Online Analytical Processing (OLAP) is a technology that enables analysts to analyze the complex data derived from the Data Warehouse. It is based on a multidimensional data model. It includes capabilities like prediction, report viewing, and complex analytical calculations and allows analysts to get the insights of the data in a fast and consistent way. By using OLAP users can easily extract the data for analyzing purposes.
It simply pre-calculates and pre-aggregates data to make analysis faster. These values are stored in the OLAP database, or in the OLAP cube.
APPLICATIONS OF OLAP:
Business Reporting for sales: The Business Reporting gives an overview of the sales activity in the sales activities within an organization. It shows the trends in the sales over a certain time period. It also analyzes the different steps for sales and sales executive performance. These reports can be used to analyze the sales data and assess the situation to make the best decisions to undertake.
Marketing: Industries like digital marketing, health care, eCommerce, and finance uses OLAP in their marketing.Example: Market Basket Analysis is a technique that gives the careful study of purchases done by a customer in a supermarket. This concept identifies the pattern of frequent purchase items by customers. This analysis can help to promote deals, offers, sale by the companies and data mining techniques helps to achieve this analysis task.
Management Reporting: It aims to inform the managers of different aspects of the organizations about the data from the various departments of the company in order to help them to make better decisions. They collect the data and present them in an understandable way. It also provides the insights of the company on how a company is doing and what are the steps to be taken to increase efficiency and make decisions to remain competitive in the market.
Business Process Management: Business process management refers to improve a business process from end to end by analyzing it. It helps organizations to steps required to carry out a business task.
Financial Reporting: Financial Reporting refers to financial reports of an organization that are released to stakeholders and the public. It includes the financial statements which include the balance sheet, income sheet, statement of cash flows, etc. It shows the financial information that the company chose to show.
Some other applications of OLAP are as follows:
- Marketing analysis
- Customer and product profitability
- Supply and Demand forecasting
- Human resources analysis
- Resource analysis and capacity planning
- Variance analysis
- Claims experience analysis