What Are Business Requirements? (With Tips And FAQs)

By Indeed Editorial Team

Published 16 October 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A business requirement explains why the organisation is pursuing a project. It describes the anticipated benefits the organisation or its customers can anticipate from the project. Understanding the requirements can help you successfully plan and implement a project. In this article, we define what business requirements are, discuss the requirement document with its components, list characteristics of a good requirement, share tips for writing an effective one and answer a few frequently asked questions.

What Are Business Requirements?

Business requirements define the business necessity and success criteria for a project. They describe the importance of the project, detail its beneficiaries, specify the time and location and decide the evaluation criteria for the progress. Such requirements are the essential activities an enterprise performs to achieve its objectives while keeping the rest of the solution independent.

Well-organised and precisely defined requirements have multiple advantages. They help to comprehend how the requirements may contribute to the organisation's growth and reduce the likelihood of project failures resulting from poorly defined requirements. The precise ideation of requirements can also help create a business case, vision documents, project charter, project scope definition and project plan.

Related: What Is A Business Plan? (Types And Importance)

What Is A Business Requirements Document?

This document (BRD) records and describes the business's fundamental requirements. Customers and end-users are the primary target audience of such requirements documents. A well-written requirements document helps achieve the desired objective of developing a successful product within the allotted time frame. It is a formal report that outlines the objectives and requirements of a new project, programme or business solution. It describes a business requirement or objective, along with anticipated project outcomes. After approving the BRD, the company or team can determine the optimal strategy for developing the solution.

The BRD provides clarity, maintains focus and eliminates ambiguity regarding the project's requirements. It often includes the following sections:

  • Executive summary: After completing the entire requirement document, you draft this summary. This section provides an overview of the project requirements and summarises the entire BRD.

  • Project objectives: This section describes the goals and objectives of the project and mentions what the work may achieve. The objective of a project allows you to show how it aligns with the business goals.

  • Necessity: The necessity section in the document helps communicate the project's significance and how it can ultimately affect the company's operations and goals. Before detailing the rest of the project, it is a great idea to establish rapport with your peers by justifying your viewpoint and earning support from stakeholders.

  • Project scope: The scope defines its boundaries, helps managers determine what is and is not part of the project and helps the team stay in sync to allow optimum resource utilisation. You can more accurately describe the project's outcome in the requirements document when you are certain of its scope.

  • Requirements: You list all the project's requirements in this section after gathering them from important stakeholders. Specify the number of personnel and financial and other resources required to complete the project successfully.

  • Key stakeholders: The next step is to identify important stakeholders and assign roles and responsibilities by mentioning each individual's name, department and expected contribution to the project's success. This helps remove ambiguity and confusion by making teams aware of their roles and responsibilities in the project.

  • Schedule, timeline and milestones: Having a schedule with clear milestones helps keep your team accountable while also enabling you to establish credibility with lending institutions, clients or upper management. Make sure you consider some extra time for any unexpected difficulties your team may experience in the future during the project execution.

  • Cost-benefit analysis: To support your case for the project's return on investment (ROI), you include the associated costs and expected benefits in the cost-benefit analysis.

Related: 9 Project Management Types For A Project Manager

Characteristics Of A Good Requirement

A good requirement typically fulfils the following four fundamental criteria:

Specific

A good requirement is clear, concise and specific while also capable of conveying the entire necessity. Concise statements also allow easy organisation of requirements and improve their readability. They are not ambiguous and have a single possible interpretation. Following are a few considerations which make sure that a requirement is specific:

  • Using consistent terminology while writing requirement

  • Avoiding the use of jargon or specialised terms and when used, defining them in a glossary to remove any possible confusion

  • Reducing the adverb words like quickly, usually and frequently, as they can be confusing since different people may have varying interpretations of such words

Related: 19 Essential Project Management Skills To Master

Verifiable

When you can test a system or product to see if it meets the requirement, you consider it verifiable. A requirement specifies measurable data that you can examine, analyse or demonstrate. As you examine a requirement, consider how you can show that the final product satisfies it. Establishing precise conditions with verifiable aspects helps product approval.

Attainable

A good requirement is attainable. It has to ability to adhere to the budget and schedule constraints and is technically feasible. Include members of the development team in the review process to anticipate technical issues. Before having a requirement in the product specification, your team may require research to determine its viability. Consider rephrasing the necessity as a goal rather than a requirement if you are still uncertain about the attainability of your desired outcome.

Related: SMART Goals: Definition And Examples

Clear

An ideal requirement is clear and easy to understand. It communicates a single core idea. Such requirements use concise, simple sentences with consistent terminology. When possible, it uses specific names for the solution or product and deliverables and refers to them solely through those names throughout the requirements. It has a clear and consistent language. While defining components, it also names them and refers to them only by those names. It may utilise acronyms if necessary to keep the document brief.

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Tips For Writing A BRD

Consider the following tips while writing an effective BRD:

  • Gather requirements carefully. These requirements are crucial because they serve as the framework for your entire project. To thoroughly collect requirements, use tools such as workshops, polls, surveys and interviews.

  • Research past projects. By looking at previous projects, you can quickly determine the specifications of projects similar to yours and then justify including them in your current project. You can also see what did work and what did not, helping you to avoid making expensive mistakes.

  • Welcome suggestions. Be receptive to criticism and ideas when brainstorming or working with peers. It helps strengthen the bonds between team members and presents various perspectives to assist with project execution.

  • Be clear and concise. Since BRDs are text-heavy, it is beneficial to write them in straightforward terms so that everyone can easily review them. As everyone reading the document may not be technically savvy, avoid using unnecessary jargon or undefined acronyms.

  • Include visuals. When relevant, include illustrations, such as charts and diagrams, as they can help clarify your point.

Related: Business Strategy Components And Examples

Frequently Asked Questions

Here are some related frequently asked questions:

What is requirement gathering?

Requirement gathering is the process of creating a list of requirements to describe a project's purpose and focus. Whether they are customers, staff members or vendors, you can get insights from the stakeholders. Gathering requirements often serves as the project's blueprint. While properly established requirements can promote success, improperly established ones can have the opposite effect. Usually, there are two following types of requirements:

  • Functional: These include the processes, data and interactions the client wants to implement and the interaction between the system and its environment.

  • Non-functional: These requirements include technical aspects such as encryption, security, disaster recovery, hosting and business operation.

Related: Programme Management Vs Project Management (Definitions)

How do business rules differ from requirements?

The requirements define what an employee can do to adhere to the business rule. A requirement and a rule can exist separately. Requirements typically change when an organisation changes a rule. For instance, customer service representatives might require accepting online orders from customers who have online accounts if the business has a policy prohibiting them from doing so if the customer lacks an online account.

Related: How To Write Requirements For A Job (With 3 Examples)

What are non-functional requirements?

Non-functional requirements specify and define the system's functionality. Though its name suggests, it does not interfere with the system's functionality. Even if you do not meet the system's non-functional requirements, it can still function. Non-functional requirements are crucial because of their usability and they help identify elements that influence the user experience. Functional requirements are concerned with user needs and product features, whereas non-functional requirements are more concerned with the characteristics of the product and user expectations.

How does a BRD differ from functional requirements document (FRD)?

Both FRD and BRD have important roles in developing the business strategy. They both contribute to developing and accomplishing the company's business objectives, but they are fundamentally different documents. A BRD discusses what the business requires doing, whereas an FRD describes how to achieve it.

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