Data Warehousing – OLTP vs.

OLAP

We can divide database systems into Transactional(OLTP) and analytical(OLAP). In general

OLTP(Online Transaction Processing):

It stands for Online Transaction Processing system. As the name suggests, this is a stack of
application and database which primary support the transactional nature of an organization’s
business. This might include, order creation, logging service request, user creation, lead
creation, opportunity creation, recording interactions with end users etc., to name a few.
These systems not only are the tools to record data into system, they are also highly effective
in retrieval of small chunk of data. For the sake of explaining, let’s assume OLTP as any state
run bank’s ATM. You can deposit (INSERT), withdraw(UPDATE) certain sum of money
and view (SELECT) your account balance. If you have noticed, these actions in an ATM are
extremely fast – this in turn means that the system supporting the ATM function is built for
fast insert & updates. This drives all the necessary technical features of OLTP. Like
comparatively low database size, highly normalized database design, lack of historical data,
absence of indexes on tables etc.

OLAP(Online Analytical Processing):

Stands for Online Analytical Processing. On the other hand, OLAP systems are purely built
to support an organization’s decision support system. Organizations need large pile of data at
their disposal before they take any decision which would improve the revenue over a period
of time (for example). The analytical system again consist of suite of applications, database
(read data warehouse) and data integration layer for integration data from different source
system. The analytic application should have a scalable and robust engine which can handle
large sums of data and calculate aggregations, generates various cutting edge charts, delivers
scheduled reports to end users concurrently, provide flexibility to users to download reports
and charts to PPT/PDF/Excel etc. The database supporting this also needs to stand up to the
rigors of the analysis process that business users fire. This drives the features of the OLAP
database such as – ability to store historical data, highly denormalized database design,
presence of indexes on columns for faster data retrieval, building pre built aggregates for
analytics application to consume, ability to refresh the data warehouse with incremental
transactional data in a pre defined window etc. To draw parallels with the ATM example for
the OLTP system, imagine a national manager of a sales team trying to generate reports
which given an aggregated view of the quarterly national sales of a product. The report will
have ability to slice the national sales data further down to region (east, west, north south),
region to state, state to territories and to the individual sales representative. The entire user
journey through the UI, fetching of data from database upon drilling down from a higher
level sales report to the lower level and how the application and database work together to
give the end user the data he/she wants – all are part of suite of OLAP tools.
 OLTP System OLAP System
Online Transaction Processing Online Analytical System
(Operational System) (Data Warehouse)
Consolidation data; OLAP data
Operational data; OLTPs are the
Source of data comes from the various OLTP
original source of the data.
Databases
Purpose of To control and run fundamental To help with planning, problem
data business tasks solving, and decision support
Reveals a snapshot of ongoing business Multi-dimensional views of various
What the data
processes kinds of business activities
Inserts and Short and fast inserts and updates Periodic long-running batch jobs
Updates initiated by end users refresh the data
Relatively standardized and simple
Often complex queries involving
Queries queries Returning relatively few
aggregations
records
Depends on the amount of data
involved; batch data refreshes and
Processing
Typically very fast complex queries may take many
Speed
hours; query speed can be improved
by creating indexes
Larger due to the existence of
Space Can be relatively small if historical aggregation structures and history
Requirements data is archived data; requires more indexes than
OLTP
Typically de-normalized with fewer
Database
Highly normalized with many tables tables; use of star and/or snowflake
Design
schemas
Backup religiously; operational data is Instead of regular backups, some
Backup and critical to run the business, data loss is environments may consider simply
Recovery likely to entail significant monetary reloading the OLTP data as a
loss and legal liability recovery method