Table of Contents
Table of Contents

Functional Decomposition: Definition, Diagrams, and Applications

By
Adam Hayes
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Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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Updated November 29, 2021
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Khadija Khartit
Khadija Khartit
Reviewed by Khadija Khartit
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Khadija Khartit is a strategy, investment, and funding expert, and an educator of fintech and strategic finance in top universities. She has been an investor, entrepreneur, and advisor for more than 25 years. She is a FINRA Series 7, 63, and 66 license holder.
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Katharine Beer
Fact checked by Katharine Beer
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Katharine Beer is a writer, editor, and archivist based in New York. She has a broad range of experience in research and writing, having covered subjects as diverse as the history of New York City's community gardens and Beyonce's 2018 Coachella performance.
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What Is Functional Decomposition?

Functional decomposition is a method of analysis that dissects a complex process in order to examine its individual elements. A function, in this context, is a task in a larger process whereby decomposition breaks down that process into smaller, easier to comprehend units.

In business, functional decomposition is used to facilitate the understanding and management of large and complex processes. Functional decomposition helps solve problems and aids in the development of business operations, computer programming, machine learning, and a variety of other fields.

Key Takeaways

  • Functional decomposition breaks down a large, complex process into an array of smaller, simpler units or tasks, fostering a better understanding of the overall process.
  • A functional decomposition diagram contains the whole function or project along with all of the necessary sub-tasks needed to complete it.
  • Functional decomposition is a problem-solving tool used in several contexts, from business and industry to computer programming and AI.

Understanding Functional Decomposition

Functional decomposition has its origin in mathematics, where it refers to the process of analyzing the links and relationships between all the components that create a functional relationship so that the original function may be recomposed. At its essence, functional decomposition takes something complicated and simplifies it.

Also, the decomposition of a process or function into smaller sub-functions can help project managers to determine how the individual functions or tasks help to achieve the overall project's goal. Both large and small businesses use functional decomposition in their project analysis to determine whether a project is on target or if there are smaller sub-functions that are holding up the process.

Functional Decomposition Diagrams

The individual elements of the process and their hierarchical relationship to each other are commonly displayed in a diagram called a functional decomposition diagram. The diagram is shown in a top-down format illustrating a process. A functional decomposition diagram contains the overall function or task as well as the necessary sub-functions or tasks needed to achieve the overall objective.

Other common business methods for simplifying complex problems and processes include decision trees, which allow users to consider multiple possible solution paths to a problem, as well as flow charts that visualize the temporal sequence of a process.

Functional Decomposition Applications

Functional decomposition has applications in a variety of disciplines, such as systems engineering, software architecture, database theory, machine learning, knowledge representation, and signal processing. 

Practically, functional decomposition is used by engineers to describe the steps taken in the act of breaking down the function of a device, process, or system into its basic components. As a result of the analysis, a functional decomposition diagram will detail the functions, tasks, and sub-tasks and how they work together. The diagram may also address any problems, as well as suggest solutions to those problems.

Functional decomposition is especially important in programming. Once a diagram has been created, coding may begin as the programmer may then work on the most basic components first and then build out an application. As such, functional decomposition helps focus and simplify the programming process. One drawback, however, is that functional decomposition can be especially labor-intensive and time-consuming.

Functional Decomposition Steps

The process of functional decomposition can be broken down into several steps. The use of a functional decomposition diagram is key to this step.

  1. Find the basic function: What is the basic task a device or process must accomplish?
  2. List essential sub-functions: These sub-functions or sub-tasks are instrumental to the success of the basic function.
  3. List the next tier of sub-functions: These sub-functions serve the upper-level sub-functions.
  4. Inspect the diagram: If there are functions that have been omitted, add them to the diagram.