OLAP technology is a vast improvement over traditional relational database management systems (RDBMS). Relational databases, which have a two-dimensional structure, do not allow the multidimensional data views that OLAP provides. Traditionally used as an analytical tool for marketing and financial reporting, OLAP is now viewed as a valuable tool for any management system that needs to create a flexible decision support system.
Today's work environment is characterized by flatter organizations that need to be able to adapt quickly to changing conditions. Managers need the tools that will allow them to make quick, intelligent decisions on the fly. Making the wrong decision or taking too long to make it can affect the competitive position of an organization. OLAP provides the multidimensional capabilities that most organizations need today.
By using a multidimensional data store, also known in the industry as a hypercube, OLAP allows the end user to analyze data along the axes of their business. The two most common forms of analysis that most businesses use are called "slice and dice" and "drill down".
SLICE AND DICE refers to the end user's ability to select specific cuts of data from the aggregate data to examine an area of specific interest to the user. OLAP allows the user to "rotate" a specific piece of data along any dimension. For example, a Health Care Provider may be interested to see what sort of revenue their HMO product in Memphis has generated over the last two years. After analyzing this situation the user can rotate the data to see the revenue for the last two years for all of their HMOs in the Mid-West.
DRILL DOWN refers to end user's ability to get more detailed information on a subject in order to help the user answer questions. For example, if a Health Care Provider was running a medical cost report for their hospital facility in Orlando and the hospital charges appeared high the end user would be able to "drill down" on the hospital charges to a individual subscriber level (or even a CPT-4 level) in order to better determine why the charges appeared greater than expected.
OLAP fills the gap that two-dimensional relational databases created. OLAP technology provides the end users with the flexibility needed in today's changing work environment.
www.access.digex.net/~grimes/olap/olap.collections.html