SD 02: Functional vs Non-Functional Requirements: What You Must Know Before Building Any System
Clear requirements are the foundation of successful system design. They define expectations from both business and technical perspectives, eliminating ambiguity and reducing rework.
Introduction
Why Requirements Matter in System Design
Imagine building a house without asking the owner how many bedrooms they want or whether they need a garage.
Sounds ridiculous, right?
But that's exactly what happens when software teams jump into coding without clarifying what the system should do and how it should perform.
In the world of system design, requirements are your foundation.
They define the expectations of a system from both a business and technical perspective. Without them, you're building in the dark.
Functional requirements tell you what the system should do - logins, payments, notifications.
Non-functional requirements (NFRs) define how the system should behave - fast response times, security, uptime, scalability.
Clear requirements eliminate ambiguity, reduce rework, and ensure all stakeholders - engineers, designers, product managers, and clients - are on the same page.
When defined and documented properly, they guide every decision in the software development lifecycle (SDLC).
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Common Mistakes Developers Make Without Clear Requirements
Developers often focus on features, ignoring how those features should behave under pressure.
Here's what happens when teams skip proper requirements gathering:
Performance issues: The app works but crashes under load.
Security vulnerabilities: Login works but isn’t protected against brute-force attacks.
Scalability nightmares: Everything works until you hit 10,000 users - then it collapses.
Point to remember: A great feature is useless if it’s not usable, secure, or fast. Requirements help you avoid building a “functionally correct but practically unusable” system.
What Are Functional Requirements?
Definition and Purpose
Functional requirements define the core functionality of a system.
They describe what the system should do, from a user’s perspective.
If someone asks, “What features will the system provide?” - they’re asking about functional requirements.
These are the tasks, operations, and behaviors your system must support.
For example:
“The system shall allow users to register an account.”
“The system shall send an email confirmation upon registration.”
In technical terms, functional requirements focus on:
Input → Processing → Output
Data management (CRUD operations)
Business rules and workflows
Real-Life Examples
Let’s bring this to life with a simple app - say, a food delivery application.
Each of these functionalities defines what the system must do to fulfil its business purpose.
How to Identify Functional Requirements in Projects
Talk to users and stakeholders: What do they want the system to do?
Review current processes: If replacing an old system, what functions must be replicated?
Use diagrams: Flowcharts, use case diagrams, and user stories help uncover key operations.
Tip: Use the "Given-When-Then" format to write behavior-driven requirements:
Given a registered user, when they add an item to the cart, then the cart should update with the item and price.
What Are Non-Functional Requirements?
Definition and Importance
While functional requirements define what the system does, non-functional requirements (NFRs) define how the system performs.
Think of these as the quality attributes of your system.
How fast should the system respond?
How many users should it support?
How secure must it be?
How easy should it be to use?
These don’t add features but enhance usability, performance, and reliability. Without them, a system may “work,” but still fail in the real world.
Real-Life Examples
Let’s go back to our food delivery app.
Here are some non-functional requirements:
Performance: The app must load within 2 seconds.
Availability: The system must be available 99.9% of the time.
Scalability: Must support 10,000 concurrent users during peak hours.
Security: All user data must be encrypted in transit and at rest.
Usability: The UI must be mobile-responsive and accessible.
Common Categories of Non-Functional Requirements
Performance Requirements: Response time, throughput, latency.
Scalability: Horizontal/vertical scaling capability.
Security: Authentication, authorization, data encryption.
Reliability: System should operate correctly over time.
Maintainability: Easy to update, debug, and patch.
Portability: Can the app run across platforms or devices?
Compliance: GDPR, HIPAA, PCI DSS requirements.
Quick Note: NFRs often become system-wide decisions, impacting your architecture, choice of technologies, and deployment strategies.
Functional vs. Non-Functional Requirements: The Key Differences
Practical Differences in Implementation
Functional requirements often translate to feature development, while non-functional requirements often require:
Architectural design changes (e.g., adding caching for speed)
Infrastructure setup (e.g., load balancers for scalability)
DevOps configurations (e.g., monitoring and alerting tools)
How These Influence System Design Decisions
If you’re designing a banking system, security and data integrity (non-functional) will shape every functional design - right from login mechanisms to data storage choices.
