What is OLAP (Online Analytical

Processing)?
OLAP stands for On-Line Analytical Processing. OLAP is a
classification of software technology which authorizes analysts,
managers, and executives to gain insight into information through fast,
consistent, interactive access in a wide variety of possible views of
data that has been transformed from raw information to reflect the real
dimensionality of the enterprise as understood by the clients.
OLAP implement the multidimensional analysis of business
information and support the capability for complex estimations, trend
analysis, and sophisticated data modeling. It is rapidly enhancing the
essential foundation for Intelligent Solutions containing Business
Performance Management, Planning, Budgeting, Forecasting,
Financial Documenting, Analysis, Simulation-Models, Knowledge
Discovery, and Data Warehouses Reporting. OLAP enables end-
clients to perform ad hoc analysis of record in multiple dimensions,
providing the insight and understanding they require for better
decision making.

Who uses OLAP and Why?

OLAP applications are used by a variety of the functions of an
organization.
Finance and accounting:
o Budgeting
o Activity-based costing
o Financial performance analysis
o And financial modeling
Sales and Marketing
 o Sales analysis and forecasting
o Market research analysis
o Promotion analysis
o Customer analysis
o Market and customer segmentation
Production
o Production planning
o Defect analysis
OLAP cubes have two main purposes. The first is to provide business
users with a data model more intuitive to them than a tabular model.
This model is called a Dimensional Model.
The second purpose is to enable fast query response that is usually
difficult to achieve using tabular models.

How OLAP Works?

Fundamentally, OLAP has a very simple concept. It pre-calculates
most of the queries that are typically very hard to execute over tabular
databases, namely aggregation, joining, and grouping. These queries
are calculated during a process that is usually called 'building' or
'processing' of the OLAP cube. This process happens overnight, and
by the time end users get to work - data will have been updated.

OLAP Guidelines (Dr.E.F.Codd Rule)

Dr E.F. Codd, the "father" of the relational model, has formulated a
list of 12 guidelines and requirements as the basis for selecting OLAP
systems:
1) Multidimensional Conceptual View: This is the central features
of an OLAP system. By needing a multidimensional view, it is possible
to carry out methods like slice and dice.
2) Transparency: Make the technology, underlying information
repository, computing operations, and the dissimilar nature of source
data totally transparent to users. Such transparency helps to improve
the efficiency and productivity of the users.
3) Accessibility: It provides access only to the data that is actually
required to perform the particular analysis, present a single, coherent,
and consistent view to the clients. The OLAP system must map its own
logical schema to the heterogeneous physical data stores and perform
any necessary transformations. The OLAP operations should be sitting
between data sources (e.g., data warehouses) and an OLAP front-end.
4) Consistent Reporting Performance: To make sure that the users
do not feel any significant degradation in documenting performance as
the number of dimensions or the size of the database increases. That
is, the performance of OLAP should not suffer as the number of
dimensions is increased. Users must observe consistent run time,
response time, or machine utilization every time a given query is run.
5) Client/Server Architecture: Make the server component of OLAP
tools sufficiently intelligent that the various clients to be attached with
a minimum of effort and integration programming. The server should
be capable of mapping and consolidating data between dissimilar
databases.
6) Generic Dimensionality: An OLAP method should treat each
dimension as equivalent in both is structure and operational
capabilities. Additional operational capabilities may be allowed to
selected dimensions, but such additional tasks should be grantable to
any dimension.
7) Dynamic Sparse Matrix Handling: To adapt the physical schema
to the specific analytical model being created and loaded that
optimizes sparse matrix handling. When encountering the sparse
matrix, the system must be easy to dynamically assume the distribution
of the information and adjust the storage and access to obtain and
maintain a consistent level of performance.
8) Multiuser Support: OLAP tools must provide concurrent data
access, data integrity, and access security.
9) Unrestricted cross-dimensional Operations: It provides the
ability for the methods to identify dimensional order and necessarily
functions roll-up and drill-down methods within a dimension or across
the dimension.
10) Intuitive Data Manipulation: Data Manipulation fundamental
the consolidation direction like as reorientation (pivoting), drill-down
and roll-up, and another manipulation to be accomplished naturally
and precisely via point-and-click and drag and drop methods on the
cells of the scientific model. It avoids the use of a menu or multiple
trips to a user interface.
11) Flexible Reporting: It implements efficiency to the business
clients to organize columns, rows, and cells in a manner that facilitates
simple manipulation, analysis, and synthesis of data.
12) Unlimited Dimensions and Aggregation Levels: The number of
data dimensions should be unlimited. Each of these common
dimensions must allow a practically unlimited number of customer-
defined aggregation levels within any given consolidation path.

