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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.
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.

Data Cube or OLAP approach in Data Mining

• Difficulty Level : Medium
• Last Updated : 01 Aug, 2021

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Grouping of data in a multidimensional matrix is called data cubes. In Dataware housing, we generally deal with various multidimensional data
models as the data will be represented by multiple dimensions and multiple attributes. This multidimensional data is represented in the data cube
as the cube represents a high-dimensional space. The Data cube pictorially shows how different attributes of data are arranged in the data model.
Below is the diagram of a general data cube.

The example above is a 3D cube having attributes like branch(A,B,C,D),item type(home,entertainment,computer,phone,security),

year(1997,1998,1999) .

Data cube classification:

The data cube can be classified into two categories:

• Multidimensional data cube: It basically helps in storing large amounts of data by making use of a multi-dimensional array. It increases its
efficiency by keeping an index of each dimension. Thus, dimensional is able to retrieve data fast.
• Relational data cube: It basically helps in storing large amounts of data by making use of relational tables. Each relational table displays the
dimensions of the data cube. It is slower compared to a Multidimensional Data Cube.

Data cube operations:

 Data cube operations are used to manipulate data to meet the needs of users. These operations help to select particular data for the analysis
purpose. There are mainly 5 operations listed below-

• Roll-up: operation and aggregate certain similar data attributes having the same dimension together. For example, if the data cube displays the
daily income of a customer, we can use a roll-up operation to find the monthly income of his salary.

• Drill-down: this operation is the reverse of the roll-up operation. It allows us to take particular information and then subdivide it further for
coarser granularity analysis. It zooms into more detail. For example- if India is an attribute of a country column and we wish to see villages in
India, then the drill-down operation splits India into states, districts, towns, cities, villages and then displays the required information.

• Slicing: this operation filters the unnecessary portions. Suppose in a particular dimension, the user doesn’t need everything for analysis, rather
a particular attribute. For example, country=”jamaica”, this will display only about jamaica and only display other countries present on the
country list.

• Dicing: this operation does a multidimensional cutting, that not only cuts only one dimension but also can go to another dimension and cut a
certain range of it. As a result, it looks more like a subcube out of the whole cube(as depicted in the figure). For example- the user wants to
see the annual salary of Jharkhand state employees.

• Pivot: this operation is very important from a viewing point of view. It basically transforms the data cube in terms of view. It doesn’t change
the data present in the data cube. For example, if the user is comparing year versus branch, using the pivot operation, the user can change the
viewpoint and now compare branch versus item type.

Advantages of data cubes:

• Helps in giving a summarised view of data.

• Data cubes store large data in a simple way.
• Data cube operation provides quick and better analysis,
• Improve performance of data.
OLAP Guidelines (Codd’s Rule)
• Last Updated : 19 Aug, 2021

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On-line Analytical Processing (OLAP) is a category of software technology that enables analytics, managers and executives to gain insight into
data through fast, consistent, interactive access in a wide variety of information that has been transformed from the raw data to reflect the real
dimensionality of the enterprise as understood by the user.
OLAP was introduced by Dr.E.F.Codd in 1993 and he presented 12 rules regarding OLAP:
1. Multidimensional Conceptual View:
Multidimensional data model is provided that is intuitively analytical and easy to use. A multidimensional data model decides how the users
perceive business problems.

2. Transparency:
It makes the technology, underlying data repository, computing architecture, and the diverse nature of source data totally transparent to users.

3. Accessibility:
Access should provided only to the data that is actually needed to perform the specific analysis, presenting a single, coherent and consistent
view to the users.

4. Consistent Reporting Performance:

Users should not experience any significant degradation in reporting performance as the number of dimensions or the size of the database
increases. It also ensures users must perceive consistent run time, response time or machine utilization every time a given query is run.

5. Client/Server Architecture:
It conforms the system to the principles of client/server architecture for optimum performance, flexibility, adaptability, and interoperability.

6. Generic Dimensionality:
It should be ensured that very data dimension is equivalent in both structure and operational capabilities. Have one logical structure for all
dimensions.

7. Dynamic Sparse Matrix Handling:

Adaption should be of the physical schema to the specific analytical model being created and loaded that optimizes sparse matrix handling.

