OLAP (On Line Analytical Processing):
A database holds records (rows of data) as they were entered by users (ex: cash register, manual entry of data from a sheet of paper) or by machines (electronic counter on a conveyer) or by a user with a machine (bar code reader). Very few people look at the raw data except to make corrections. Most data consumers want to look at sub-totals. A DATA CUBE is a database of sub-totals. To do so, there are members of dimensions that are hierarchized.
Imagine that you have millions of such records, the analysts need sub-totals (quantities and/or amounts) by date, by location, by product. That is what is done in a data cube. You end up with a database of sub-totals.
An OLAP application is not a database in which you enter data, it is an application that reads one or more databases, combines the data and generates sub-totals
After "dimension" and to finish this presentation, I need to impose on you two more terms: members and hierarchy.
The data sits in a data warehouse (centralized database like Oracle, Sybase, SQL server, Access) or in many different databases. The OLAP application can either extract the data from the database or can read text files downloaded from the database. It then creates the data cubes overnight on a server accessible to analysts and report designers. The data cubes can be immense or small, can serve corporate or departmental needs.
Reporting, Analyzing and Charting
Once the data is organized, one has to design analysis and reports. To this end, Excel is the best tool. With Excel and the add-in created by Essbase, you will be creating a reporting framework that is convivial to users. I have worked downstream form Essbase and I consider this "team" (Excel/Essbase) to be the best tool for data analysts, report designers and users who need to issue reports daily, weekly and yearly.
Essbase is not cheap and remember that you might have to hire a team of experts to maintain the data cubes. If you already have a single database you might not need to resort to a data warehouse or an OLAP application.