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OLTP vs OLAP: Do you know the difference?

OLTP (online transaction processing) VS OLAP (online analytical processing) are both types of production databases, however they have some key differences.

In this blog you'll learn how these two databases differ.

OLTP

OLTP provides an immediate record of current business activity. It is operational and used for the "here and now" - "real-time".

To put it another way...

  • Used for high volumes of small transactional activities
  • Uses simple, standard queries
  • Three base commands: INSERT, UPDATE and DELETE
  • Millisecond response time
  • Can be tailored or designed for specific industries and applications
  • Updated by the user in short, quick intervals
  • Providing that historical data is archived and stored elsewhere, OLTP generally doesn't use much storage space
  • Regularly backed up
  • Lists day-to-day business transactions to increase the productivity of end-users
  • Used by customer-facing personnel

Examples of an OLTP Database

One may encounter OLTP databases in normal daily life. Examples include order entry, retail sales and financial transaction systems.

An ATM for instance is a great example of an OLTP database system.

Blue ATM screen with options to demonstrate OLTP example
The ATM screen featured above displays information to the user regarding the funds contained within their accounts at the time of access.

OLAP

An OLAP database generates and validates insights from data compiled over time. That historical perspective empowers accurate forecasting.

However, as with all business intelligence, the insights generated with OLAP are only as good as the data pipeline from which they emanate. It is more informational than operational.

Characteristics are listed in the bullets below:

  • Handles large volumes of data
  • Complex queries
  • Based on SELECT commands to aggregate data
  • Response times can take minutes to hours depending on the size and amount of data
  • Are subject-specific i.e. sales or inventory
  • Used to discover business insights and plan
  • Generally contain large aggregates of data
  • Do not need to be regularly backed up
  • Not customer-facing; used by data analysts
  • Display enterprise data

Examples of an OLAP Database

Most people do not typically encounter these types of databases in daily life unless they actively use them in business. For example, inventory lists and databases consisting of historical customer information.

Oracle NetSuite is an example of this type of database.

Oracle NetSuite OLAP inventory management display screen

In Sum

These two databases do not compete against one another, they're essentially two sides of the same coin. Two separate databases that work independently of one another.

Having the right OLAP and OLTP database structures can help improve ROI and lead to increased business intelligence.

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