8. Multi-user Support:
Support should be provided for end users to work concurrently with either the same analytical model or to create different models from the
 same data.

9. Unrestricted Cross-dimensional Operations:

System should have abilities to recognize dimensional and automatically perform roll-up and drill-down operations within a dimension or
across dimensions.

10. Intuitive Data Manipulation:

Consolidation path reorientation, drill-down, and roll-up and other manipulations to be accomplished intuitively should be enabled and
directly via point and click actions.

11. Flexible Reporting:

Business user is provided capabilities to arrange columns, rows, and cells in manner that gives the facility of easy manipulation, analysis and
synthesis of information.

12. Unlimited Dimensions and Aggregation Levels:

There should be at least fifteen or twenty data dimensions within a common analytical model.

Difference between OLAP and OLTP in DBMS

• Difficulty Level : Medium
• Last Updated : 15 Nov, 2022

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Online Analytical Processing (OLAP): Online Analytical Processing consists of a type of software tools that are used for data analysis for
business decisions. OLAP provides an environment to get insights from the database retrieved from multiple database systems at one
time. Examples – Any type of Data warehouse system is an OLAP system. The uses of OLAP are as follows:
• Spotify analyzed songs by users to come up with a personalized homepage of their songs and playlist.
• Netflix movie recommendation system.
Online transaction processing (OLTP): Online transaction processing provides transaction-oriented applications in a 3-tier architecture. OLTP
administers the day-to-day transactions of an organization.
Examples: Uses of OLTP are as follows:
• ATM center is an OLTP application.
• OLTP handles the ACID properties during data transactions via the application.
• It’s also used for Online banking, Online airline ticket booking, sending a text message, add a book to the shopping cart.

Comparisons of OLAP vs OLTP :

 Sr. OLAP (Online analytical OLTP (Online transaction
No. Category processing) processing)
It is well-known as an online
database query management It is well-known as an online
1. Definition system. database modifying system.

Consists of historical data from Consists of only of operational

2. Data source various Databases. current data.

It makes use of a standard database

3. Method used It makes use of a data warehouse. management system (DBMS).

It is subject-oriented. Used for

Data Mining, Analytics, It is application-oriented. Used for
4. Application Decisions making, etc. business tasks.

In an OLAP database, tables are In an OLTP database, tables are

5. Normalized not normalized. normalized (3NF).

The data is used in planning,

problem-solving, and decision- The data is used to perform day-to-
6. Usage of data making. day fundamental operations.

It provides a multi-dimensional It reveals a snapshot of present

7. Task view of different business tasks. business tasks.

It serves the purpose to extract It serves the purpose to Insert,

information for analysis and Update, and Delete information from
8. Purpose decision-making. the database.

The size of the data is relatively

A large amount of data is stored small as the historical data is
9. Volume of data typically in TB, PB archived. For ex MB, GB

Relatively slow as the amount of

data involved is large. Queries Very Fast as the queries operate on
10. Queries may take hours. 5% of the data.

The OLAP database is not often

updated. As a result, data The data integrity constraint must be
11. Update integrity is unaffected. maintained in an OLTP database.

It only need backup from time to Backup and recovery process is

Backup and
12. Recovery time as compared to OLTP. maintained rigorously
 Sr. OLAP (Online analytical OLTP (Online transaction
No. Category processing) processing)
It is comparatively fast in processing
The processing of complex because of simple and
13. Processing time queries can take a lengthy time. straightforward queries.

This data is generally managed This data is managed by clerks,

14. Types of users by CEO, MD, GM. managers.

Only read and rarely write

15. Operations operation. Both read and write operations.

With lengthy, scheduled batch

operations, data is refreshed on a The user initiates data updates,
16. Updates regular basis. which are brief and quick.

