Operational Level Agreement: Definition, Purpose and Benefits

Natalí Valle July 11, 2024
- 9 min read


Have you ever wondered how internal teams in an organization stay on the same page? Operational Level Agreements (OLAs) are the essential tools that make it happen.

Originating within organizations to streamline interactions and clarify responsibilities, OLAs are especially common in IT departments. They help tackle everyday challenges like miscommunication, overlapping duties, and inconsistent IT Service Management (ITSM). OLAs act as the playbook that ensures everyone knows their role and works together smoothly.

In this article, we'll explore what OLAs are all about, why they matter, and how to create and implement them effectively. We'll break down their key components and show how they work hand-in-hand with Service Level Agreements (SLAs).

What are Operational Level Agreements?

An Operational Level Agreement is an internal contract within an organization that defines the responsibilities, relationships, and expectations between different teams or departments.

Unlike a Service Level Agreement, which outlines the service standards expected by external clients, an OLA focuses on ensuring smooth internal operations to support the delivery of those services.

OLAs clarify roles and responsibilities within an organization. By establishing clear expectations and communication channels among teams, they help streamline processes and enhance overall Service Management. They are essential for effective service delivery, as they improve collaboration and ensure that every team knows what is expected of them.

Benefits of Operational-Level Agreements

Enhanced service delivery

One of the primary benefits of OLAs is improving service quality. By establishing clear expectations for response times, escalation procedures, and other critical aspects of service delivery, OLAs ensure that internal teams work together efficiently. This collaboration leads to faster issue resolution and higher service standards.

Conflict resolution

Internal team conflicts often arise from overlapping responsibilities or misunderstandings. OLAs help mitigate these issues by clearly defining roles, thus reducing disputes and ensuring that everyone knows their specific tasks and limits.

Performance tracking

OLAs also play a crucial role in tracking an organization’s performance. By outlining help desk metrics and performance indicators, OLAs enable organizations to measure how well internal teams are performing. Teams benefit from this because it helps them identify areas for improvement and ensures that teams meet their objectives.

Preparing an Operational Level Agreement

Essential components

  1. Scope of services: Define the scope of services, processes, or departments the agreement covers, ideally, in a service catalog. This ensures that everyone understands the areas for which they are responsible.

  2. Roles and responsibilities: Establish clear roles and responsibilities for each team member or department. For instance, within a customer service department or help desk, one team might handle inquiries, complaints, and technical support. This helps prevent misunderstandings and ensures that everyone in the team knows what is expected of them.

  3. Service level expectations: Outline service level expectations, including uptime, maintenance windows, response times, and resolution times. For example, a response time expectation might be that IT support will respond to critical issues within 15 minutes and resolve them within an hour.

  4. Performance metrics: Metrics might include the number of tickets resolved within the SLA, customer satisfaction scores, or system uptime percentage. These benchmarks help measure the effectiveness of a team and overall service delivery.

  5. Escalation procedures: Determine escalation procedures and communication channels. Any unresolved issues at a lower level should be escalated to the appropriate authorities. For example, if frontline or tier 1 support doesn't resolve a user complaint within 24 hours, it should escalate to a supervisor.

Service provider considerations

  1. Responsibilities and expectations: Identify the service provider’s responsibilities and expectations. This clarity ensures that the service provider knows what is expected of them and can deliver accordingly.

  2. Communication channels: Establish clear communication channels and reporting requirements. Effective communication is crucial for the smooth operation of services.

  3. Relationship with SLA: Define the SLA and how it relates to the OLA. While the SLA sets the standards for external service delivery, the OLA ensures that internal teams can meet those standards.

Key elements of an OLA

Performance metrics and reporting

  1. Key Performance Indicators (KPIs): Establish KPIs to measure service delivery. These indicators help in evaluating the performance of internal teams.

  2. Reporting requirements: Define reporting requirements and frequency. Regular reports and dashboards ensures that any issues are identified and addressed promptly.

  3. Productivity metrics: Identify metrics for evaluating team or department productivity. These metrics help in understanding how well the teams are performing and where improvements can be made.

Roles and responsibilities

  1. Clear definitions: Clearly define each team member’s role and responsibilities. This clarity prevents misunderstandings and ensures that everyone knows what is expected of them.

  2. Day-to-day tasks: Establish daily tasks and expectations. This helps ensure that all routine tasks are carried out effectively.

  3. Overlaps and conflicts: Identify areas of overlap and potential conflict. By addressing these areas, organizations can prevent disputes and ensure smooth operations.

Implementing and managing OLAs

OLAs best practices

  1. Standard process and template: Establish a standard process and template for preparing OLAs. This standardization ensures consistency and efficiency in creating OLAs.

  2. Stakeholder involvement: Involve all relevant stakeholders in the preparation and review process. This involvement ensures that all perspectives are considered and that the OLA is comprehensive.

  3. Regular reviews and updates: Regularly review and update OLAs to ensure they remain relevant and effective. As organizational needs change, OLAs should be updated to reflect these changes and foster continual service improvement.

Overcoming implementation challenges

  1. Resistance to change: Address potential resistance to change from internal teams. Effective communication and involvement of all stakeholders can help in overcoming resistance.

  2. Clear communication: Ensure clear communication and buy-in from all stakeholders. This buy-in is crucial for the successful implementation of OLAs.

  3. Training and support: Provide training and support to help teams understand and implement OLAs. This support ensures that teams are well-prepared to follow the OLA.

Service Level Agreements vs. Operational Level Agreements

When diving into service management, it's crucial to understand the distinction and interplay between OLAs and SLAs. Both play pivotal roles but focus on different aspects of service delivery.

Service Level Agreements

SLAs are contracts between a service provider and its external clients, detailing the expected level of service. They outline specific metrics like response times, uptime, and overall service quality, setting clear expectations for clients.

For instance, an SLA might state that a company’s IT support will resolve critical issues within an hour. These agreements ensure clients know what to expect and hold the service provider accountable.

Operational Level Agreements

OLAs, on the other hand, focus on the internal processes that support the fulfillment of SLAs. They define the responsibilities and interactions between internal teams to ensure the smooth delivery of services.

For example, an OLA might specify that the IT department will notify the network team within ten minutes of a critical system failure, ensuring a rapid response.

Complementary roles

While SLAs focus on meeting client expectations and maintaining service quality, OLAs establish the internal processes and collaboration necessary to deliver those services. Both OLAs and SLAs are essential for effective Service Management.

The OLA ensures that the internal teams can meet those standards by working together efficiently. It outlines the roles, responsibilities, and workflows required to support the SLA.

For instance, if the SLA promises a certain uptime percentage, the OLA will detail the steps the IT, network, and support teams need to take to achieve this goal. This internal alignment is critical for maintaining the service levels promised to clients.


OLAs are critical to Service Level Management, ensuring that internal teams work together effectively to deliver high-quality services. By understanding the benefits and key elements of OLAs, organizations can improve collaboration, service delivery, and overall performance.

Effective OLAs lead to better service quality, reduced conflicts, and enhanced performance tracking, all contributing to the organization's success.

In conclusion, OLAs play a vital role in it s by clarifying roles, setting expectations, and establishing performance metrics. By implementing and managing OLAs effectively, organizations can ensure that their internal operations run smoothly, leading to improved service delivery and higher client satisfaction.

Read other articles like this : ITSM, Service Level Management

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