Online Analytical Processing

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What Does Online Analytical Processing Mean?

Online analytical processing (OLAP) is a high-level concept that describes a category of tools that aid in the analysis multi-dimentional queries.

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OLAP came about because of the tremendous complexity and sheer growth associated with business data during the 1970s as the volume and type of information became too heavy for adequate analysis through simple structured query language (SQL) queries.

Techopedia Explains Online Analytical Processing

Traditional SQL’s data-comparison ability is limited. For example, SQL can manage queries, such as a list of sales agents, versus sales volume histories. However, with larger data volumes, it can be overwhelming just to use SQL and tough to translate data into information that easily facilitates decision making. It is difficult to answer certain questions in SQL, such as why product sales are higher mid-month, or why female sales agents consistently outsell their male counterparts during the summer.

Recognizing that relational databases have inherent limitations, manufacturers created new ways to represent complex data relationships and analyze results to discern hidden and previously unknown patterns and trends.

A case study about OLAP’s potential grew from one large retailer’s use of OLAP tools for data mining. This retailer noticed that late-night baby product purchases correlated with increased late-night beer purchases. Initially, this seemed like a coincidence, but deeper customer analysis revealed that late-night customers were mostly young fathers in their mid to late twenties or early thirties – a demographic also associated with late-night disposable income. Based on this data, retailers began cross merchandising baby products and beer, and combined sales for both product lines skyrocketed.

This case study proved how OLAP equips researchers to delve and uncover data relationships between seemingly unrelated events and trends, thus enhancing business decision making.

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Margaret Rouse
Technology expert
Margaret Rouse
Technology expert

Margaret is an award-winning writer and educator known for her ability to explain complex technical topics to a non-technical business audience. Over the past twenty years, her IT definitions have been published by Que in an encyclopedia of technology terms and cited in articles in the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine, and Discovery Magazine. She joined Techopedia in 2011. Margaret’s idea of ​​a fun day is to help IT and business professionals to learn to speak each other’s highly specialized languages.