Operation Level Agreements Explained!

Standardized Legal Documents Operation Level Agreements Explained!

Everything You Want To Know About Operation Level Agreements in One Place

The majority of people find legal documents too complicated to write or review—and operation level agreements are no different.

While you may be struggling to understand how operational level agreements work now, you won’t have any questions after reading this article.

You will learn:

  • What operational level agreements (OLAs) are
  • Why these agreements are important
  • How to write your operational level agreement without any help

What Are Operational Level Agreements?

Operational level agreements—or operating level agreements—are business contracts that service providers use when under an existing service level agreement (SLA). The purpose of an OLA is to make sure the company’s internal sectors are upholding the SLA terms and conditions.

A solid OLA is specific and includes detailed information about:

  • What each sector’s job within the service provider company is
  • Who has the authority to sign the agreement
  • What services are being provided to a customer under the SLA
  • How errors will be fixed
  • What the methods of communication between team members are 

Operational level agreements—and service level agreements—are used primarily in IT and tech sectors, but any company that provides a service to a client also benefits from incorporating an OLA into its operations. 

An operational level agreement isn’t necessary, but it’s highly beneficial. It ensures that the terms and conditions of an SLA will be met by each internal group within an organization.

Differences Between a Service Level Agreement and Operational Level Agreement

Since operational level agreements are inherently related to service level agreements, you may be confusing the two and the purposes they serve.

If you want to create an OLA for your company, you have to know why the agreement isn’t the same as an SLA. You should also understand how the OLA helps you honor the SLA you’re using.

Check out the main differences between the two:

Service Level AgreementOperational Level Agreement
  • Is between a service provider and a customer
  • Defines all the services the company provides the customer with
  • Identifies the penalties the service provider will suffer if it violates the agreement
  • Is made and used by internal groups within a service provider company
  • Specifies which internal sectors provide which type of service
  • Details the risk factors and risk management techniques 

How To Write an Operational Level Agreement

If you want to draw up an operational level agreement yourself, follow the instructions we give you.

Here are the sections you should include in your OLA:

  1. Purpose of the agreement—Write what the purpose of the OLA is in simple language. You should mention that the agreement exists to uphold a specific service level agreement
  2. Objectives—This section serves to include more detailed objectives you have. List your service targets and describe the services you’re providing to a customer
  3. Service operations—Define what operations will be carried out to meet the objectives. State the days and hours during which the service will be available
  4. Parties involved—State what internal sectors are involved in the operations. You should assign specific job requirements for each sector and the team members within the sectors 
  5. Communication methods—Establish the communication tools the internal groups will use
  6. Existing challenges and possible risks—State the challenges your company is facing at the moment and provide solutions your sectors should start implementing when the agreement goes into effect. Include any issues that may arise in the future too and the type of issues that will require escalations
  7. Service accounting—Define who will be responsible for calculating the cost of the services provided and create the accounting schedule 
  8. Duration of the agreement—Write the agreement start and end date
  9. Changes to the OLA—In this section, you should write how the changes to the agreement will be proposed and then incorporated
  10. Termination of the OLA—You also want to write the rules for terminating the OLA
  11. Signatures—Besides leaving a space at the end of the agreement for signatures, you should also define the authority all the signatories have

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