A brief history of Business Intelligence

The term Business Intelligence or BI for short was first used by a scientist in the IBM group, Hans Peter Luhn, as far back as 1958. Luhn has since become known as the “Father of Business Intelligence.”

In his article “A Business Intelligence System”, Lund references Websters’ Dictionary definition of intelligence:

“the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal.”

He described it as:

“an automatic system…developed to disseminate information to the various sections of any industrial, scientific, or government organization.”

Big words, which essentially boil down to this:

BI is a way to for companies to quickly and easily understand huge amounts of information so that they can make the best possible decisions.

Years later, in 1989, Howard J. Dresner, a Gartner Group analyst, popularized the term. He described BI as:

“a set of concepts and methods to improve business decision making by using fact-based support systems.”

This concept highlights the importance of data analysis, reports and query tools that provide users with data, and help them to synthesize valuable and useful information. Today, almost 80% of companies in the U.S.A. and in 50% of companies in Europe use Business Intelligence.It is no longer an “extra” or a “nice to have”. It’s become a requirement for businesses to stay competitive, and even to remain afloat in a data-driven environment.BI tools are often designed with a very specific industry in mind. Insurance and investment make heavy use of it, as so do retailers, medical professionals and police.In fact, every sector has been touched by business intelligence.

The benefits are wide ranging, and include:

  • better quality information acquired for decision-making. Instead of relying on gut feel, the data is fact-based.Management has a detailed single view of all aspects of the business- financial data, production data, customer data. This informs decision-making.
  • improved ability to anticipate earlier the possible threats and opportunities as data gathering is a proactive and predictive approach to intelligence. It can help a company evaluate its own strength and weakness and compare them to competitors. It helps to identify trends with their customers, their products and in the competitive environment in general. Companies can more respond quickly to these trends, by for example, discontinuing unproductive products.
  • eliminating unnecessary costs or losses. Because all the information comes together as a single unified whole to give management one view of all the data, companies can see where the money is being spent and where there is duplication or wastefulness. There are large savings to be made from gathering and analyzing the data.

 

Business intelligence has come a long way since its humble beginnings in the 1950s. As the technological revolution continues, it will become even more sophisticated, helping businesses and others to understand the complexities of their interactions with humans, products, the market and the environment.

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