On-line Analytical Processing (OLAP)

Published on Nov 21, 2015

Abstract
The term On-Line Analytical Processing (OLAP) was coined by E.F. Codd in 1993 to
refer to a type of application that allows a user to interactively analyze data. An
OLAP system is often contrasted to an OLTP (On-Line Transaction Processing) system
that focuses on processing transaction such as orders, invoices or general ledger
transactions. Before the term OLAP was, coined, these systems were often referred
to as Decision Support Systems.
OLAP is now acknowledged as a key technology for successful management in the
90's.It describes a class of applications that require multidimensional analysis of
business data.
OLAP systems enable managers and analysts to rapidly and easily examine key
performance data and perform powerful comparison and trend analyses, even on
very large data volumes. They can be used in a wide variety of business areas,
including sales and marketing analysis, financial reporting, quality tracking,
profitability analysis, manpower and pricing applications, and many others.
OLAP technology is being used in an increasingly wide range of applications. The
most common are sales and marketing analysis; financial reporting and
consolidation; and budgeting and planning. Increasingly, however OLAP is being
used for applications such as product profitability and pricing analysis; activity
based costing, manpower planning; quality analysis, in fact for any management
system that requires a flexible, top down view of an organization.
Online Analytical Processing (OLAP) is a method of analyzing data in a
multidimensional format, often across multiple time periods, with the aim of
uncovering the business information concealed within the data'- OLAP enables
business users to gain an insight into the business through interactive analysis of
different views of the business data that have been built up from the operational
systems. This approach facilitates a more intuitive and meaningful analysis of
business information and assists in identifying important business trends.
OLAP is often confused with Data Warehousing. OLAP is not a data warehousing,
methodology, however it is an integral part of a data warehousing solution. OLAP
comes in many different shades, depending on the underlying database structure
and the location of the majority of the analytical processing. Thus, the term OLAP
has different meanings depending on the specific combination of these variables.

This white paper examines the different options to support OLAP. It examines the
strengths and weaknesses of each and recommends the analytical tasks for which
each is most suitable.
OLAP provides the facility to analyze I the data held within the data warehouse in a
flexible manner. It is an integral component of a successful data warehouse
solution; it is not in itself a data warehousing methodology or system. However, the
term OLAP has different meanings for different people, as there are many variants
of OLAP. This article attempts to put the different OLAP scenarios into context.
OLAP can be defined as the process of converting raw data into business
information through multi-dimensional analysis. This enables analysts to identify
business strengths and weaknesses, business trends and the underlying causes of
these trends. It provides an insight into the business through the interactive
analysis of different views of business information that have been built up from raw
operating data which reflect the business users understanding of the business.