Online Analytical Processing- What is it, and When Should it Be Used?
What is OLAP?
OLAP is an acronym for Online Analytical Processing, which is a method of organizing and visualizing data that is made available from many different sources simultaneously.
There are four primary analytical approaches to analyzing data presented in OLAP software:
- Consolidation and aggregation
- Drill-down
- Data slicing and dicing
- Pivoting
Each of these analytical approaches can be used separately or in conjunction to approach effective FP&A (financial analysis and planning).
When Should OLAP Be Used?
An OLAP application is suitable for any business type and can be used in various types of financial reporting, planning, budgeting, and analysis. When utilized appropriately, there can powerful reporting benefits attained. Those reporting benefits, in turn, can be massively helpful to any organization that wants to become more efficient and more effective. It can also help identify opportunities for improvement and growth.
Because an OLAP requires organizing data into complicated schemas, it is important to analyze and verify if an organization is capable of successfully implementing OLAP software. It is also important to understand what an organization is looking to achieve by implementing an OLAP application as transactional data cannot be accessed with OLAP software, and an OLAP cube is not able to hold large numbers of dimensions.
However, an OLAP application and be extremely beneficial for an organization that has an already-cumbersome budgeting and planning process. Any organization that is housing data across scattered spreadsheets and various formats can benefit from the implementation of an OLAP application.
Learn more about OLAP here.
