The process of breaking user stories down into a) smaller, more executable user stories or b) tasks. Likewise, epics may be decomposed into user stories, and tasks may be decomposed into more fine-grained tasks. Decomposition is usually performed during backlog grooming and iteration planning, and is an important precursor to story sizing (estimation). Decomposition may also occur throughout the development process. In the typical product backlog, user stories grown more fine grained as they near implementation, and are larger and less detailed the further down the queue they reside.
The term derives from the philosophy of mathematics, and systems science, where it is used to describe a form of analysis used to identify the functional parts of a system. Decomposition is also a common to software architecture parlance.