What is OLAP

OLAP or On Line Analytical Processing is the formal name of multidimensional analysis - another way to look at information intuitively.

With OLAP you can look at a set of corporate data in many different ways without much effort. OLAP files or cubes are model the data in dimensions. A dimension is the classification of some activity in an organization with which you can measure your success.. For example, you can track your sales data against product or customer in a period of time.

There are two kinds of dimensions that you can use, regular dimensions and measures dimensions. 

Regular dimensions are the items of data that you want to measure, for example, if you want to keep control of sales you can use:

Customers: Which one are my best buyers, where are they located, what do they buy?

Products: Regarding customers, what my customers are buying? which products are hot?

Time, where do I stand now with respect to last year or last month?

In another application, account receivable you can use dimensions like Time to track the due date of documents, in accounting you can use dimensions like charts of accounts, cost center, etc..

Measures dimensions are the numbers that appear in the analysis depending on the elements chosen from the regular dimensions. For example in a sales cube, we would want to track Revenue, cost, units sold, discounts, etc..

Once you have this data, you put it on a highly sophisticated structure called multidimensional cube. A cube can reside in a specialized database like Microsoft Analysis Services or as a standalone file. This cube will let you look at your information in any way you like. You are able to cross all the dimensions to obtain new information which will answer the questions you are looking and enable you to make better decisions.

There are two basic operations that you can do with an OLAP cube:

Slicing and Dicing: You can change the dimensions that you are looking at to have another view of data. For example, Sales by product can be changed very easy to Sales by salesman. Slicing is to change the value of a dimension for another value, change from sales of January to sales of February. Dicing is like throwing a dice and look at a new face of the cube.

Drilling: Data items can be drilled down to get more information. If you look at geographical data, you can drill down from a region to a country and then to a city and then to a customer to look at information at greater detail.

This simply combination of features unlocks corporate or business information to all decision makers in many unforeseen ways.