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Articles
Why use OLAP?
Introduction
The system that
performs the day-to-day functions of a business such as order entry,
accounting and inventory control is called the "operational
system" and the information it creates is called
"operational data". OLAP is used to bring awareness of the
substance between different data elements present in a business’
operational data. OLAP is a "discovery" process, in that you
uncover information you would typically not find without data mining.
Unlike using pre-established computer reports to get information, OLAP
has no fixed presentation of data and allows the user to create
inquiries based on what information he or she requires at the time.
Discovery through OLAP
The following is an
example of the use of OLAP in a sales application. The user may start
by bringing up a total of the overall sales of the company comparing
this year’s sales with last year’s sales over the same time span.
|
Subject |
Subject |
Jan-Jun 2005 |
Jan-Jun 2004 |
Trend |
Difference |
|
Level |
Description |
Sales |
Sales |
|
|
|
|
|
|
|
|
|
|
Company |
ABC Company |
8,640,000 |
8,287,000 |
4.3% |
353,000 |
Once this information is presented, the user
decides that a breakdown of the company’s individual branch totals
is desired. This initiates a DRILL-DOWN function. The ability to
perform drill-down functions is one of the most important aspects of
an OLAP system. Here is the information after drilling down to the
branch level:
|
Subject
|
Subject |
Jan-Jun 2005 |
Jan-Jun 2004 |
Trend |
Difference |
|
Level |
Description |
Sales |
Sales |
|
|
|
|
|
|
|
|
|
|
Company |
ABC Company |
8,640,000 |
8,287,000 |
4.3% |
353,000 |
|
|
|
|
|
|
|
|
Branch |
Seattle |
5,000,000 |
4,800,000 |
4.2% |
200,000 |
|
|
San Francisco |
2,000,000 |
1,500,000 |
33.3% |
500,000 |
|
|
Portland |
1,640,000 |
1,987,000 |
-17.5% |
-347,000 |
This is how the "discovery" process
works. When the user first looked at the overall company totals, it
showed that the business’s sales have increased.
With the uncovering of the decline in sales in the
Portland branch, showing the breakdown of the company totals by branch
paints a very different picture of the sales situation.
Now the user can continue with data research to get a better focus
on where the sales declines have been occurring. In the following
example, the user "explores" Portland’s total by
department:
|
Subject |
Subject |
Jan-Jun 2005 |
Jan-Jun 2004 |
Trend |
Difference |
|
Level |
Description |
Sales |
Sales |
|
|
|
|
|
|
|
|
|
|
Company |
ABC Company |
8,640,000 |
8,287,000 |
4.3% |
353,000 |
|
|
|
|
|
|
|
|
Branch |
Portland |
1,640,000 |
1,987,000 |
-17.5% |
-347,000 |
|
|
|
|
|
|
|
|
Department |
Home Electronics |
800,000 |
957,000 |
-16.4% |
-157,000 |
|
|
Women's Shoes |
720,000 |
820,000 |
-12.2% |
-100,000 |
|
|
Athletic Equipment |
120,000 |
210,000 |
-42.9% |
-90,000 |
Seeing that home electronics has the greatest
dollar decline, the user then explores (performs a drill-down
function), on that department and fine tunes the information down to
the product group level:
|
Subject |
Subject |
Jan-Jun 2005 |
Jan-Jun 2004 |
Trend |
Difference |
|
Level |
Description |
Sales |
Sales |
|
|
|
|
|
|
|
|
|
|
Company |
ABC Company |
8,640,000 |
8,287,000 |
4.3% |
353,000 |
|
|
|
|
|
|
|
|
Branch |
Portland |
1,640,000 |
1,987,000 |
-17.5% |
-347,000 |
|
|
|
|
|
|
|
|
Department |
Home Electronics |
800,000 |
957,000 |
-16.4% |
-157,000 |
|
|
|
|
|
|
|
|
Product Group |
Computers |
260,000 |
350,000 |
-25.7% |
-90,000 |
|
|
Televisions |
210,000 |
250,000 |
-16.0% |
-40,000 |
|
|
Stereo Systems |
150,000 |
165,000 |
-9.1% |
-15,000 |
|
|
Camcorders |
100,000 |
110,000 |
-9.1% |
-10,000 |
|
|
Portable Phones |
80,000 |
82,000 |
-2.4% |
-2,000 |
This shows the power of
an OLAP system. Rather than believe that the company was doing well
because of a 4.3% increase in sales, the user was able to quickly
"discover" that a serious sales decline exists and where the
core of that problem is.
Future of OLAP Systems
The OLAP example used
in this article is a simple, but very powerful depiction of what can
be accomplished when business users are given a different way of
looking at all the data they have been accumulating over the years.
As businesses realize
that an OLAP / business intelligence system is not overwhelmingly complex
and is affordable, more and more of these businesses will be including
this beneficial technology in their future data processing plans.
While implementing this new technology
at many businesses, It has been a quite a positive experience to
witness business users being "unleashed" on a refreshingly
new way to present computer information.
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