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Allocation Engines is another differentiator for OLAP vs. Data Warehouse. Simplistically-It allows the users to automatically allocate OR in other words 'split' the value into multiple values.
OLAP Allocation Engine enables users to :
- Take a source data
- Define the basis of allocation
- Execute the allocation operation
- Store the allocated values to the target data.
A Simple example:
You want to allocate the enterprise IT expense (source) to IT expense for each line of business/departments (Target). The 'basis' of allocation is: 70% of the IT expense to be allocated on the basis of the LAN IDs and 30% of the expense is on the basis of the business revenue generated by the line of business (non-earning departments will not be included in this allocation basis). The operation will be 'proportional' allocation. This means that the expense will be allocation proportionally on the basis of number of LAN IDs and Business Revenue (for 70% and 30% of Enterprise IT expense respectively).
From OLAP perspective, OLAP will pick the source data from within OLAP OR from Data Warehouse (if it is not stored in OLAP). It will apply the allocation basis and the output values (IT expense for the period calculated for each line of business) will be stored in OLAP (as a write-back). As a side note the source, and target may be outside of OLAP, while using the allocation engine of OLAP server.
Here are the typical Allocation Analysis capabilities linked to OLAP:
- The source and basis can be formulas, so you can perform computations on existing data and use the result as the source OR basis of the allocation. For example, you can have IT expense to be formula of summation of various IT expense lines stored in OLAP (like license fee, Data centre operations expenses, Network expenses). Basis of allocation is typically a formula.
- You can specify the method of operation of the allocation for a dimension. The operations range from simple to very complex. You can have:
- Proportional allocation
- Even Allocation
- Combination of proportional and Even calculation etc.
- You can specify whether the allocated value is added to OR replaces the existing value of the target cell. Taking the same example of Enterprise IT expense, the whole IT expense is lying in the IT account. When you run allocation engine, IT department will also be allocated certain expense, as it also has got some LAN IDs for its own employees OR on-site vendors. You can specify if you want to replace this value, add to this value (not a correct option) OR store it separately.
- You can specify an amount to add to OR multiply by the allocated value before the result is assigned to the target cell. This is an extension of what you call the 'allocation operation'. Taking the same IT example- Let's say that you have calculated the IT expense figure for each line of business/department. You may like to add a 2% additional expense overhead, as you allocate. This expense is to take care of any special IT initiatives, which may not be linked to business case driven IT projects.
- You can exclude certain values within a dimension hierarchy so that both the source data and target data is not included in the whole allocation process. Taking the same IT expense example- You may like the a certain expense like (like License Fee for ERP system) not to be included, as that might be part of the overall licensing agreement between your parent company and the ERP vendor. This will ensure that this expense is neither considered as source and nor applied to the target data.
- Within the allocation operation, you can define the limits and tolerance. For example- not to allocate IT expense to departments, which have less than 20 LAN IDs, OR not to allocate IT expense, where it is less than 10000 USD. This kind of allocation rules, necessitate iterative allocation calculations.
- You can store different versions of allocations. For example- if same department has two different allocations for IT expense. Say, there is an enterprise IT expense allocated to that department (the example used throughout this page), and there is direct allocation of license fee for a software, which is bought exclusively by this department. You should be able to store both of these allocations in separate cells.
- You are able to handle allocations for special situations. For example- if the basis is NULL- Say the LAN IDs are null in certain departments. This may not be a real-life scenario, but you are able to define that the allocation should consider this as non-applicable and should not allocate any expense.
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