The premises of Business Intelligence:
The first words “Business Intelligence” were pronounced in 1865 by Richard Devens in the book Cyclopædia of Commercial and Business Anecdotes Volume 1.
In this book, Richard Devens uses it to describe the way that a banker, Sir Henry Furnese, succeeded: he had an understanding of political issues, instabilities, and the market before his competitors.
“Throughout Holland, Flanders, France, and Germany, he maintained a complete and perfect train of business intelligence.”
Business Intelligence was used in World War II
The Allies used cryptography during World War II, this is a great example of the tools and principles of business intelligence applied in a very different setting.
The Allies had to collect large amounts of German communications, examine those encrypted communications for trends, and then find the useful information within those trends.
Their constant activity eventually resulted in them cracking the Germans’ infamous “Enigma” cipher over and over again, leading to intelligence advantages for the Allies.
The next big step in the business intelligence history came with the development of the hard disk drive. Invented by IBM in 1956, hard drives as they are known today, allowed for storage of vast amounts of data.
This technical innovation served as the foundation for business intelligence. Without a digital representation of data, it is difficult to use BI tools. IBM would continue to lead the way in the history of business intelligence.
In 1958, just after World War II, an article was written by an IBM computer scientist named Hans Peter Luhn, describing the possibility of gathering Business Intelligence (BI) through the use of technology. Business intelligence, as it is understood today, uses technology to collect and analyze data, convert it into useful information. The modern version of BI focuses on technology to make decisions faster with efficiency, based on the right information at the right time.
What is very interesting is that Hans Peter Luhn predicted the ability of information systems to learn based on user interests. This is what we now call Machine Learning. Machine Learning is not something new, it was predicted in the 1950s by an IBM Computer Scientist!
In the 1970s…
Big names like SAP started to use business intelligence for massive corporate clients. They assisted companies in putting their data into databases, and creating reports based on these data.
In the 1980s…
The 1980s is known as the period where big data saw some huge changes.
People like Bill Inmon (“The Father of Data Warehousing”) and Ralph Kimball showed the way towards organizing data into data warehouses that could be used to access and manage data in one unique place. But they required an (expensive) IT staff that should be dedicated to a business intelligence tool in order to run reports. A normal user was not able to use this technology.
Furthermore, due to the the processing limitations of computers at the time, reports would often take quite a long time to execute. This could make them irrelevant by the time they were finished depending on the nature of the request.
Despite business intelligence having come a long way, it still had a long way to go.
Business Intelligence Applied – Green Bar Reports
During the 1980s, an earlier applied form of business intelligence was used – called green bar reports. These reports were used for taking inventory of stock items, listing assets or doing payroll.
These reports were a function of a new BI Technology – decision support systems (DSS).
Decision support systems were information storage and management systems that gave you reports for defined Key Performance Indicators (KPIs), as well as the possibility to create custom reports for new queries.