Functional decomposition is an analysis method where complex processes are examined by dividing them into their constituent parts. According to the Business Analysis Body of Knowledge (BABOK), functional decomposition “helps manage complexity and reduce uncertainty by breaking down processes, systems, functional areas, or deliverables into their simpler constituent parts and allowing each part to be analyzed independently.”

Understanding functional decomposition

In business, functional decomposition is commonly used to capture project requirements. If the strategy is used properly, the organization can produce more accurate time estimates and determine whether a project is on schedule. Importantly, it can also identify smaller functions contributing to project delays and help stakeholders develop a deeper understanding of key processes.

Some of the terms unique to functional decomposition are listed below:

• Function – simply a task that is performed by a process, system, or device. Functions are expressed as a verb-noun phrase. For example, the functions of an ATM may include “reads cards” or “dispenses cash”.
• Decomposition – the process of breaking down.
• General function – a function that requires other functions to work in order to take place. 
• Subfunction – a function that has to work for a general function to take place. 
• Functional decomposition diagram – a diagram used to illustrate the hierarchical relationships between tasks and sub-tasks. Tree diagrams are commonly used because they clearly show how a large function can be split into many smaller functions. However, nested diagrams, flow diagrams, cause-effect diagrams, mind maps, and state transition diagrams can also be used.

Performing functional decomposition

In this section, we’ll take a look at a general approach to performing functional decomposition:

1. Determine the most general function – in other words, what is the most general task a project needs to accomplish? It is important to be concise and identify a single function that best encapsulates a goal or objective. A short description of the general function should then be placed at the top of the diagram.
2. Determine the closest subfunctions – these are the functions that must occur immediately before the general function. Each subfunction should be connected to the general function by drawing a line between them.
3. Move down to the next subfunction level – for the subfunctions identified in step two, find the “second-order” subfunctions that must occur immediately before each and connect them with lines. This process should be repeated until the team arrives at the most basic functions which cannot be broken down any further.

Subjects of functional decomposition

During the introduction, we mentioned a few benefits of using functional decomposition during project management.

In truth, however, the applications of the approach are numerous. Here are just a few examples of subjects that can be separated into smaller parts:

• Business processes – where functional decomposition can be used to clarify individual process steps to measure, manage, and optimize them.
• Business units – in this case, decomposition is used to understand how the organization works by evaluating individual business units. The diagram used in this context is the organogram, which illustrates organizational structure and shows hierarchical relationships between employees, managers, and departments.
• Solution component – where individual elements are built to facilitate solution design, implementation, or change. This is commonly used in Agile methodologies to plan and create products.
• Product and service development – in this case, functional decomposition is used to analyze and improve product and service design and implementation.
• Decision-making – lastly, the decomposition process improves decision-making by encouraging practitioners to identify key inputs, underlying models, outcomes, and dependencies.

Key takeaways:

• Functional decomposition is an analysis method where complex processes are examined by dividing them into their constituent parts.
• Performing a functional decomposition means first defining a concise general function that aligns with project goals or objectives. Functions and subfunctions are then illustrated with connecting lines to represent their hierarchical relationship.
• Functional decomposition is perhaps most associated with project management, but the approach is also used to decompose business processes, business units, solution components, product and service development, and decision-making.

Connected frameworks

Cynefin Framework

SWOT Analysis

Pareto Analysis

Failure Mode And Effects Analysis

Blindspot Analysis

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