Characteristics of OLAP
In the FASMI characteristics of OLAP methods, the term derived
from the first letters of the characteristics are:
Fast
It defines which the system targeted to deliver the most feedback to
the client within about five seconds, with the elementary analysis
taking no more than one second and very few taking more than 20
seconds.

Analysis
It defines which the method can cope with any business logic and
statistical analysis that is relevant for the function and the user, keep it
easy enough for the target client. Although some preprogramming may
be needed we do not think it acceptable if all application definitions
have to be allow the user to define new Adhoc calculations as part of
the analysis and to document on the data in any desired method,
without having to program so we excludes products (like Oracle
Discoverer) that do not allow the user to define new Adhoc calculation
as part of the analysis and to document on the data in any desired
product that do not allow adequate end user-oriented calculation
flexibility.

Share
It defines which the system tools all the security requirements for
understanding and, if multiple write connection is needed, concurrent
update location at an appropriated level, not all functions need
customer to write data back, but for the increasing number which does,
the system should be able to manage multiple updates in a timely,
secure manner.

Multidimensional
This is the basic requirement. OLAP system must provide a
multidimensional conceptual view of the data, including full support
for hierarchies, as this is certainly the most logical method to analyze
business and organizations.
Information
The system should be able to hold all the data needed by the
applications. Data sparsity should be handled in an efficient manner.
The main characteristics of OLAP are as follows:
1. Multidimensional conceptual view: OLAP systems let business
users have a dimensional and logical view of the data in the data
warehouse. It helps in carrying slice and dice operations.
2. Multi-User Support: Since the OLAP techniques are shared, the
OLAP operation should provide normal database operations,
containing retrieval, update, adequacy control, integrity, and
security.
3. Accessibility: OLAP acts as a mediator between data warehouses
and front-end. The OLAP operations should be sitting between
data sources (e.g., data warehouses) and an OLAP front-end.
4. Storing OLAP results: OLAP results are kept separate from data
sources.
5. Uniform documenting performance: Increasing the number of
dimensions or database size should not significantly degrade the
reporting performance of the OLAP system.
6. OLAP provides for distinguishing between zero values and
missing values so that aggregates are computed correctly.
7. OLAP system should ignore all missing values and compute
correct aggregate values.
8. OLAP facilitate interactive query and complex analysis for the
users.
9. OLAP allows users to drill down for greater details or roll up for
aggregations of metrics along a single business dimension or
across multiple dimension.
10. OLAP provides the ability to perform intricate calculations
and comparisons.
 11. OLAP presents results in a number of meaningful ways,
including charts and graphs.

Benefits of OLAP
OLAP holds several benefits for businesses: -
1. OLAP helps managers in decision-making through the
multidimensional record views that it is efficient in providing,
thus increasing their productivity.
2. OLAP functions are self-sufficient owing to the inherent
flexibility support to the organized databases.
3. It facilitates simulation of business models and problems, through
extensive management of analysis-capabilities.
4. In conjunction with data warehouse, OLAP can be used to support
a reduction in the application backlog, faster data retrieval, and
reduction in query drag.

