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Software systems, unless they are thoroughly understood, can be like an ice berg. They are becoming more and more difficult to understand. Improvement of coding tools allows software developers to produce large amounts of software to meet an ever expanding need from users. As systems grow a method to understand and communicate size needs to be used. Function Point Analysis is a structured technique of problem solving. It is a method to break systems into smaller components, so they can be better understood and analyzed.
Function points are a unit measure for software much like an hour is to measuring time, miles are to measuring distance or Celsius is to measuring temperature. Function Points are an ordinal measure much like other measures such as kilometers, Fahrenheit, hours, so on and so forth.
The Five Major Components
Since it is common for computer systems to interact with other computer systems, a boundary must be drawn around each system to be measured prior to classifying components. This boundary must be drawn according to the user’s point of view. In short, the boundary indicates the border between the project or application being measured and the external applications or user domain. Once the border has been established, components can be classified, ranked and tallied.
External Inputs (EI) - is an elementary process in which data crosses the boundary from outside to inside. This data may come from a data input screen or another application. The data may be used to maintain one or more internal logical files. The data can be either control information or business information. If the data is control information it does not have to update an internal logical file. The graphic represents a simple EI that updates2 ILF's (FTR's).

External Outputs (EO) - an elementary process in which derived data passes across the boundary from inside to outside. Additionally, an EO may update an ILF. The data creates reports or output files sent to other applications. These reports and files are created from one or more internal logical files and external interface file. The following graphic represents on EO with2 FTR's there is derived information (green) that has been derived from the ILF's

External Inquiry (EQ) - an elementary process with both input and output components that result in data retrieval from one or more internal logical files and external interface files. The input process does not update any Internal Logical Files, and the output side does not contain derived data. The graphic below represents an EQ with two ILF's and no derived data.

Internal Logical Files (ILF’s) - a user identifiable group of logically related data that resides entirely within the applications boundary and is maintained through external inputs.
External Interface Files (EIF’s) - a user identifiable group of logically related data that is used for reference purposes only. The data resides entirely outside the application and is maintained by another application. The external interface file is an internal logical file for another application.