What happens during the 'Design' stage of software development?

During the 'Design' stage of software development, the focus is on structuring the system so that it can be efficiently developed and maintained. This involves breaking down the overall system into smaller, manageable parts or modules. By decomposing the system this way, developers can tackle individual components one at a time, which promotes better organization, clarity, and modularity in coding.

This approach also facilitates easier debugging, maintenance, and future updates since changes can often be made to a single module without needing to adjust the entire system. Additionally, the design stage will often include defining the architecture, interfaces, and data flow between these modules, ensuring that all parts work together seamlessly when assembled.

The other options pertain to different stages of the software development lifecycle. Final testing, budget updates, and collecting end-user feedback occur in later phases rather than during the design phase. Therefore, the correct answer truly reflects the core activities that happen while designing a software system.