In a 1958 article, IBM researcher Hans Peter Luhn used the term business intelligence. He defined intelligence as: "the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal."
Business intelligence as it is understood today is said to have evolved from the decision support systems that began in the 1960s and developed throughout the mid-1980s. DSS originated in the computer-aided models created to assist with decision making and planning. From DSS, data warehouses, Executive Information Systems, OLAP and business intelligence came into focus beginning in the late 80s.
In 1989, Howard Dresner (later a Gartner Group analyst) proposed "business intelligence" as an umbrella term to describe "concepts and methods to improve business decision making by using fact-based support systems." It was not until the late 1990s that this usage was widespread.
BI Generation I (Interactive):
The first generation of BI was specifically about reporting. How to query and slice and dice data. Scorecards and dashboards illustrating KPIs first introduced themselves here. In this generation, this analysis of data was not real time. We were all excited that we could actually get access to this data, whic hwas ground breaking.
BI Generation II (Real Time):
Similar to Gen I, this generation introduced the capability of real-time analysis. It allowed organizations to see what was happening in their business as it was happening. This was great, however, most organizations were not prepared to correct issues coming out of the review of this data. It caused pains in other parts of the business and we were not able to take action on the BI with which we were being presented.
BI Generation III (Actionable):
Then came along BI Gen III. This made it possible for knowledge workers to review real time information and take action in real time during the process. This generation began to force process automation and it became evident in certain market spaces who was doing this and who was not. In some instances, this was required to emerge in your industry or outsmart the competition.
BI Generation IV & V (Simulation):
Gen IV allowed organizations to strategize and plan ahead for future transactions and business methods. With this technology you can run "what if" scenarios and make hypothetical decisions and analyze what its affects would be on your business.
BI Generation V is where we are today. We haven't been here long, but it does exist. Gen V takes strategic analysis and automation to the next level. BI Gen V can analyze your data automatically and make decisions for you and then implement them in real time.
The New BI:
The methods, requirements, and amount of BI we need to work with has exploded, leaving us with more options than we need for looking at our information. There are several trends happening in BI today, including Mobile, Social, Self Service, and Cloud.
The concept of "waiting until I get back to the office" is a thing of the past as users require access to data to make real time decisions wherever they are.
It is evident that the amount of data and the way we expect to work with data has changed and evolved over the years. There also has been some shifts in the vendors and products that are available to solve our BI challenges resulting from acquisitions and the emergence of specialty solutions.
Every organization should be working on or already have a BI strategy in place. The definition of this is subject to your interpretation and may vary depending on your industry. The important thing is that you have defined BI in your organization and understand where it can create a strategic advantage for you and allow your employees to work smarter.