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A functional requirement, in software and systems engineering, is a declaration of the intended function of a system and its components. Based on functional requirements, an engineer determines the behavior (output) that a device or software is expected to exhibit in the case of a certain input. A system design is an early form of a functional requirement.
Functional requirements of a system can relate to hardware, software or both in terms of calculations, technical details, data manipulation and processing or other specific functionality that defines what a system is supposed to accomplish. A functional requirement can be in the form of a document explaining the expected types of outputs when the device (system) is placed in a certain kind of environment. A functional requirement is said to be a later form of a system design because a design is the outcome of overcoming a certain kind of a problem (technical/non-technical) being faced.