OLTP Vs OLAP - The Ultimate Comparison

The two terms OLTP and OLAP look kinda similar, but they relate to two different types of systems.

Online Transaction Processing (OLTP) is a system that stores captures and processes data in real-time.

In, Online Analytical Processing (OLAP), complex queries are used to analyze collected historical data from the OLTP systems.

What is OLTP?

OLTP is an abbreviated form of Online Transaction Processing, OLTP systems provide transaction-oriented applications. Transaction data is gathered and maintained in a database by an OLTP system. Individual database entries comprise numerous fields or columns in each transaction. OLTP systems are used by organizations for day-to-day transactions.

Examples of OLTP systems:

Banking software.
Online ticket booking software.
Messaging.
Data Entry.
E-Commerce purchasing and order management.

What is OLAP?

OLAP is an abbreviated form of Online Analytical processing, OLAP consists of software or tools that are used for analytics and getting insights from databases for making business decisions.

OLAP software provides an environment for analyzing data from multiple databases at one time. OLAP systems can make use of transactions from databases of OLTP systems and apply queries on that data for analytical purposes, data mining, or BI(business intelligence) projects, the major factor that determines the performance of these systems is the response time taken to analyze the database.

OLAP databases help decision-makers to take decisions based on the analytic data provided by OLAP systems.

Examples of OLAP systems:

Data Warehouses
Movie recommendation system
Music recommendation systems
Marketing trends analytical system

OLAP products:

Oracle OLAP
Oracle Essbase
IBM Cognos

Key Difference Between OLTP Vs OLAP

The primary difference between OLTP (Online Transaction Processing) and OLAP (Online Analytical Processing) lies in their core purpose and data handling. OLTP systems are designed to process transactions in real time, with short and frequent transactions and simple queries while OLAP systems are designed for complex data analysis and reporting, with long and infrequent transactions and complex queries.

OLTP systems are well-suited for tasks such as processing customer orders and tracking inventory levels, while OLAP systems are well-suited for tasks such as generating reports on sales trends and identifying customer segments.

OLAP Vs OLTP: Detailed Comparison

Below are the major differences between OLAP and OLTP systems:

oltp-vs-olap

There are many parameters on which we are comparing OLAP vs OLTP systems.

S. No	Parameters	OLAP	OLTP
1	Definition	OLAP consists of software or tools used for analytics and getting insights from databases for business decisions.	OLTP systems provide transaction-oriented applications. Transaction data is gathered and maintained in a database by an OLTP system.
2	Data Source	OLAP systems can make use of transactions from databases of OLTP systems	OLTP systems work on current data, and they are the sources of data themselves
3	Characteristic	Large volume of data to work on	Large number of short transactions
4	Method used	These systems make use of data warehouse	These systems make use of DBMS (database management system)
5	Application	Used for analytics, data mining, and decision-making	Used for storing data for daily business tasks or transactions.
6	Functionality	These systems works on database queries and information retrieval	These systems works on data manipulation and can modify database
7	Normalization	Tables are not normalized in these systems	Tables are normalized up to 3NF in these systems
8	Data Integrity	In these systems, data doesn't get usually updated, so data integrity is not an issue	OLTP must maintain data integrity.
9	Purpose	Its main function is to get or extract useful data from the database	Its main function is to insert, update, or delete data from the database, i.e. data manipulation.
10	Response time	The Response time of OLAP systems can vary from seconds to minutes as a huge amount of data is extracted from the database	The Response time of OLTP systems is in milliseconds as small transactions take place each time which does not take much time.
11	Volume of Data	A Large amount of data is required and is stored, i.e. data can be in TBs, PBs, etc.	a Large amount of data is not required as transactions are maintained only, and historical data is archived, i.e. data can be MBs, GBs, etc.
12	Operations	It allows read operations and rarely the write operations	These systems allow read and write operations.
13	Audience	It is a customer-oriented process	It is a market-oriented process
14	Backup	OLAP systems require backup from time to time, backup is not important as the data is always retrieved from the database	Back-up is very important as data loss can hinder analytical purposes. Hence data backup is maintained rigorously.
15	Database Design	Database is designed with a focus on the subject.	database is designed to focus on the application.
16	Productivity	Increases the productivity of a business and analysis	Increases the productivity of a user.
17	Number of users	Database can only be accessible to hundreds of users	Database allows thousands and more users.
18	Speed	It ensures quicker results for fetching and working on the queries	It ensures the transactions are fast with no delay on a daily and regular basis.
19	Performance metric	Query throughput is the performance metric for this system	Transaction throughput is the performance measure for this system.
20	User type	Used by Data users like workers, managers, and CEOs of an organization.	used by Data critical users like clerks, DBA & Data Base professionals

Benefits of Using OLTP Method :

Response times are quick.
Transactions involving modest bits of data involving a large number of users.
Transaction volume is lower.
Data updates, insertions, removals, and basic searches are examples of simple transactions.
Data sets with indexes for quick search, query, and retrieval.
Transactions involving a limited number of database records and a small amount of data.

Benefits of Using OLAP Services :

Multidimensional data with a business focus.
Calculations with a business focus.
Data and calculations that can be trusted.
Analyzing the speed of thought.
Reporting is flexible and self-service.
Growth of Advanced Analytics.
Increase user self-service and productivity.
Share data intelligently and securely.

Drawbacks of Using the OLTP Method :

Staff Dependency is High.
Complex queries and structure.
Discreet Information.
Concurrent Data Modifications can cause loss of data integrity.
There can be a Risk of Data Loss.
Integrity of data is important.

Drawbacks of Using OLAP Services :

Extreme reliance on technology.
Capacity for calculating is useless.
A large amount of storage is required
Can't be used by multiple users.
Response time is slow.
This is a theoretical model.
Unusual and unanticipated danger.

Conclusion

In conclusion, OLTP (Online Transaction Processing) and OLAP (Online Analytical Processing) are two distinct types of database systems optimized for different purposes within an organization.
OLTP systems are designed for processing large volumes of transactions in real-time, while OLAP systems are designed for complex data analysis and reporting.
While OLTP maintains the current state of data, OLAP provides the historical context and insights needed for strategic planning and business intelligence.
Organizations often utilize both OLTP and OLAP systems, with data integration mechanisms, to strike a balance between operational efficiency and data-driven decision-making.
The choice between OLTP and OLAP should align with an organization’s specific needs, with the understanding that they serve different functions within the data ecosystem.