Elements) of a Functional

Requirements Document (FRD)?
The functional requirements document outlines the functions required to satisfy business needs, but the
format of the document itself may vary depending on the product. While there’s no standard format, there
are some common core elements that appear in almost every FRD.

General Information

The first section of the FRD always includes details on the purpose and scope of the project, documents
used as a source, and general information of key personnel. This section often includes:

Project description – the brief overview of the project contains information on the background of the
project or conditions that created the need for the product. It also details the intended purpose of the
project by describing the business objectives. Commonly, this section also lists the assumptions and
constraints of the project. Assumptions are future situations that may occur and are outside of the
control of the project but still may influence the outcome. Constraints are all conditions beyond the
control of the project that may in any way limit the development options. These may include
government legislature, standards pertaining to the solutions, or strategic decisions.

Points of contact  – the list of all the key participants in the project along with their roles, names, and
titles.

Document references – this section lists and names all the documents used as sources while
creating the FRD. These may include white paper analysis, meeting summaries, and any other
document contribution to the functional requirements document.

Functional Requirements

The functional requirements section is the core part of the FRD. It describes the essential functionalities
of the product. These are mainly the traditional requirements statements. Among others, this section
usually includes the following requirements:

Data requirements – this FRD section describes the data which needs to be supported by the
system. It does so by providing a logical data model consisting of entity definitions, entity-relationship
diagrams, and attribute definitions. This portion of the FRD also may include data migration and
conversion requirements. Sometimes it features data flow diagrams detailing the conceptual flow of
data. The requirements in this section do not describe the physical database.

Process requirements – process requirements may be shown through text, data flow diagrams, or
any other instrument that can provide key information on the processes supported by the product. 

Non Functional Requirements

In this section, the FRD explains the non-functional requirements of the product. These are constraints
imposed on the system. They’re used to define the quality attributes which will determine how the system
operates. The most common non functional requirements considerations are listed below.

Role-based security  – the focus of this section is on the need to control access to data. It details
who can view or modify the data. The security element of the FRD also describes the consequences
for the potential breach of security, the type of security needed, and the need to control access by
class of users, date attribute, and based on system function. In addition, this section states if the
security measures need to be certified by an independent authorised organisation.

Audit trail – in this section, the functional requirements document lists which activities will be
recorded in the audit trail of the product. The list of data should be recorded for each activity in the

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document.

Data currency – here, the document answers how current the data must be when the system
responds to the request for that data. The data currency should be specified for each type of potential
data request.

Reliability – the reliability element of the FRD details the probability that the product will perform
correctly and completely without being aborted. It should state the minimum acceptable level of
reliability by defining the mean time between failure, mean time to failure, and mean time to repair. This
section should also list the potential damages that can come as a result of a system failure.

Recoverability – this section of the functional requirements document deals with the system’s ability
to restore data and function in the event of a failure. It details, among other things, how soon the
system must be functional after the detection of a failure and what level of data currency needs to be
restored in case of database corruption.

System availability – in this section, the FRD defines the time went the product must be available for
use. Taking into consideration maintenance requirements, it states the hours when the system must
be available to users. It also defines the peak usage times when the unavailability is least acceptable.

Fault tolerance – the fault tolerance section describes the ability of the system to remain at least
partially operational during failure. If lists the functions that are not essential and don’t need to be
available at all times. On the other hand, it also lists the functions that are necessary for the system to
be operational. Of course, this isn’t always applicable, as with some systems the loss of one function
eliminates the need for other functions to work.

Performance – in this element, the FRD describes the requirements for response time for queries,
throughput, and expected volume of data and user activity.

Capacity – the capacity element of operational requirements lists the expected volumes of data and
corresponding expected capacity. The capacity requirements should be stated in terms of business
(number of user applications, etc.) and not as system memory or disk space requirements.

Data retention – in this section the FRD defines the length of time for which the data should be kept
and retained.

Requirements Trace Ability Matrix

The functional requirements and their implementation throughout the process are tracked by using a
requirements traceability  matrix .

The matrix includes every requirement along with its associated section number. The matrix is constantly
updated throughout the project to reflect the status of every requirement, so it can list each of them and
what product component it addresses once the product is ready for testing. The requirements traceability
matrix should include columns for requirement description, its reference in the functional requirements
document, test plan reference, and verification method.

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Glossary

Glossary commonly comes at the end of the functional requirements document and lists business terms
pertaining to the product. It shouldn’t include any tech-related terms.

Besides the elements mentioned above, depending on the product and process, the FRD may include
other sections, including methodology, modelling illustrations, other requirements, or business process
and workflow.

What is the Difference Between a Business Requirements

Document (BRD) and Functional Requirements Document
(FRD)?
What is the difference between a BRD and FRD? The difference between a BRD and FRD is that a BRD
(business requirements document) focuses on what the business needs, while an FRD (functional
requirements document) focuses on what the system needs to do.

A BRD should answer questions like “what does the business need this system to do?” and “what are the
goals of this project?” An FRD, on the other hand, should answer questions like “how will this system
work?” and “what functions does this system need to perform?”

In short, a BRD is more focused on the big picture, while an FRD is more focused on the details.

Conclusion – Functional Requirements Document (FRD)

A functional requirements document (FRD) is critical core document to gather the requirements before
the development process starts.

A well documented functional requirements document, or FRD, provides the basis for a smooth
development of the product solution.

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Jerry Nicholas
Jerry continues to maintain the site to help aspiring and junior business analysts and taps into the network of experienced professionals to
accelerate the professional development of all business analysts. He is a Principal Business Analyst who has over twenty years experience
gained in a range of client sizes and sectors including investment banking, retail banking, retail, telecoms and public sector. Jerry has
mentored and coached business analyst throughout his career. He is a member of British Computer Society (MBCS), International Institute
of Business Analysis (IIBA), Business Agility Institute, Project Management Institute (PMI), Disciplined Agile Consortium and Business
Architecture Guild. He has contributed and is acknowledged in the book: Choose Your WoW - A Disciplined Agile Delivery Handbook for
Optimising Your Way of Working (WoW).

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