If you’re building a real-time messaging app, latency and throughput requirements could influence your decision to use WebSockets instead of traditional HTTP polling.
Point to remember: Ignoring non-functional requirements in design is like building a sports car with no brakes - it might be fast, but it’s dangerous.
Gathering and Documenting Requirements
Stakeholder Interviews
The first and most crucial step in gathering requirements is talking to the right people. Stakeholders include everyone who has a vested interest in the system - product managers, end-users, business executives, developers, QA teams, and sometimes even regulators.
Why interviews matter:
They surface expectations, pain points, and goals.
They help discover both explicit and implicit needs.
They ensure you're building what the business actually needs—not just what seems logical on paper.
Sample questions to ask stakeholders:
What problem are we trying to solve?
Who will use this system and how?
What are the most critical operations?
What could make or break this system for you?
By conducting these interviews, you often uncover functional requirements ("I want to log in via Google") and non-functional ones ("It should work even with slow mobile internet").
Tip: Always confirm your understanding with written summaries or mock-ups to avoid misinterpretation.
Using Use Cases and User Stories
Once you've gathered enough insights, structure them using use cases and user stories.
Use Case: Describes how a user interacts with a system to achieve a goal. It's scenario-based.
User Story: A brief, informal description written from the end-user’s point of view.
Example:
Use Case: "A customer adds items to the cart and completes checkout using a credit card."
User Story: "As a customer, I want to add items to my cart so I can purchase multiple products at once."
Benefits:
Keeps requirements user-centric
Helps developers prioritize what to build
Ensures traceability throughout the project
Point to Remember: User stories should include acceptance criteria to clarify when the story is “done.”
Tools and Best Practices for Documentation
Documentation doesn't need to be a pain. Use the right tools and best practices to keep it efficient and collaborative:
Tools:
Jira + Confluence for agile teams
Trello or Notion for lightweight needs
Lucidchart or Draw.io for flow diagrams
Best Practices:
Version control your documentation
Use clear, jargon-free language
Group requirements by priority and component
Keep a change log to track updates over time
Pro Tip: Always link functional requirements to their corresponding non-functional requirements.
For example, a “Login feature” might require “2-second response time under load.”
Prioritizing Requirements in System Design
MoSCoW Technique (Must Have, Should Have, Could Have, Won’t Have)
Not all requirements are created equal. Some are essential, others are nice to have.
The MoSCoW method helps in setting priorities:
Must Have: System won’t function without it. (e.g., User authentication)
Should Have: Important but not vital. (e.g., Social login support)
Could Have: Adds value but optional. (e.g., Animated transitions)
Won’t Have (for now): Out of scope for the current release. (e.g., Dark mode)
Why it’s useful:
Keeps teams focused on what's critical
Helps manage stakeholder expectations
Supports phased delivery in agile development
Balancing Business Needs vs. Technical Constraints
Sometimes, business wants a feature that’s technically complex, or performance expectations that require significant infrastructure investment.
This is where trade-off discussions happen.
You need to balance:
Business value vs. Implementation cost
User experience vs. Technical feasibility
Speed to market vs. Long-term scalability
Example: Business might want real-time chat in version 1, but it might be more efficient to start with asynchronous messaging and add real-time features later.
Tip: Use architectural spikes and proof-of-concepts to assess feasibility before committing to complex requirements.
Creating a Requirements Traceability Matrix
A Requirements Traceability Matrix (RTM) helps map each requirement to its:
Business goal
Related user story
Design component
Test case
Why it’s valuable:
Ensures no requirement gets lost in translation
Tracks the status of each requirement through the SDLC
Helps during audits, compliance checks, and client demos
Sample RTM Entry:
Requirement ID Description Related User Story Module Test Case Status FR-101 Users must be able to reset password As a user, I want to reset my password Auth Service TC-101 In Progress
Quick Note: RTMs are especially useful in large, regulated projects like finance, healthcare, and aerospace.
Real-World Case Studies
E-commerce Platform
Functional Requirements:
Browse products, add to cart, apply discount codes, place orders
View order history, track shipment, process returns
Non-Functional Requirements:
Must support 1,000 concurrent users
Payment transactions should complete within 3 seconds
99.95% uptime expected during seasonal sales
Design Impact:
Used horizontal scaling, CDN caching for images, and failover servers
Integrated a payment gateway with a fallback option for reliability
Lesson Learned: Functional features bring users in, but non-functional attributes keep them loyal.
