Olap

Olap is usually associated with cross tabulating, drilling up, down, through and across, pivoting and other fancy presentation features.

But there is much more on the back-end than in the presentation layer. 

The multidimensional engine is what allows financial modelling and sales/marketing analytic applications to be built.

For example, you may want to perform an allocation where total corporate overhead is entered, and an algorithm is used to allocate expenses based upon a given product/market combination sales as a percentage of aggregated sales…maybe adjusted by a factor which takes into account the business unit involved.

Or you may want to make a projection of next year assets and liabilities for a financial institution – typically a bank - where many contracts (e.g. mortgages) are still “living”, and their contributions to the cash-flow is a function of their financial profile (fixed or floating rates, for instances) and the forecasted term structure of interest rates.

These calculations, which are almost impossible to do with sql statements, are easily formulated as multidimensional expressions.

What about scenario/sensitivity analysis where analysts would like to iteratively enter numbers, run a complex mathematical calc, see the results in a few second, change some numbers, run the calc again, etc.?

We apply OLAP logics to financial accounting, budgeting, bank asset and liability management (ALM), fixed income and equity research, derivatives pricing, portfolio management, trading, risk management etc.