An operational level agreement (OLA) is a contract that defines how various IT groups within a company plan to deliver a service or set of services. OLAs are designed to try and solve the problem of IT silos by setting specific criteria and defining a specific set of IT services for which each department is responsible. It should be noted that the term Service Level Agreement (SLA) is used in many companies when discussing agreements between two internal groups, but according to the Information Technology Infrastructure Library (ITIL) framework for best practices, as follows should be called an internal contract. This relationship involves working closely with others to set realistic expectations about the services and associated logistics. An OLA can help you manage relationships with the people you serve internally.
Examples of Operational Level Agreements
OLAs require that you make important promises to internal customers. Their ability to generate revenue depends on your ability to deliver on the service and hardware. For example, each OLA must guarantee that the customer does not experience more than a certain amount of downtime.
Let's look at a hypothetical example of an OLA between an IT vendor and an Internet Service Provider (ISP) to illustrate the point:
As you can see, the SLA dramatically depends on the promises and limitations outlined in the OLA. Because of their complexity, you must draft, negotiate and finalize your OLA and include certain key terms that protect your company's fiduciary interests.
General Terms in OLAs
Like any contract, OLAs contain certain essential provisions that establish the terms and conditions of the relationship, such as roles, responsibilities, and boundaries. While OLAs include many of the same components found in a standard contract, some clauses make them unique.
Types of Operational Level Agreements
Operational level agreements often work in conjunction with certain other contracts. This strategy gives the SLA provider assurance to external customers, making it even more important to review and negotiate OLAs beforehand. Both arrangements also protect the rights of each party during the relationship. There are three types of contracts generally involved in operational level agreements:
Type 1. Service Level Agreement (SLA): SLAs are contracts between a service provider and an external customer. They specify the scope and quality of the services covered. An SLA establishes the deadline by which tickets must be accepted and resolved prior to escalation.
Type 2. Operation Level Agreement (OLA): OLA is an agreement between an internal service provider and an internal customer. They specify the scope and quality of services covered by the contract, including ticket response times and server availability.
Type 3. Underpinning Contracts (UCs): UCs are contracts between an external provider and an internal customer. They define the scope and extent of the services covered. One UC tracks performance similar to Ola.