A:

Business intelligence is not a well-defined term and is often interpreted differently depending on source or context. This makes digging through history to find its roots challenging. Hans Peter Luhn and Howard Dresner are normally credited with establishing modern business intelligence.

The first widely circulated use of the term "business intelligence" came from Richard Miller Devens' "Cyclopaedia of Commercial and Business Anecdotes" in 1865. The early technological use of business intelligence appeared in the 1950s.

Before Computers

Until the advent of computer software, most references to business intelligence described competitive intelligence, or legal spying. Very few people specialized in this form of business intelligence exclusively; most served some other business function. This is not what Devens' work described. He wrote about the work of a banker named Henry Furnese, who collected information faster and better than his competitors to turn a profit.

IBM and the Computer Age

Commercial computers hit markets in the United States in the 1950s. IBM researcher Hans Peter Luhn, a leading computer expert at the time, described business intelligence as "the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal."

Luhn's work helped create some of the foundational business analytics systems in early IBM systems. His 1958 IBM Journal article titled "Business Intelligence" laid the groundwork for analyzing and distributing documents according to business needs. Luhn is sometimes referred to as the father of business intelligence.

Modern Usage

Analyst Howard Dresner brought the term into common usage. By the late 1980s, it was clear that analyzing business information through computerized systems had a very bright future. Working for Future Gartner Group, Dresner offered that business intelligence included any "concepts and methods to improve business decision making by using fact-based support systems."

Starting in the late 2000s, analytics providers began using new terminology such as "business analytics" and "strategic intelligence." There are no universally agreed upon distinctions between these terms, but all operate under the larger umbrella of "big data."

RELATED FAQS
  1. What is the difference between business intelligence and competitive intelligence?

    Understand the difference between business intelligence and competitive intelligence. Learn why both are important for the ... Read Answer >>
  2. What are some common functions of business intelligence technologies?

    Understand the common functions of business intelligence technologies, and learn how business intelligence is used to increase ... Read Answer >>
  3. What is the difference between CI (competitive intelligence) and competitive analysis?

    Understand the difference between competitive intelligence and competitive analysis. Learn why a company conducts both types ... Read Answer >>
  4. What does a company use CI (competitive intelligence) for?

    Take a brief overview of the art of competitive intelligence, or CI, and how companies compete with one another for information ... Read Answer >>
  5. What types of data are mined for business intelligence?

    Learn about data mining and how businesses use data analysis in business intelligence to improve their operational efficiency ... Read Answer >>
  6. How difficult is it to understand business analytics?

    Find out what it takes to understand the method of business analytics, and how to start a career through one of its many ... Read Answer >>
Related Articles
  1. Personal Finance

    How Intelligence Relates To Wealth

    Being smart doesn't necessarily mean you'll be wealthy, but there are many ways intelligence can influence how much money you earn.
  2. Trading

    2 AI Stocks Set to Break Out to New Highs

    These two artificial intelligence stocks appear set to breakout to new highs.
  3. Investing

    Sharpen Your Portfolio With Intelligent ETFs

    Intelligent ETFs are innovative funds that pursue above-average returns and can be similar to actively managed mutual funds.
  4. Tech

    Investors Turn to Artificial Intelligence (GOOGL, FB)

    Since the Alan Turing developed the Turing Test, scientific researchers have worked to develop a computer with the ability to function like a human brain.
  5. Investing

    IBM's Strong Quarter Was Driven by the Cloud

    IBM (NYSE: IBM) has slowly been rebuilding its business by shifting away from its roots as computer maker toward a new model of selling cloud services and products powered by its Watson artificial ...
  6. Tech

    American Airlines Moves to IBM Cloud (AAL, IBM)

    IBM will host and work to modernize select American Airlines software.
  7. Tech

    Mastercard Dives Into Artificial Intelligence (MA)

    Faster transactions times that offer increased security to consumers remains a key aspect of Mastercard's many long-term growth initiatives.
  8. Investing

    IBM Stock: Analyzing 5 Key Customers (IBM)

    Find out how key IBM customers partner with the company to better their own revenues and help IBM grow into one of the largest companies in the United States.
  9. Tech

    IBM Expands Cloud Partnership

    The past few weeks have been tough on IBM (NYSE: IBM) shareholders. Since announcing second quarter results on July 20th, IBM shares have fallen nearly 10%. It is easy to see why investors were ...
  10. Investing

    IBM to Gain on Strong Tailwind from Weak USD: CFO

    After a blowout quarter, and spending much time and money, IBM's CFO is feeling confident again.
RELATED TERMS
  1. Artificial Intelligence - AI

    Artificial intelligence (AI) refers to simulated intelligence ...
  2. The Conference Board

    A not-for-profit research organization for businesses that distributes ...
  3. Business Plan

    A written document that describes in detail how a new business ...
  4. Prescriptive Analytics

    Prescriptive analytics is the use of technology to help businesses ...
  5. AI Winter

    AI winter refers to a period of time during which funding for ...
  6. Natural Language Processing (NLP)

    Natural Language Processing (NLP) is a field of Artificial Intelligence ...
Hot Definitions
  1. Whole Life Insurance Policy

    A life insurance contract with level premiums that has both an insurance and an investment component. The insurance component ...
  2. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  3. Capital Asset Pricing Model - CAPM

    A model that describes the relationship between risk and expected return and that is used in the pricing of risky securities. ...
  4. Internal Rate Of Return - IRR

    A metric used in capital budgeting measuring the profitability of potential investments.
  5. Current Ratio

    The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations.
  6. Return On Investment - ROI

    A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different ...
Trading Center