Andrew Morgan

Using OLAP Technology for Business Intelligence

How OLAP helps you.

One of the highest priorities for companies in the financial industry and in other markets is the ability to accurately predict revenue.  Alternatively, one of the major pitfalls for these companies is the lack of an adequate method to budget and make financial predictions.  Most companies use ERP systems to collect data for budgeting and forecasting and spreadsheets for the reporting functions of these activities.  Unfortunately, spreadsheets are limited in how much information they can provide in a timely manner and involve a great deal of upkeep.  Because of the spreadsheet structure, changes need to be manually repeated across all sheets or workbooks to ensure accuracy.  Because their formulas are hidden, spreadsheets need to be painstakingly checked make sure that the information displayed by the sheets is correct.

The Alternative

On-Line Analytical Processing, or OLAP, is an umbrella term for the technologies that include decision support, business intelligence, executive information systems, and more.  An OLAP system uses specific dimensions to map and categorize data according to the specific fundamentals of a company’s business.  For example, using the idea of products, OLAP could map a variety of product offerings from brands to color.  A very large and complex spreadsheet would be needed to keep track of the same information.  OLAP could also use other dimensions such as business units, geography, customer information, or time periods to create a variety of different reports.  A company would need to manually create a huge number of spreadsheets to house and analyze data for only a fraction of this information.

Transparency and Flexibility

Another attractive feature of using an OLAP system for business intelligence is the level of transparency and flexibility.  Companies can see the relationships between their dimensions instantly and can manipulate the dimensions to get the information they need quickly.  If changes are made in the real world that affect the dimensions, changes can be made to the dimensions within the OLAP system as well, without the need to manually change every single report that the dimension is relevant to.  Companies also have the ability to see at a glance the different way the relationships between dimensions can be represented or how the relationships can be recombined to extract more information that is pertinent.  To get the same information, an entirely new spreadsheet workbook would have to be created manually for each new relationship, which would require significant time and resources. 

Companies that use an OLAP system have ability to get reliable business intelligence quickly.  OLAP can be distributed to a variety of users using a variety of platforms, as well, giving managers the power to answer their own data analysis questions without having to go through the Finance Department repeatedly.  With drillable reporting and real-time data analysis as additional features, OLAP is clearly the direction any company should take for competitive business intelligence.

Article Tags: Business Intelligence, Olap System

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