When it comes to Data Warehousing, there is a lot of confusion about the difference between OLAP and OLTP. They are the types of Data Processing Systems that are used in Data Warehousing for analyzing business information. This article will cover the key difference between both systems so that you can clearly understand which system should be used in Data Warehousing. But first, let’s understand the basics of Data Warehousing.

Data Warehouse and Warehousing

A Data Warehouse is a central repository (Centralized Database) where all the enterprise data coming from different resources is stored, managed, and analyzed for gaining business insights. The data which comes in different formats can be stored in a warehouse and is accessed using some business intelligence tools to query the business problems.

This data is ingested through ETL (Extraction Transformation and Loading) Operations and then is analyzed using OLAP or OLTP System, whichever is used. This process of querying the business data for decisions using a centralized database is called Data Warehousing.

What is OLAP?

OLAP stands for Online Analytical Processing System. This Data Processing System is used for multidimensional analysis of large volumes of Data. It is mostly preferred for Data Mining (Extracting patterns in Large volumes of data), Business Intelligence, and Complex Analytical Calculations like Budget Forecasting, Sales Analysis, etc.

What is OLTP?

OLTP or Online Transaction Processing System is used to enable real-time executions of huge numbers of transactions by a large number of users. Here, the Transaction means a single unit of work that is done to modify the data in the database.

For example, as soon as you withdraw money from the bank, your account balance reflects changes instantly. Or, when you change your account password, it is changed instantly without a delay. These are the daily life examples of Transaction Processes in the Database handled using the OLTP System. This is the main difference between OLAP and OLTP.

The Key Difference between OLAP and OLTP

Now, we have covered the basic idea of both topics. Let’s see the Difference between OLAP and OLTP Systems.

OLAP  (Online Analytical Processing System)

OLTP (Online Transaction Processing System)

  • OLAP is used for complex data analysis for better decision-making.

  • OLTP is used for Processing a huge number of transactions.  

  • OLAP is based on the extraction of data for complex analysis. Therefore, the queries involve a large number of records in the database. 

  • OLTP focuses on making simple database modifications. Therefore, the queries involve a small number of records in the database. 

  • The data source for OLAP is a data warehouse in which the database is based on a multidimensional schema. This enables OLAP to collect and analyze current as well as historical data. 

  • The data source for OLTP is a Standard Database Management System to accommodate real-time transactions on current operational data.

  • OLAP Operates on a huge dataset. Thus, response time is slower.

  • OLTP involves simple queries to update, insert and delete data. Thus, response time is faster and it requires less storage space.

  • OLAP doesn’t focus on the modification of data frequently. Thus, there is less frequency of data backup.

  • OLTP handles Transactional Processing which involves modifying the data frequently. Therefore, concurrent backups of data are required to maintain data integrity. 

  • OLAP System is designed for Data Scientists, Business Analysts, and Knowledge Workers who work on Business Intelligence, Data Mining, and other Support Applications. 

  • OLTP Systems are designed for frontline workers like Cashiers, Clerks, etc., and Self-Service Applications like Online Banking, Ticket Reservation Systems.  

OLTP vs OLAP: Which is better?

Which Data Processing System is best for you depends on the type of business requirement. The answer to this question depends on whether you need a system to analyze huge amounts of data or you need a system for real-time Transaction Processing on current operational data.

Once you understand the difference between OLTP and OLAP, you can easily identify what type of system to use for the business. If you just need Transaction Processing and Management, you can go with OLTP but if need to optimize your OLTP System by complex data analysis, you should choose OLAP Systems for smarter decision-making using the data.