Understanding Functional and Non-Functional Requirements

You’re in a sprint planning session. Engineering asks, “What kind of load do you expect on this new feature?”
A stakeholder asks, “Can we scale this for international users?”

And suddenly, you’re scrambling. Not because you don’t know what the feature does—but because you didn’t define how well it needs to do it.

Welcome to the world of Functional and Non-Functional Requirements.

If you’re building products but not documenting these clearly, you’re flying blind. The best PMs know that requirements are not just “tasks” to pass to engineering—they’re strategic tools to build alignment, reduce risk, and deliver products that scale.

This guide will show you exactly how to do that.

What Are Requirements?

Requirements are detailed, structured statements that define what a product should do (functional) and how well it should perform (non-functional).

Think of requirements as the architectural blueprint for your product. Just like you wouldn’t build a skyscraper without a plan, you shouldn’t build a product without clear, testable, prioritized requirements.

Functional Requirements (FR): The “What”

Definition:

Functional requirements describe the functions or capabilities a product must have. They focus on user goals, system actions, and expected behaviors.

Characteristics:

• Specific and measurable
• Directly tied to user actions or system functionality
• Derived from user stories, business rules, or system needs
• Testable with clear pass/fail outcomes

Example:

E-commerce Website

• Users can create accounts using email or Google login
• Users can add products to a cart and checkout via Razorpay
• Admins can manage inventory and apply discounts

How to Write Great FRs:

Use the Given–When–Then format:

Given the user is logged in
When they click on “Download Invoice”
Then the system generates a PDF file for the selected transaction

This ensures clarity and structure, especially when working with QA or writing acceptance criteria.

Non-Functional Requirements (NFR): The “How Well”

Definition:

Non-functional requirements describe the quality attributes of the system. These define how the system performs under various conditions rather than what it does.

NFRs affect scalability, performance, reliability, security, and usability. They’re crucial, yet often under-defined by early-stage PMs.

A login page that takes 10 seconds to load may work, but it’s not usable. NFRs ensure your product works well.

Categories of NFRs with Examples:

1. Performance

• Page load time must be <2s for 95% of users
• API response time <500ms for key endpoints
• Support 10,000 concurrent sessions without degradation

2. Security

• All data must be encrypted at rest and in transit (TLS 1.2+)
• System must comply with GDPR and SOC 2
• Passwords stored using SHA-256 hashing

3. Reliability

• Uptime SLA of 99.9% per quarter
• Automatic failover with 15-minute recovery time
• Transaction rollback on system failure

4. Scalability

• Horizontal autoscaling enabled during peak load
• Able to onboard 1000 new users per hour
• Handle 5x current user base with no architectural change

5. Usability

• New users complete onboarding in <5 minutes
• WCAG 2.1 AA compliance for accessibility
• Mobile-first responsive design for <375px screens

6. Maintainability & Portability

• Code modular and covered with 80%+ unit tests
• System deployable on AWS and Azure
• Feature flags used for A/B testing without code redeploy

Why PMs Must Own Both

Many product managers obsess over feature sets (FRs) and ignore the operational realities (NFRs).

But users don’t just care if a product works—they care how fast, how secure, and how reliable it is.

Failing to define NFRs leads to:

• 🔥 Scalability nightmares
• 💸 High customer churn due to bad UX
• 🚨 Security breaches and compliance fines

As a PM, you need to bridge product goals with technical expectations. That starts by treating NFRs as non-negotiable.

Prioritization Frameworks for Requirements

1. MoSCoW (Must, Should, Could, Won’t)

Use this to align with stakeholders and engineers.

Priority	Description
Must-Have	Essential to MVP or launch compliance
Should-Have	Important but not critical for day one
Could-Have	Nice to have if time allows
Won’t-Have	Explicitly excluded from current scope

2. Impact vs Effort Matrix

Helps make data-driven trade-offs.

Effort	Low Effort	High Effort
High Impact	Prioritize	Plan Strategically
Low Impact	Quick Wins	Avoid for Now

Requirements Templates (Copy & Use)

Functional Requirement Template

Non-Functional Requirement Template

Common Pitfalls (And How to Avoid Them)

Pitfall	Solution
Vague NFRs like “app should be fast”	Replace with specific metrics like “95% API calls <500ms”
FRs written without user perspective	Use user stories or “Given-When-Then”
Skipping NFRs during discovery	Include engineers and DevOps early in planning
Overloading MVP with non-critical FRs	Use MoSCoW or RICE to trim scope smartly

Final Thoughts: Build Products That Work and Wow

Functional and Non-Functional Requirements aren’t just PM deliverables—they’re your quality control, clarity, and commitment to building excellent products.

If FRs define what you’re building, NFRs ensure it’s something people love using.

So, the next time you’re defining a feature, ask yourself:
Is this functional need crystal clear?
Have I defined how well it should perform under pressure?

If yes, you’re not just a PM—you’re a product architect in action.