Banking System
Functional Requirements:
View account balance, transfer money, generate statements
Two-factor authentication for logins
Non-Functional Requirements:
Must comply with PCI-DSS
Data encryption (AES-256), audit trails, 24/7 availability
Recovery point objective (RPO) of 1 minute
Design Impact:
Architected for zero-trust, included tokenization for sensitive data
Used distributed databases with real-time replication
Lesson Learned: Security and compliance are not optional - they’re integral.
Social Media App
Functional Requirements:
Post images, follow users, comment, like
Receive notifications and messages
Non-Functional Requirements:
Infinite scroll should load within 2 seconds
App must handle 50K users simultaneously
Notifications must be delivered in real-time
Design Impact:
Used Kafka for real-time updates and Redis for caching
Applied content delivery networks (CDNs) for media files
Lesson Learned: For user engagement, performance and UX are just as important as core features.
Impact of Ignoring Non-Functional Requirements
Real-Life Failures and Lessons Learned
Healthcare.gov Launch (2013): The site crashed repeatedly due to an inability to handle unexpected user traffic - lack of scalability planning (an NFR).
Slack Outage (2022): A downtime caused by a deployment bug magnified due to the absence of robust failover - an oversight in availability and resilience planning.
T-Mobile Data Breach: Poor encryption and security measures led to the leakage of customer data - a failure to prioritize non-functional security requirements.
Key Takeaway: You can’t “patch” a bad design with a bug fix. Ignoring non-functional requirements early results in catastrophic rework later.
Performance Bottlenecks
Without clear performance benchmarks:
Your database might become the bottleneck.
The system may time out under traffic spikes.
APIs may take too long to respond, frustrating users.
Tip: Use load testing tools (like JMeter or Locust) based on your NFRs to test system health before release.
Security Breaches Due to Overlooked NFRs
It’s not enough that the login feature works. If it:
Stores passwords in plain text
Allows unlimited login attempts
Lacks multi-factor authentication
...you’re inviting disaster.
Best Practice: Treat security requirements as non-negotiable and design them into every component from day one.
Tools to Capture and Manage Requirements
Jira, Confluence, and Trello
Agile development thrives on fast-paced iteration and collaboration—and these tools are the champions of agile project management.
Jira: Ideal for logging user stories, sprints, and linking development tasks with requirements. You can even categorize stories into functional and non-functional types.
Confluence: Perfect for writing detailed documentation and requirement specifications. Teams often link Confluence pages with Jira tickets for traceability.
Trello: Simpler and more visual - great for early-stage planning or non-technical stakeholders.
Why they work well:
Easy collaboration
Centralized documentation
Version tracking
Custom workflows for approvals
Pro Tip: Use templates in Confluence to standardize how functional and non-functional requirements are documented.
Requirement Management Tools (IBM DOORS, Jama)
For enterprise-grade projects—especially in industries like automotive, aerospace, finance, and healthcare—you need heavyweight tools that provide full lifecycle traceability and compliance tracking.
IBM DOORS: Highly customizable, used for complex and safety-critical systems.
Jama Software: Great for collaborative specification writing with built-in impact analysis and risk assessment.
Key Features:
Requirements baseline comparison
Visual traceability matrices
Audit trails for every change
These tools ensure nothing falls through the cracks when hundreds or thousands of requirements are in play.
Version Control for Requirement Changes
Just like source code, requirements evolve. New features are requested, constraints shift, regulations change. That’s why tracking versions of requirements is crucial.
Best Practices:
Use Git or integrated document versioning tools
Tag major releases or milestones
Maintain a changelog of updated or deprecated requirements
Quick Note: A single change in a non-functional requirement (like a new SLA for uptime) can ripple across your entire architecture. Version control ensures you understand the impact.
Tips for Developers and Architects
Think Like a User First
Before writing a single line of code or drawing an architecture diagram, ask yourself:
“What would I expect this system to do?”
“How would I use this if I were the customer?”
Empathy drives better systems. The more time you spend understanding the end-user, the more relevant your functional requirements become.
Collaborate with Business Analysts
Developers and architects shouldn’t work in silos. Collaborating with Business Analysts (BAs) brings two benefits:
BAs understand the business goals and user expectations.
