Why OLAP?

An effective OLAP solution solves problems for both business users and IT departments. For business users, it enables fast and intuitive access to centralized data and related calculations for the purposes of analysis and reporting. For IT, an OLAP solution enhances a data warehouse or other relational database with aggregate data and business calculations. In addition, by enabling business users to do their own analyses and reporting, OLAP systems reduce demands on IT resources.

OLAP offers five key benefits:

1) Business-focused multidimensional data

OLAP uses a multidimensional approach to organize and analyze data. In a multidimensional approach, data is organized into dimensions, where a dimension reflects how business users typically think of the business. For example, business users may view their data by product, by market, and over time. Each of these is a dimension in an OLAP application.

OLAP enables one to organize data in a multidimensional model that makes it easy for business users to understand the data and to use it in a business context, such as a budget.

2) Business-focused calculations

One reason OLAP systems are so fast is that they pre-aggregate values that would need to be computed on the fly in a traditional relational database system. The calculation engine handles aggregating data as well as business calculations. In an OLAP system, the analytic capabilities are independent from how the data is presented. The analytic calculations are centrally stored in the metadata for the system, not in each report.

Here are some examples of calculations available within an OLAP system:

• Aggregations, which simply roll up values based upon levels organized in hierarchies. For example, the application may roll up sales by week, month, quarter, and year.
• Time-series calculations with time intelligence, such as percent difference from last year, moving averages, and period-to-date values.

3) Trustworthy data and calculations

OLAP systems centralize data and calculations, ensuring a single source of data for all end users. Some OLAP systems centralize all data in a multidimensional database. Others centralize some data in a multidimensional database and link to data stored relationally. Still other OLAP systems are embedded in a data warehouse, storing data multidimensionally within the database itself. Regardless of the implementation details, what is important is that OLAP systems ensure end users have access to consistently defined data and calculations to support BI.

4) Speed-of-thought analysis

Speed-of thought analysis (also referred to as ad hoc analysis) means that analysts can pose queries and get immediate responses from the OLAP system. Not needing to wait for data means fewer interruptions in the analyst’s train of thought. The analyst can immediately pose another query based on the results of the first query, then another query, and so on, leading the analyst on a journey of discovery. Fast response times, together with intuitive, multidimensional organization of data, enable an analyst to think of and explore relationships that otherwise might be missed.

5) Flexible, self-service reporting

The best report designers and builders usually come from within the business community itself because they know what is needed. Enabling these people to create their own reports is a hallmark of an OLAP system.

OLAP systems enable business users to query data and create reports using tools that are natural for them to use. When business users can build their own reports, it reduces the reliance on IT resources for generating reports. Without an OLAP system, IT departments are often called upon to create a multitude of materialized views and specialized reports for business users on demand.