Motivations for using OLAP

1) Understanding and improving sales: For enterprises that have
much products and benefit a number of channels for selling the
product, OLAP can help in finding the most suitable products and the
most famous channels. In some methods, it may be feasible to find the
most profitable users. For example, considering the
telecommunication industry and considering only one product,
communication minutes, there is a high amount of record if a company
want to analyze the sales of products for every hour of the day (24
hours), difference between weekdays and weekends (2 values) and
split regions to which calls are made into 50 region.
2) Understanding and decreasing costs of doing
business: Improving sales is one method of improving a business, the
other method is to analyze cost and to control them as much as suitable
without affecting sales. OLAP can assist in analyzing the costs related
to sales. In some methods, it may also be feasible to identify
expenditures which produce a high return on investments (ROI). For
example, recruiting a top salesperson may contain high costs, but the
revenue generated by the salesperson may justify the investment.

Difference between OLTP and OLAP

OLTP (On-Line Transaction Processing) is featured by a large
number of short on-line transactions (INSERT, UPDATE, and
DELETE). The primary significance of OLTP operations is put on
very rapid query processing, maintaining record integrity in multi-
access environments, and effectiveness consistent by the number of
transactions per second. In the OLTP database, there is an accurate and
current record, and schema used to save transactional database is the
entity model (usually 3NF).
OLAP (On-line Analytical Processing) is represented by a relatively
low volume of transactions. Queries are very difficult and involve
aggregations. For OLAP operations, response time is an effectiveness
measure. OLAP applications are generally used by Data Mining
techniques. In OLAP database there is aggregated, historical
information, stored in multi-dimensional schemas (generally star
schema).
Following are the difference between OLAP and OLTP system.
1) Users: OLTP systems are designed for office worker while the
OLAP systems are designed for decision-makers. Therefore while an
OLTP method may be accessed by hundreds or even thousands of
clients in a huge enterprise, an OLAP system is suitable to be accessed
only by a select class of manager and may be used only by dozens of
users.
2) Functions: OLTP systems are mission-critical. They provide day-
to-day operations of an enterprise and are largely performance and
availability driven. These operations carry out simple repetitive
operations. OLAP systems are management-critical to support the
decision of enterprise support tasks using detailed investigation.
3) Nature: Although SQL queries return a set of data, OLTP methods
are designed to step one record at the time, for example, a data related
to the user who may be on the phone or in the store. OLAP system is
not designed to deal with individual customer records. Instead, they
include queries that deal with many data at a time and provide
summary or aggregate information to a manager. OLAP applications
include data stored in a data warehouses that have been extracted from
many tables and possibly from more than one enterprise database.
4) Design: OLTP database operations are designed to be application-
oriented while OLAP operations are designed to be subject-oriented.
OLTP systems view the enterprise record as a collection of tables
(possibly based on an entity-relationship model). OLAP operations
view enterprise information as multidimensional).
5) Data: OLTP systems usually deal only with the current status of
data. For example, a record about an employee who left three years
ago may not be feasible on the Human Resources System. The old data
may have been achieved on some type of stable storage media and may
not be accessible online. On the other hand, OLAP systems needed
historical data over several years since trends are often essential in
decision making.
6) Kind of use: OLTP methods are used for reading and writing
operations while OLAP methods usually do not update the data.
7) View: An OLTP system focuses primarily on the current data
within an enterprise or department, which does not refer to historical
data or data in various organizations. In contrast, an OLAP system
spans multiple version of a database schema, due to the evolutionary
process of an organization. OLAP system also deals with information
that originates from different organizations, integrating information
from many data stores. Because of their huge volume, these are stored
on multiple storage media.
8) Access Patterns: The access pattern of an OLTP system consist
primarily of short, atomic transactions. Such a system needed
concurrency control and recovery techniques. However, access to
OLAP systems is mostly read-only operations because these data
warehouses store historical information.
The biggest difference between an OLTP and OLAP system is the
amount of data analyzed in a single transaction. Whereas an
OLTP handles many concurrent customers and queries touching
only a single data or limited collection of records at a time, an
OLAP system must have the efficiency to operate on millions of
data to answer a single query.