OLAP - The Multidimensional Solution
Business is a multidimensional activity and businesses are run on decisions based on multiple dimensions.
Businesses track their activities by considering many variables. When these variables are tracked on a spreadsheet, they are set on axes (x and y) where each axis represents a logical grouping of variables in a category. For example, sales in units or dollars may be tracked over one year's time, by month, where the sales measures might logically be displayed on the y axis and the months might occupy the x axis (i.e., sales measures are rows and months are columns).
Rather than simply working with two axes (called "Dimensions" in the OLAP environment), companies have many dimensions to track-for example, a business that distributes goods from more than a single facility will have at least the following dimensions to consider: Accounts, Locations, Periods, Salespeople and Products. Together these dimensions represent the whole business picture, providing the foundation for all business planning, analysis and reporting activities.
Nowadays, many spreadsheet users have heard about OLAP technology, but it is not clear to them what OLAP means. Unlike relational databases, OLAP tools do not store individual transaction records in two-dimensional, row-by-column format, like a table, but instead use multidimensional database structures known as "Cubes" in OLAP terminology to store information. The data and formulas are stored in an optimized multidimensional database, while views of the data are created on demand. Analysts can take any view, or Slice, of a Cube to produce a worksheet-like view of points of interest.
The capability to perform the most sophisticated analyses - specifically, the multidimensional analysis provided by OLAP technology is an organizational imperative. Analysts need to view and manipulate data along the multiple dimensions that define an enterprise essentially, the dimensions necessary for the creation of an effective business model.