ERP BasicsLast reviewed: 2026-07-30

Functional Specification (Pflichtenheft)

The functional specification (Pflichtenheft) is the document produced by the supplier that describes how and with which means the requirements set out in the requirements specification (Lastenheft) will be implemented – the binding answer to the requirements spec and the contractual basis of an ERP project.

A functional specification (Pflichtenheft) is the document produced by the supplier – the ERP vendor or implementation partner – that describes in concrete terms how and by what means the requirements formulated by the client in the requirements specification (Lastenheft) will be implemented. While the requirements specification answers the question "What should the system do?" from the customer perspective, the functional specification clarifies the "How": it translates each requirement into a technical and organisational solution and thereby defines what the supplier will bindingly deliver. In DACH projects the functional specification is defined under DIN 69901-5 and regularly serves as an annex to the contract.

The functional specification is typically created at the start of an ERP implementation project, once client and supplier have come together. It makes scope of delivery, interfaces, customisations, deadlines and acceptance criteria verifiable and protects both sides: the customer receives a documented commitment as to what they will get; the supplier delineates what is not included. Because an ERP system reaches deep into a company's processes, a precise functional specification is one of the most important instruments for avoiding misunderstandings, add-ons and disputes over the scope of delivery.

At a glance

  • The supplier's answer to the requirements spec: describes the "How", not the "What"
  • Defines the realisation, interfaces, customisations, deadlines and acceptance criteria
  • Defined in DACH under DIN 69901-5, often a binding contract annex
  • Created at project start after the vendor has been selected
  • Basis for acceptance, effort estimation and change requests

What a functional specification delivers in an ERP project

The functional specification translates the client's wishes into a robust, verifiable solution description. It takes up every requirement from the requirements specification and assigns it a concrete implementation – for example which module covers a function, which individual customisation is needed, over which interface data flows and which requirement is met with the standard. In this way a collection of target ideas becomes a blueprint for the project.

The functional specification thereby fulfils several functions at once: it serves as the basis for effort and cost estimation, as the reference for later acceptance, and as the yardstick for whether an additional requirement lies within the agreed scope or is treated as a chargeable change request. A cleanly produced functional specification approved by the client thus reduces the biggest risk in ERP projects – disputes over the scope of delivery – to a minimum.

Structure and components of a functional specification

A functional specification usually follows the structure of the underlying requirements specification, so that requirement and solution can be mapped unambiguously. A consistent numbering system ensures that every requirements-spec item receives a traceable answer.

Typical chapters

The usual components include an objective definition and project description, the functional and non-functional requirements together with their respective implementation, the data model including migration of the master data, the required interfaces (for example to a shop, DATEV or shipping providers), requirements for performance, availability and security, and a test and acceptance concept. This is supplemented by deadlines, milestones and the delineation of what is explicitly not part of the delivery.

Making requirements traceable

A proven approach is to mark each requirement with a classification: met by standard, met by configuration, met by individual development, or not met. This traceability shows at a glance how much customisation effort a system demands and later provides a clear checklist for acceptance. The more concrete and measurable a requirement is described, the less room for interpretation remains.

Functional specification vs. requirements specification: the clear distinction

The requirements specification (Lastenheft) and the functional specification (Pflichtenheft) form a pair but are frequently confused. The requirements specification is produced by the client and describes, from the client's perspective, which requirements and goals the ERP system must fulfil – deliberately open to solutions and without technical determination. The functional specification is the supplier's answer to it and describes, solution-oriented, how these requirements will be realised.

Memory aid: the requirements specification carries the "load" (Last) of the customer's requirements, the functional specification the "duty" (Pflicht) of the supplier to implement. In terms of timing, the requirements specification is created first during the ERP selection, then – after the decision for a supplier – the functional specification at project start. In practice, for smaller projects the two documents are sometimes merged into a joint "requirements/functional specification"; for clean responsibilities and acceptance, however, keeping them separate remains the standard.

Why the functional specification matters for ERP success

Many failed ERP implementations can be traced back to an unclear scope of delivery – to requirements that no one recorded concretely, and to expectations that client and supplier understood differently. The functional specification works precisely against this: it forces both sides to establish a shared, documented understanding before the project starts, and makes later discussions decidable against a binding reference document.

At the same time the functional specification is economically relevant. It is the basis for a robust quotation and the effort estimation, it defines the acceptance criteria from which a service counts as rendered, and it steers change management. Without a functional specification, projects easily spiral into add-ons and budget overruns. With a precise functional specification, effort can be calculated, project progress measured and responsibility clearly assigned in case of doubt.

Characteristics of a good functional specification

A good functional specification is complete, free of contradictions and, above all, measurably formulated: every requirement should be described so that at acceptance it is unambiguously clear whether it was met. Vague formulations such as "fast" or "user-friendly" should be made concrete – for example through defined response times, volume figures or fixed click paths. Equally important is the formal approval by the client, because only that turns the document into a binding basis for implementation and acceptance.

Example

Example: an e-commerce retailer introduces a new ERP

An online retailer with 25 employees has decided on a supplier after the ERP selection. Based on the previously created requirements specification, the implementation partner draws up a functional specification that answers every requirement with a concrete solution: the connection to the shop runs via the existing API, the handover to DATEV via a standard interface, the required batch management through configuration – and the individual returns process through a chargeable customisation.

In the functional specification, every item is marked as "standard", "configuration" or "individual development". At go-live, exactly this list serves as the acceptance protocol: point by point it is checked whether the promised implementation works. When the retailer subsequently wants a marketplace connection, the functional specification documents that this was not included – the extension is cleanly commissioned as a change request instead of becoming a point of dispute.

Frequently asked questions

The functional specification is produced by the supplier, i.e. the ERP vendor or implementation partner. It is their binding answer to the requirements specification created by the client and describes how the required requirements will be implemented. The client then approves the functional specification.
The requirements specification describes, from the customer perspective, what the system should do (the "What"); the functional specification describes, from the supplier perspective, how this is implemented (the "How"). The requirements specification is created during ERP selection, the functional specification at project start after the supplier decision.
The functional specification is often agreed as an annex to the contract and is then binding. For works contracts (Werkvertrag) it defines the owed scope of delivery and forms the basis for acceptance and warranty. Without an explicit contractual agreement, it initially has a documenting character.
In agile projects, the classic, fully pre-formulated functional specification is often replaced by prioritised backlogs and iterative specifications. The underlying idea remains: a traceable, verifiable description of the scope of delivery as the basis for acceptance and calculation.

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