Tag Archives: functional decomposition business analysis

What is Agile Functional Decomposition?

What is Agile functional decomposition? (and why is it important?) Investopedia defines “functional decomposition” as follows:

“A method of business analysis that dissects a complex business process to show its individual elements. Functional decomposition is used to facilitate the understanding and management of large and/or complex processes and can be used to help solve problems…Basically, functional decomposition takes something complicated and simplifies it. The individual elements of the process and their hierarchical relationship to each other are commonly displayed in a diagram called a functional decomposition diagram.”

Why is that relevant to Agile? Agile is about maximizing the business value that a project produces. On small, simple projects, you might be able to discover what that business value is easily based on direct face-to-face discussion with the Product Owner and individual stakeholders. On large enterprise-level projects, that may not be so easy to do. As an example, I was involved in a large project with about 500 user stories and we had to do some prioritization to move things out to a future release. It’s very difficult to do that on a project of that size without understanding the relationships among the stories if they’re not organized into some kind of functional hierarchy.

Using Agile functional decomposition to organize stories into epics and themes makes it possible to keep all of the stories well-aligned with producing the higher-level business value that the project is intended to produce and makes it a lot easier to effectively manage the Product Backlog. It also provides a capability for traceability – you can look at the top-level functionality and then look down into the functional decomposition to verify that the lower-level functionality is really complete and sufficient to support the higher-level functionality.

Functional decomposition has been around for years but many people don’t think it is relevant to Agile projects – it’s one of those traditional, plan-driven practices that many people seem to assume is now obsolete and no longer relevant with Agile, but I don’t believe that is the case. You don’t have to completely throw away all the traditional plan-driven practices you may have learned in order to practice Agile and some of those practices become especially important as you begin to try to scale Agile to an enterprise level…Functional Decomposition is an example.