BRD vs FRD

Last Updated on December 4, 2023 by Ewen Finser

Project documentation is one of the most critical steps in any business or software development process. Stakeholders need to have a shared understanding of what they want to build. By accurately documenting requirements, businesses can avoid scope creep, ensure everyone is on the same page, and accelerate development. 

A 2014 study by Project Management Institute (PMI) reveals that 37% of projects fail because of inaccurate requirement gathering. Establishing the correct requirements up-front avoids the need for expensive changes later on.

Business analysts typically use two different requirements documents: the Business Requirements Document (BRD) and the Functional Requirements Document (FRD). However, other documents exist, and they work together to provide a comprehensive view of the project.

Some of these documents include:

• Product Requirements Document (PRD)
• Use Case Specification Document (USD)
• Requirements Traceability Matrix (RTM)
• Market Requirements Document (MRD)
• User Stories 

Here, we’ll focus on BRD vs FRD. Both are important, but they have different purposes. Further down, we’ll discuss how the two documents differ, their features, and when you should use each one.

Bottom Line Up Front

The main difference between BRD vs FRD is that BRDs focus on what the product should do while FRDs focus on how the product should do it.

A business requirements document (BRD) is a formal contract between the client and supplier that captures all the work in a project. A functional requirements document (FRD) comprehensively defines the solution required to meet the business needs identified in the BRD.

Main Differences Between BRD vs FRD

The main differences between BRD vs FRD are:

• The primary audience of a BRD is the business stakeholders, clients, and customers, whereas the primary audience of an FRD is the development team, engineers, and testers.
• A BRD describes what the product should do, whereas an FRD describes how the project should do it.
• A BRD intends to elicit requirements from the client, whereas an FRD intends to define requirements for the development team. 
• The format of a BRD is free form with a mix of text and visuals, whereas the format of an FRD is more rigid, often using Unified Modeling Language (UML).
• A business analyst prepares the BRD document, whereas the business analyst prepares the FRD under the supervision of a technical expert (i.e., an architect).

What Is a Business Requirements Document (BRD)?

A business requirements document (BRD) is a high-level view of a project. Business analysts use BRDs to capture the goals of a project from the perspective of the business or organization. It’s one of the first steps in a software development process, and it’s usually created before any technical work begins.

Developers use it as a tool for executing the project and building the right solution. The BRD contains an overview of what the product should do, who will use it, and how they will use it. It also establishes measurable success criteria necessary to assess whether the final product meets the business’ needs.

As a document that establishes subsequent steps and guides development, a BRD is essential to building the right product. Different projects have unique requirements, so the business analyst must create a BRD that accurately reflects the specific needs of the project at hand. 

Components of a Business Requirement Document (BRD)

The uniqueness of a BRD means that there’s no standard template for the document. However, all BRDs share common features and elements. Essential components of a BRD are:

1. Summary statement: A BRD summary statement should provide an overview of the project. It establishes a connection between the project’s goals and the needs of the business. Essentially, it answers the question: “What problem are we trying to solve, and how will this project help us do that?”
2. Project scope: The project scope is a high-level view of what the project will achieve and includes deliverables, timelines, costs, and risks. It explains the organization’s responsibilities, the business, and the development team.
3. Objectives overview: The objectives overview lists specific goals the project should achieve. Each objective should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound. It describes the project’s background and lists stakeholders, business drivers (operational, market, financial, etc.), and primary success factors.
4. Stakeholder identification process: A stakeholder identification process is a tool for identifying and analyzing the project’s stakeholders. Business analysts use it to understand each stakeholder’s role, assess their influence on the project, and develop strategies for managing expectations. 
5. Measurables: Measurables are KPIs that help to assess whether the project was successful. Examples include increased revenue, decreased costs, or increased market share.
6. Project constraints: Every project has constraints, which are conditions or limitations that may affect the project’s success. Common examples include budget, time, scope, and resources.

These components cover the basics of a BRD. However, the document may also include other features, like assumptions and risks specific to the project. 

Objectives of a Business Requirement Document (BRD)

A BDR is the foundation of a project, so its objectives are broad. In general, a BRD should:

• Elicit requirements from stakeholders: To build the right product, developers need to understand the business’ needs. A BRD is one of the first steps in gathering these requirements.
• Define success criteria: The BRD’s measurables help assess whether the project was successful.
• Minimize scope creep: By documenting the project’s objectives, risks, and constraints, a BRD can help prevent scope creep.
• Serve as a reference point: The BRD is a living document that needs constant updating. However, it’s also a reference point for all stakeholders. It provides an overview of the project’s goals, objectives, and deliverables.
• Establish consensus with stakeholders: A BRD can help business analysts build buy-in from stakeholders. By getting everyone on the same page from the start, they can avoid misunderstandings and disagreements.

What Is a Functional Requirement Document (FRD)?

A functional requirement document (FRD) is a type of requirement document that specifies what a system should do and how it should work.  It contains more specific information about how the product or project should function, including descriptions of each feature. In a basic sense, it’s a derivative of a BRD and highlights the functional requirements. 

Business analysts under the supervision of a technical expert are responsible for creating an FRD. The document should be clear, concise, and free of technical jargon. It should also be easy to understand for all stakeholders. Like a BRD, it also describes a high-level overview of functionality but focuses on technical and specific details.

For instance, an FRD for a web-based application might specify that the login page should have fields for a username and password. It would also describe how the system should handle authentication. In contrast, a BRD for the same application might simply state that the login page should be secure. 

