OLAP or online analytical processing is a technology to organize data. Its aim, therefore, is to support understanding and to create reports.
It is simply a way of making a new copy of the business data and storing it in a cube. The cube stores the data differently. It is stored in a way that is optimized for reporting. Creating a new copy of the data means that reporting work won’t impact transactional systems.
Online Analytical Processing is the technology behind many Business Intelligence applications. It allows users to analyze data in multiple dimensions, and provide the insight and understanding they need for better decision making.
OLAP technology is one part of a larger ecosystem. Data comes from a warehouse into the OLAP system. Subsequently, data flows from the OLAP system to mining and visualization tools.
You can read the Wikipedia article on online analytical processing here.
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