Process that is focused on the Process that is focused on the

17. Nature of audience customer. market.

Design with a focus on the Design that is focused on the

18. Database Design subject. application.

Improves the efficiency of

19. Productivity business analysts. Enhances the user’s productivity.

OLAP Servers
• Last Updated : 26 Jul, 2021

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Online Analytical Processing(OLAP) refers to a set of software tools used for data analysis in order to make business decisions. OLAP provides a
platform for gaining insights from databases retrieved from multiple database systems at the same time. It is based on a multidimensional data
model, which enables users to extract and view data from various perspectives. A multidimensional database is used to store OLAP data. Many
Business Intelligence (BI) applications rely on OLAP technology.
Type of OLAP servers:
The three major types of OLAP servers are as follows:

• ROLAP
• MOLAP
• HOLAP
Relational OLAP (ROLAP):
Relational On-Line Analytical Processing (ROLAP) is primarily used for data stored in a relational database, where both the base data and
dimension tables are stored as relational tables. ROLAP servers are used to bridge the gap between the relational back-end server and the client’s
front-end tools. ROLAP servers store and manage warehouse data using RDBMS, and OLAP middleware fills in the gaps.
Benefits:
• It is compatible with data warehouses and OLTP systems.
• The data size limitation of ROLAP technology is determined by the underlying RDBMS. As a result, ROLAP does not limit the amount of
data that can be stored.
Limitations:
• SQL functionality is constrained.
• It’s difficult to keep aggregate tables up to date.

Multidimensional OLAP (MOLAP):

Through array-based multidimensional storage engines, Multidimensional On-Line Analytical Processing (MOLAP) supports multidimensional
views of data. Storage utilization in multidimensional data stores may be low if the data set is sparse.
MOLAP stores data on discs in the form of a specialized multidimensional array structure. It is used for OLAP, which is based on the arrays’
random access capability. Dimension instances determine array elements, and the data or measured value associated with each cell is typically
stored in the corresponding array element. The multidimensional array is typically stored in MOLAP in a linear allocation based on nested
traversal of the axes in some predetermined order.
However, unlike ROLAP, which stores only records with non-zero facts, all array elements are defined in MOLAP, and as a result, the arrays
tend to be sparse, with empty elements occupying a larger portion of them. MOLAP systems typically include provisions such as advanced
indexing and hashing to locate data while performing queries for handling sparse arrays, because both storage and retrieval costs are important
when evaluating online performance. MOLAP cubes are ideal for slicing and dicing data and can perform complex calculations. When the cube is
created, all calculations are pre-generated.
Benefits:
• Suitable for slicing and dicing operations.
• Outperforms ROLAP when data is dense.
• Capable of performing complex calculations.
Limitations:
• It is difficult to change the dimensions without re-aggregating.
• Since all calculations are performed when the cube is built, a large amount of data cannot be stored in the cube itself.

Hybrid OLAP (HOLAP):

ROLAP and MOLAP are combined in Hybrid On-Line Analytical Processing (HOLAP). HOLAP offers greater scalability than ROLAP and
faster computation than MOLAP.HOLAP is a hybrid of ROLAP and MOLAP. HOLAP servers are capable of storing large amounts of detailed
data. On the one hand, HOLAP benefits from ROLAP’s greater scalability. HOLAP, on the other hand, makes use of cube technology for faster
performance and summary-type information. Because detailed data is stored in a relational database, cubes are smaller than MOLAP.
Benefits:
• HOLAP combines the benefits of MOLAP and ROLAP.
• Provide quick access at all aggregation levels.
Limitations
• Because it supports both MOLAP and ROLAP servers, HOLAP architecture is extremely complex.
• There is a greater likelihood of overlap, particularly in their functionalities.

Other types of OLAP include:

• Web OLAP (WOLAP): WOLAP refers to an OLAP application that can be accessed through a web browser. WOLAP, in contrast to
traditional client/server OLAP applications, is thought to have a three-tiered architecture consisting of three components: a client, middleware,
and a database server.
• Desktop OLAP (DOLAP): DOLAP is an abbreviation for desktop analytical processing. In that case, the user can download the data from
the source and work with it on their desktop or laptop. In comparison to other OLAP applications, functionality is limited. It is less expensive.
• Mobile OLAP (MOLAP): Wireless functionality or mobile devices are examples of MOLAP. The user is working and accessing data via
mobile devices.
• Spatial OLAP (SOLAP): SOLAP egress combines the capabilities of Geographic Information Systems (GIS) and OLAP into a single user
interface. SOLAP is created because the data can be alphanumeric, image, or vector. This allows for the quick and easy exploration of data
stored in a spatial database.