Components of a Functional Requirements Document (FRD)

There’s no set standard that all FRDs must follow. However, most FRDs include similar elements, including:

1. Introduction: The introduction should overview the system and its purpose. It should detail the purpose, scope reference, assumptions, and constraints of the system. Notable stakeholders should also be identified.
2. Background: The background section provides more context for the system. It should describe the current state of the system and any problems that the new system is meant to solve. 
3. Functional requirements: The requirements section is the meat of the FRD. It contains a list of all functional requirements, organized by category. Each requirement should have a unique identifier, name, description, and source. In some cases, the requirements may accompany an acceptance criterion.
4. User Interfaces: The user interface section should provide a high-level overview of the system’s interfaces. It should describe how users will interact with the system and any special requirements for the interface. 
5. Modeling illustrations: The modeling section should provide visual representations of the system. These illustrations can include diagrams, flowcharts, prototypes, and mockups. It should also include user requirements, use cases, and other relevant models.
6. Glossary: The glossary should contain a list of all terms, acronyms, and abbreviations used in the FRD. It should also provide definitions for each technical term. 

The use of FRDs depends on the organization, project, and product. It should follow the set organization policies, processes, and procedures.

Objectives of a Functional Requirement Document (FRD)

While the objectives of an FRD can vary from organization to organization, there are some common goals that most FRDs aim to achieve, including:

• Define the function of a system: The primary objective of an FRD is to define the function of a system. It should describe what the system should do and how it should work. 
• Interlink dependencies: An FRD should also identify any interlink dependencies between different functions. For instance, the login function may be dependent on the authentication function.
• Estimate risk and costs: An FRD can also help estimate the risks and costs associated with a project. By outlining all the requirements, it’s easier to identify potential risks during the development process. 
• Improve communication: An FRD can also improve communication between different stakeholders. By providing a clear and concise overview of the system, it’s easier for everyone to understand the requirements and objectives of the project. 
• Provide a holistic view of every requirement: The FRD should provide a holistic view of every requirement, no matter how small or insignificant it may seem. For instance, a requirement to display an error message when a user enters an invalid password may seem trivial. However, it’s still a requirement to be included in the FRD. 

Key Differences Between BRDs and FRDs

Now that we’ve gone over the basics of BRDs and FRDs let’s take a more in-depth look at the key differences between these two types of documents. 

1. Scope

The most significant difference between a BRD vs FRD is their scope. A BRD is a high-level overview of the entire project. It should provide a broad overview of the project’s objectives, requirements, and timeline. On the other hand, an FRD is a more detailed document that focuses on the system’s functional requirements.

When looking at the scope of a project, it’s essential to keep in mind the goal of each document. The BRD should provide a general overview of the project, while the FRD should give a more detailed system view. For instance, the BRD may state that the project should “increase sales by 10%.” The FRD would then detail how the system should achieve this goal. 

2. Audience

The audience of a BRD is the project sponsor, senior management, or critical other decision-makers. The BRD should provide enough information for these stakeholders to make informed decisions about the project. 

The target audience of an FRD is usually the development team. It should provide enough information for these stakeholders to understand the system requirements and start working on the project. It also gives quality assurance personnel the information to create test plans and test cases. 

3. Length

The length of a BRD can vary depending on the project. For example, a small project may only require a few pages, while a larger project may require a more detailed document. In general, though, BRDs tend to be shorter than FRDs. 

FRDs, on the other hand, are usually longer documents. These documents provide extensive documentation of the system requirements. As a result, they tend to be much longer than BRDs. A standard FRD is about 10 to 100 pages long, while a larger project may require a longer document. 

4. Who Prepares the Document?

Business analysts are solely responsible for creating BRD. Some organizations may involve project managers to ensure that the document meets the project’s needs. 

Business analysts work under the supervision of system analysts or technical experts to prepare an FRD. An implementation team may take part in the development of an FRD. However, their involvement is limited to providing input on the system’s functionality. 

5. Flexibility

BRDs are typically more flexible than FRDs because they deal with higher-level concepts that are less likely to change as a project progresses. FRDs, on the other hand, are more rigid because they often outline specific technical details that need to be followed closely for a system to work correctly. 

When to Use BRD and FRD

Both BRD and FRD documents are essential for any project. Once you have the BRD, you can use it to create the FRD. After the FRD is complete, you can use it to develop the project’s functional specifications. 

However, there may be times when you need to use one document over the other. For example, if you’re presenting the project to senior management, you’ll want to use the BRD. On the other hand, if you’re working with the development team, you’ll want to use the FRD. 

Below is a summary of when to use each document: 

Use BRD when: 

• You need to convince senior management to approve the project 
• You’re presenting the project for the first time 
• You want to provide an overview of the project’s objectives, requirements, and timeline 
• When outlining project requirements 
• When creating a high-level overview of the project 

Use FRD when: 

• You want to provide detailed information about the project’s functionality 
• You’re working with developers to create the system’s functional specifications 
• You need to ensure that everyone on the team understands the system requirements 
• When outlining detailed technical specifications for the project 
• When providing information that developers will use to create test plans and test cases 

A larger organization may use both documents from start to finish. In this case, the BRD is used to gain approval for the project. Once the project gets approval, the business analyst creates the FRD. After the FRD is complete, it’s passed on to the development team to develop the system’s functional specifications. 

Not all projects or businesses need both documents. For instance, a small business or small project with little complexity may only require a BRD. However, a project can’t run on an FRD alone because it’s a derivative of the BRD. 

FAQs

Conclusion

A BRD and FSD are essential documents for any project. The main difference between the two is that a BRD is a high-level document that outlines the business goals, while an FRD is a more detailed document that outlines the project’s functional requirements.

Both documents are prepared by the business analyst and reviewed by stakeholders and subject matter experts. 

When deciding which document to use, it’s essential to consider the project’s purpose and who will be using the document. Small businesses with little complexity may only require a BRD, while larger companies or projects may need both documents.