31 January, 2022

Business Systems: A walk down history lane

By: Omar Abdul-Hafiz

In a previous article, we briefly discussed the history of how Data Analytics became as we know it today. We talked about how it began with Statistics, and how it evolved eventually and combined with advanced information technology, led to the birth of Data Science.

Not too far from it, in this article, we will discuss a related field: Business Systems! Ever wondered how they came to be what they are today?

Well, you are about to find out!


Bookkeeping: Way back in time

Make no mistake, money is a very essential element: No economy can survive, no business can thrive, and no prosperity can be achieved without proper management of it. Therefore, one of the most effective methods humans have invented for managing money is known as bookkeeping!

Historically, the actual origins of bookkeeping remain a mystery, save for a few quite strong theories that it had been in use since at least as far back as 2600 BC. According to a public domain version of Encyclopedia Britannica, 11th edition, traces of it were found “written with a stylus on small slabs of clay”. What is even more interesting is that these slabs also featured impressions from cylindrical seals. Each seal belonged to a specific person, and it was considered his/her natural “signature”. If this reveals anything, it may be an indication that the modern method of identifying people by their signature or fingerprints may have had its origins deep-rooted in ancient history.

Similarly, traces of bookkeeping were also found in ancient Egyptian history where papyrus was the main material used for keeping records. Furthermore, drawings were found that depicted “a scribe keeping account of the quantities of grain brought into and removed from the government store-houses”. Later on, with the invention of papers, people kept track of their business dealings using pen and paper for record keeping.


Journals, ledgers, and the double-entry method

One important milestone in the history of bookkeeping is the invention of journals and ledgers as official documents for recording financial information. As for their origins, most historical sources agree that Italian merchants are the first people to use them officially for recording their transactions. Most notably, the Italian mathematician Luca Pacioli (1447-1517) was credited as one of the earliest people to utilize ledgers as the main material for bookkeeping.

The principles of Pacioli remained in use through much of the centuries afterward with gradual improvements along the way. Businesses kept record of their transactions in this manner using pens and papers for hundreds of years. This remained the case, however, until the groundbreaking event occurred: the invention of the modern computer!


The computer: A phenomenal milestone

The invention of the computer was a very fantastic leap forward in the history of science and technology. Naturally, it did not take long for computers to play an incredibly key role in everyday life, especially in changing the ways people do business. This change culminated with the emergence of personal computers toward the 1970s which made this great technology even more convenient and widely accessible.

The complex, exhaustive, paper-intensive, and time-consuming tasks that people had to perform manually in the past are now being handled and completed in seconds by sophisticated computer systems. And instead of storing important documents in huge, dedicated rooms, people can now store all this information on a single computer, thus saving them ample space.

So how does that relate to business systems? In fact, computers are just the beginning. With the growing popularity of computers, businesses started using them for bookkeeping in place of pens and papers. This not only saved them the time and cost of maintaining their records manually but made it easier for them to share the needed information and control who can/cannot access it. Moreover, using computers for record keeping saved businesses the space required for housing data of previous years as well as easily backup important data to prevent data loss.

These amazing capabilities have therefore earned computers a cornerstone position in the world of business. Nowadays, for any business to survive the competition, it must utilize a certain degree of digitalization that suits its specific needs.

As businesses evolve, however, and with the widespread of computer databases, a new era of business information management began.


Business Information Systems

As information technology evolved through the years, its business applications started to get more and more sophisticated. We began to witness entire fully integrated systems that handle virtually all aspects of business. That includes, but is not limited to, data storage, processing, analysis, virtualization, decision support, and more! These systems fall under the big umbrella of the term Business Information systems, and their applications are countless.

In the Enterprise sector, for example, the applications of BIS range from accounting & financial management, supply chain, project management, and all the way to human resources management, among numerous others. This assortment of systems is most notably known as ERP (Enterprise Resource Planning) systems.


Sector-specific systems

Besides the world of ERP systems, the applications of information systems are countless. They cover specific functions in various sectors such as healthcare, education, insurance, and many more. In healthcare, for example, a Hospital Information System can digitally control all aspects of your hospital management duties. This includes everything from outpatient, inpatient, and medical staff management and all the way to managing your wards, beds, and operation rooms.

For more details on the various types of business systems, check out our article The difference between horizontal and vertical business systems.


This was a brief recap of how we got here in the domain of business information systems. These systems are still evolving, however. Today, new technologies in data analytics, AI, and machine learning are contributing to major business technology breakthroughs. Therefore, as technology advances, these essential business tools will become even more effective and further enhance the way we do business as they are already changing the way we live, interact, and go about our personal lives.

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