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The first concordance was undertaken under the direction of Hugh of Saint-Cher and completed in the early 13th century.
Hugh was a member of the catholic Dominican Order, whose founding goals were to preach the gospel and fight heresy. This order was known for its intellectualism; the influential St. Thomas Aquinas was a member of it. While prior to the Dominicans heresy was fought and the gospel was preached in Catholicism, friars were generally expected to stay home. The Dominicans, however, took a more open and intellectual approach to fighting heresy by traveling and establishing missions, and by preaching the gospel through appealing to the Bible. This clearly gave rise to a need for better tools to study and understand the Bible.
It is for this reason that the order, and Hugh in particular, is credited not only for creating the first concordance of the Bible, but also for creating the first "correctorium", or a collection of various readings and commentary of the Bible. As a result of carelessness or mistakes on the part of scholars who would insert, change, or omit passages of the Bible when transcribing, including adding commentary, there was a great need for a comprehensive work to understand the original meaning of the Biblical text. Thus, the correctorium was created. It even included excerpts of the original Greek.
Hugh is often miscredited for producing the modern division of chapters and verses in the Bible. Chapters had already been established at the time. Verses had not, however Hugh in his concordance used a system in which the chapters were divided into roughly 7 equal parts and the part of the chapter was indicated in the concordance. The basis of the concordance was the Latin Vulgate.
For more information on all of these topics (Mostly from the Catholic Encyclopedia), see:
http://www.newadvent.org/cathen/04195a.htm
http://en.wikipedia.org/wiki/Bible_concordance