Engineers understand what’s technically possible and scalable.
Pro Tip: Involve BAs in requirement reviews. Their perspective often highlights edge cases and overlooked NFRs (like accessibility or legal compliance).
Validate and Revisit Requirements Regularly
Requirements aren’t “set and forget” They should evolve as your product, users, and market grow.
Hold requirement review sessions every sprint or release.
Use feedback from QA and customer support to adjust or add requirements.
Conduct A/B tests or user surveys to validate assumptions.
Lesson: A requirement that made sense at the beginning of the project might be obsolete six months later. Stay agile.
Interview Tips Related to Requirements Gathering
Common Questions Asked in Interviews
If you're interviewing for a system design or architect role, expect these questions:
How do you gather requirements for a new project?
Can you differentiate functional vs. non-functional requirements?
Give an example where ignoring NFRs led to problems.
How do you manage changing requirements mid-project?
Bonus: In behavioral interviews, you'll often be asked to walk through a real project and explain how you approached requirement analysis.
How to Structure Your Response
Use the STAR Method (Situation, Task, Action, Result) to structure your answer.
Example:
S: "We were building a health tracking app..."
T: "...and needed to define all the user and system requirements."
A: "I led stakeholder workshops, documented user stories in Jira, and collaborated with the QA team to derive performance metrics."
R: "We shipped on time, with <1% production bugs and a 4.8 user rating."
STAR Method for Scenario-Based Questions
Here's how to apply STAR in system design interviews:
Situation: Brief background
Task: What were you responsible for?
Action: What did you do specifically?
Result: What was the measurable outcome?
Interview Tip: Always mention tools used, techniques followed, and trade-offs considered - that’s what interviewers care about most.
Quick Notes and Summary Table
Bullet Points Recap
Functional requirements define what the system does.
Non-functional requirements define how the system performs.
NFRs are just as critical as features - ignoring them can cause system failures.
Use tools like Jira, Confluence, DOORS, and Trello for documentation.
Validate and update requirements often to keep pace with real-world changes.
Interviews test your understanding, communication, and analytical skills—be prepared.
Cheat Sheet for Developers
Topic Functional Requirement Non-Functional Requirement Focus Business logic and features System performance, usability, security Examples Login, Checkout, Profile update Uptime, latency, encryption, scalability Tracked via User Stories, Use Cases KPIs, SLAs, monitoring tools Defined by Users, Product Managers Architects, DevOps, Compliance Officers Test method Unit and integration tests Load testing, security audits
Conclusion
In the rush to build and deploy software, it’s easy to get caught up in coding features and forget about how the system should behave in the real world.
But building a product without clearly defined functional and non-functional requirements is like launching a rocket without a flight path.
Functional requirements give the product shape - what it can and should do.
Non-functional requirements give it strength - how fast, how secure, how reliable. Together, they define not just a working system, but a successful one.
Whether you're a junior developer, senior architect, or start-up founder, mastering the art of requirements gathering will save you time, money, and countless headaches down the road.
It’s not a step in the process - it is the foundation of the process.
So next time you're tempted to "just start building" stop.
Ask the right questions.
Document the right answers.
Design from requirements - and you’ll build better systems.
FAQs
1. Can a requirement be both functional and non-functional?
Generally, no. Functional requirements define what the system does, while non-functional requirements define how it behaves.
However, some requirements may seem to overlap - like “The system must encrypt data during login” - which ties function with performance and security.
In such cases, treat the “what” as functional and the “how” as non-functional.
2. Who defines non-functional requirements in a team?
Non-functional requirements are usually identified by system architects, DevOps engineers, product owners, and sometimes legal or compliance teams - depending on the system’s domain.
3. How often should requirements be updated?
Requirements should be reviewed at every major milestone - new releases, user feedback cycles, or when business goals shift.
Agile teams typically revisit requirements during backlog grooming or sprint planning.
4. What happens if requirements are incomplete?
Incomplete requirements lead to scope creep, missed expectations, and expensive rework.
Worse, it can cause system failures when unplanned use cases or traffic loads hit the system.
5. Are non-functional requirements optional?
Absolutely not. They are essential for real-world performance.
A perfectly working feature that’s slow, insecure, or unreliable is as bad as a broken one.
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