Contrary to popular belief, business intelligence wasn’t invented in the 21st century as a way for companies to make sense of their repositories of Big Data. In fact, the practice and the term itself first appeared around the end of the Civil War. Ultimately, BI isn’t the same thing as data analytics or any other technology buzzword of the past decade.
To offer a sense of historical perspective, as well as a few insights to help your organization’s current BI initiatives, here is a look at the last 150 years or so of business intelligence. Leverage these insights to better understand this important business function.
The Origins of Business Intelligence
The term “business intelligence” first appeared in the 1865 book, The Cyclopaedia of Commercial and Business Anecdotes, by Richard Miller Devens. A banker known as Sir Henry Furnese collected hoards of information on the current market and customers, allowing him to make better informed business decisions. Sound familiar?
Sir Henry kept his bank ahead of its competition through the inspired use of business intelligence as opposed to only relying on instinct. His success happened without computers, databases, the Cloud or data analytics powered by machine learning algorithms. Devens’ tome also provides other examples of this nascent BI approach beyond Furnese’s analytical banking work.
Ultimately, this provides another example of how business drives technology and not necessarily the other way around.
IBM Takes BI Digital in the 1950s
Flash forward nearly 100 years to the invention of the hard disk by IBM, which provided 5MB of storage in a device weighing over a ton. Over time, business intelligence gradually enjoyed the advantages of digital storage compared to paper-driven methods. Later on in the 50s, Big Blue scientist, Hans Peter Luhn, authored the important paper, “A Business Intelligence System,” which served as a progenitor for modern BI.
The 60s saw computers and databases begin to make significant impacts in the business world. Still, as a massive amount of Big Data was generated, organizations encountered difficulty in deriving actionable information from it.
As such, BI vendors like SAP first appeared in the following decade. With data warehouses being introduced in the 1980s, BI applications and reporting tools, like Crystal Reports, became commonplace. As business intelligence continues to mature, expect AI-powered data analytics to continue its significant impact on the practice. Sir Henry Furnese would be amazed.
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