1. Establish the system's "ideal" functional architecture (independent of the physical solution)

The two activities of functional and physical architectural design are intimately linked, since they involve finding or defining concrete components or existing or feasible subsystems that perform the required functions and carry the input/output flows of the functions.

The definition of these two architectures requires several iterations, as one reacts on the other and vice versa.

The design process is carried out recursively on the various levels of decomposition of the system into subsystems and terminal components ( cf. Complex Systems Engineering