Technology

How Does OLAP Benefit a Business?

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No discussion of business intelligence is complete without the mention of online analytical processing, also known as OLAP. A decade ago, Network World mentioned how OLAP slowly started to enter the market.

Looking back on that can allow us to appreciate how far today’s OLAP systems have grown. From their humble beginnings, these systems have grown to be among the come into their own as the primary methods currently used for informing businesses about the factors affecting their performance.

What Exactly Is OLAP?

At its core, OLAP is a database system. As SAS states, OLAP is a technology that is used to build decision-making systems, crafted on the framework of hierarchies of data and multidimensional views.

It differs from a traditional database because it doesn’t order data points into records. Rather, it uses spatial analysis, making it closer to how humans think about things, and significantly cutting down the time it takes to query the database.

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The faster query time will not be as important when it comes to small databases, but as a  company’s data store grows, the time needed to get results from a traditional database also increases.

OLAP remedies this problem by using spatial processing of data rather than sequential processing. But how does implementing an OLAP system like Apache Druid (one of the most popular open-source OLAPs)  benefit a business?

Benefit 1: Works Well with Big Data

As more companies start to tap into the new technology of Big Data Analytics, a need arises for a processing system to deal with this massive volume of information.

The World Economic Forum mentions that the earth’s connected digital footprint is expected to be around forty-four zettabytes (44 trillion GB) by 2020. While it’s unlikely that any business could produce anything of this order from their data collection, having even a fraction of this data on a standard relational database could mean a single query takes hours to return a result.

With the centralization of data and the hierarchical arrangement making it easy to process data, companies that already have a stake in Big Data can benefit greatly from implementing an OLAP system to replace their relational databases.

Benefit 2: Analysis at the ‘Speed of Thought’

As mentioned before, the processing speed of OLAP systems is significantly faster than relational databases. Codecentric mentions that OLAP systems regularly produce sub-second queries for large data sets. 

The method of storing data and pre-caching queries allows the database to have results on-hand by pre-empting the querying process. As a result, users can get the information they need without having to wait for the system to complete processing. OLAP is such a big deal in business intelligence that companies that don’t invest in it struggle to remain competitive amidst their competitors.

Flexible for Use in Many Situations

The power of an OLAP system doesn’t just come from its robust back end. In many situations where business intelligence is necessary, users already have a familiar interface.

Users already familiar with certain front-end processing systems can easily use OLAP on their data at the back end. Microsoft mentions that OLAP systems can be used to process data in Excel or SharePoint.

With this ease of use behind it, it’s easy to see why businesses consider OLAP to be a significant improvement over their relational database system.

The front-end users can keep using the software they’re already familiar with, with no lost time for retraining.

Centralized Data and Source-of-Trust

One of the most significant benefits that OLAP offers to businesses is the centralization of data into a single trustworthy source. As Corporate Compliance Insights reports, in the early days of business intelligence, there was a tendency to aggregate data across multiple spreadsheets, leading to inconsistencies of definitions and information.

OLAP sidesteps this problem by offering a central location where all data about the company can be stored.

The consistent definitions of data and the fact that all processing units utilize the same data for their processing means that insights that BI software generates can be reproduced on a separate system flawlessly.

A business should have faith in its data, and OLAPs offer companies that convenience.

The Evolution of Business Intelligence

Some quarters of the business intelligence community consider OLAP to be on its way out. Big Data systems now use different techniques such as Data Lakes to centralize their data stores.

However, because OLAP has become so critical to BI software and because it’s so easy to integrate into an existing system, companies might be wary of moving away from the ‘tried-and-true’ formulas, since they know that OLAP works.

The field of technology is always evolving, so no one can be sure what the next decade will bring. OLAP is evolving as well, to create better processing paradigms for the next generation of BI needs. Once it stays ahead of the curve and keeps evolving to meet users’ needs, it’s highly unlikely we’ll see OLAP fade into obscurity soon.

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About the author

Rahul Setia

Rahul Setia was born and raised in the Kaithal, Haryana. He worked at brands like Jabong, ProProfs etc. He was also in the List of Top 100 Social Media Influencer's 2019 by Status Brew. He lives in Delhi/NCR and is a Digital Gig & Founder of Websites i.e TechBlogCorner.com, ViralMasalla.com, DealorCoupons.com.
Follow me on: LinkedIn, @rahulsetia007 and Facebook.

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