What is OLTP?
Online Transaction Processing (OLTP) is a type of data processing that involves executing numerous concurrent transactions—such as online banking, shopping, order entry, or sending text messages. Traditionally, these economic or financial transactions are recorded and secured, allowing an enterprise to access the information at any time for accounting or reporting purposes.
Previously, OLTP was confined to real-world exchanges involving money, products, information, service requests, and more. However, the definition of a transaction has broadened over the years, particularly with the advent of the internet. Now, it encompasses any digital interaction or engagement with a business, made possible from anywhere in the world via any web-connected device. This includes actions such as downloading PDFs from a webpage, viewing a specific video, or triggering automatic maintenance. Even comments on social channels that might be crucial for a business to improve customer service are now considered transactions.
OLTP architecture
An OLTP system utilizes a tri-layered structure:
- The presentation layer: Acting as the user interface, this layer generates the transactions.
- The logic layer: Often referred to as the business logic or application layer, this level manages transaction data based on set rules.
- The data or data store layer: This layer is responsible for storing and indexing each transaction along with its related data. It includes both the database management system (DBMS) and the server for the database.
Each of these tiers operates independently with separate infrastructures and update intervals, ensuring modifications to one tier don't impact the others.
Characteristics of OLTP
OLTP systems are customized to a company's requirements while maintaining essential ACID properties. They facilitate concurrent business transactions from several users, operating with impressive speed and often boasting response times under one second. As key systems, OLTPs also ensure high availability.
Here's a closer look at the features of OLTP systems:
- High-volume transactions for a broad user base. OLTP systems are geared to manage a multitude of concurrent transactions from a large pool of users. For example, online retailers depend on OLTP to tackle demand spikes for popular items on Black Friday, guaranteeing successful transactions for every customer.
- Concurrency algorithms. OLTP systems handle thousands of short transactions. Concurrency algorithms make sure every user's transactions are processed independently, avoiding simultaneous data alterations. This not only secures transaction data integrity but also prevents double bookings or purchases, boosting customer satisfaction.
- Swift response. Rapid response times are characteristic of OLTP environments. Customers have grown to expect instantaneous response times for smooth online purchases.
OLTP vs OLAP
OLAP and OLTP both work with large data sets but serve distinct roles. Typically, OLTP handles commercial customer interactions, while OLAP addresses analytical queries for business managers.
The key differences between the two systems are indicated below:
- OLTP systems supported transaction-oriented applications in a three-tier architecture while OLAP systems analyze data stored in a data warehouse.
- OLTP controls the daily transactions of an organization, while OLAP provides a platform for business analysis encompassing forecasting, analysis, planning, and budgeting.
- OLTP involves short online transactions, while OLAP is characterized by large volumes of data.
- OLTP uses a relational database that handles multiple concurrent transactions, while OLAP employs a data warehouse, which consolidates multiple data sources for building an integrated multidimensional database.
- OLTP systems are designed for use by frontline workers like cashiers, tellers, etc., while OLAP is used by business analysts and data scientists.
- OLTP systems modify data, balance read and write, require relatively little storage, and need frequent and concurrent backup. OLAP systems do not modify data, are read-intensive, need significant storage, and can be backed up less frequently.
OLTP use cases
OLTP systems facilitate real-time transactions in a variety of applications, including e-commerce, banking, reservation systems, and CRM.
- E-commerce systems: OLTP handles orders, payments, and inventory, underpinning customer service, loyalty, and growth initiatives. For example, an OLTP database keeps inventory data up-to-date, enabling quick order fulfillment.
- Banking and financial services: OLTP processes transactions instantly, manages customer data, and provides quick access to banking services. It ensures safe data management, multi-currency support, and reporting in platforms like online banking and ATMs.
- Reservation systems: OLTP governs online bookings and payments within the travel industry. It integrates with external systems like airline reservations and supports multiple languages and currencies, ensuring efficient data management and tailored recommendations.
- Customer relationship management (CRM): CRM systems utilize OLTP to manage customer data and interactions. It logs interactions across channels and automates sales and marketing procedures, enabling companies to concentrate on customer relationships and sales.
An efficient OLTP system ensures accurate, real-time transaction processing, boosting efficiency and customer satisfaction. Data engineers can unite OLTP and OLAP systems for a comprehensive data ecosystem. OLTP enables quick online transactions, while OLAP facilitates advanced analytics and data mining. OLTP necessitates a relational database management system (RDBMS) for data storage and modification. Some widely used RDBMS tools by data teams include MySQL, PostgreSQL, Microsoft SQL Server, Oracle Database, and MongoDB. > >
