OLA Full Form

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:

  • An IT vendor supports the database for Company A, an ISP Company A provides Internet SLAs to external customers.
  • Company A signs OLA with IT database vendor
  •  IT vendor OLA says they must provide 23 hours of daily uptime
  • Company A can claim financial damages for excessive downtime
  • Conversely, IT vendors who meet standards will retain customers

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.

  • General Overview: This section of the OLA sets the stage for the relationship, identifies the parties, and establishes the objectives of the relationship. You should include references to accountability, roles and responsibilities. The general overview also delineates the start and end date of the contract.
  • Scope of Service: This section presents the technical description of the service provided. It should also account for updates and upgrades and works that go beyond Ola's scope.
  • Service Dependencies: In this provision, list the ancillary services that depend on the vendor's deliverables. This clause may also weigh heavily on the technical aspects of this agreement.
  • Problem Management: If an incident occurs, the internal customer also needs reasonable assurance that you can handle them. A problem management section allows the IT vendor to list 'what-if' scenarios and communicate contingencies and actions to resolve the issues discovered.
  • Service Exception: This provision is important because it also limits the scope and depth of your relationship in terms of incident and problem management. It is unfair that a seller solves problems beyond his control. Outline the exceptions in this section.
  • Metrics and Goals: Key Performance Indicators (KPIs) are an important component of the OLA relationship. The company should request that the vendor monitor specific metrics and make them available to key team members.
  • Responsible Party: If a problem arises, the internal customer needs to know how to contact the responsible parties. In this section, sellers must include the names, hours, telephone numbers and emails of persons they can reach.
  • Roles and Responsibilities: This section describes how all involved parties play a role in service delivery. Describe changing training measures, meeting times and notification measures. You should also include activities the seller should participate.
  • Incident Management: There should be transparency between vendors and service providers. This section of your OLA should list standard requisition and ad-hoc requests and how they agree to process them. It is important to divide the process on the basis of normal and major events.

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.