B-Dienst
While Britain had a well-organized cryptography department, and the U.S. an adequate one, Germany relied upon a number of small offices and departments scattered throughout the Nazi government to decrypt Allied messages. The most effective of these was B-Dienst. B-Dienst was responsible for naval intelligence, including cryptography.
B-Dienst had been established well before World War II. During World War I, naval staff in Berlin realized that, by using monitoring stations in Belgium and France, they could monitor naval transmissions. The Observation Service or Beobachtungsdienst, was formed. Between the wars, the office was poorly staffed, with few resources, but that changed in 1934. By 1935, B-Dienst was decoding Royal Navy and merchant ship transmissions. It grew rapidly during the War, and eventually had more than 6,000 workers intercepting, decoding and translating naval codes.
By 1941, B-Dienst was also deciphering U.S. Navy codes. Decoding the movements of U.S. and British ships provided a distinct advantage to German U-boats early in the War. B-Dienst was particularly critical to the effectiveness of Operation Drumbeat in early 1942, when German U-boats attacked vessels off the East Coast of North America. In 1942, the U.S. changed their naval codes, reducing the success of B-Dienst.
By 1943, some 80 percent of Allied naval transmissions were being decoded by B-Dienst; however, they were rarely decoded in time to act on the information. Only 10 percent of the messages read were decoded in time to be of use. This limited the overall benefit of the intelligence to the British. By late 1943, Allied forces had changed their codes, limiting the ability of B-Dienst to successfully decode coded naval messages.
During interrogations at the end of the War, German officials credited B-Dienst with providing half of the intelligence used during the War by German troops. While intelligence was essential to the Allied victory in the War, the Germans had consistently less access to decoded messages, in large part due to the lack of a central agency to manage intelligence activities.