The three components or building blocks of an EDI system are standard messages, EDI enabling software and telecommunications. At this stage only a brief explanation about the principal functionalities or purpose of each component will be provided.

EDI and message standards have become inter-dependent as EDI has progressed from proprietary, closed systems to open systems. A simple analogy illustrating the need for message standards can be constructed by considering human communication and languages. We can imagine in the best case scenario a situation where an interpreter can facilitate communication between two people speaking two different languages, but what would happen if the number of people suddenly increases to 10 or 100? Without a common language the situation would rapidly become chaotic.

Returning to the analogy of human communication, the figure above illustrates that although interpretation or data conversion might be possible between two or more trading partners, the situation rapidly becomes unmanageable as the number of trading partners increases.

Computer communications and applications also need a common language in order to understand each other, and this common language is to be found in EDI message standards and most notably in UN/EDIFACT (United Nations Electronic Data Interchange For Administration, Commerce and Transport), the international EDI message standards and in UN/EDIFACT implementation guides such as EANCOM.

The basic functionality of EDI enabling software, usually known as the EDI converter, is that of translation of incoming messages from a message standard such as EDIFACT/EANCOM to a company's internal in-house file format and vice-versa for out-going messages.

However, in addition to the converter functionality, off-the-shelf EDI software packages will also contain additional functionalities which usually include conversion of multiple message standards and message versions, maintenance of trading partner profiles, application interfaces, a communications module to communicate directly or via one or more third party value added networks, management information on incoming and outgoing messages including audit trails, manual menu driven data- ! entry modules and security or access control by way of passwords

Once the data from an application has been converted from an in-house file format to a standard message format by means of the EDI software, the data must be communicated or physically transferred to the intended message recipient. Although it is possible to transfer the data on magnetic media such as tapes or diskettes, telecommunications is part of the EDI concept.

Returning to the analogy of human communication and languages, even if everybody in a group speaks the same language, if everybody would try to speak at once, the result would once again most probably be chaos. Data communications also require some form of discipline in order to achieve an orderly transfer of information and this is accomplished through communication protocols. In addition, there will be several possible telecommunication/network options which ; will carry the function of transfer medium for the data communications. Some of these options include point-to-point private leased line communications, use of the public telephone network or a public data or packet switched network or a third party value-added network service