What Are OLAs? Guide to Operational Level Agreements

Operational level agreements (OLAs) are contracts that define the expected services, metrics, and responsibilities between internal teams and departments within an organization. Well-crafted OLAs help align disparate business units and provide the framework for meeting external service level agreements (SLAs).

What Exactly Are OLAs?

OLAs are agreements that document the performance standards and delivery expectations between internal support groups and operational units. By clarifying hand-offs, dependencies, metrics, reporting, and workflows between departments, OLAs enable cohesion and coordination.

OLAs provide specifics on elements like:

  • The services each team or group will provide to the other
  • Turnaround times, response times, and other quantifiable metrics
  • The roles and responsibilities of each department or team
  • The procedures and workflows for fulfilling requests
  • The scope or constraints around provided services
  • Reporting requirements and cadence

Some common examples of internal teams that adopt OLAs include IT, operations, customer support, engineering, security, and more. The OLA details how these groups will effectively work together.

Distinguishing OLAs from SLAs

OLAs govern services between internal groups, while service level agreements (SLAs) define the relationship and obligations to external customers or clients. SLAs make commitments to users or customers. OLAs enable those SLA commitments to be met through coordination.

For example, the IT department may have an SLA requiring 99% uptime for a key customer-facing software system. The operations team would then have an OLA agreement with IT to perform routine maintenance, monitoring, backups, and other standards to support meeting the 99% uptime SLA.

Why Are OLAs Important?

OLAs provide numerous benefits that improve operational efficiency and cohesion, including:

  • Eliminating ambiguity around task ownership to prevent gaps in service
  • Forging agreement on shared language and metrics across the business
  • Identifying hand-offs and procedures for smooth cross-department workflows
  • Determining measurement standards for continuously monitoring performance
  • Enforcing accountability with quantified metrics and reporting
  • Proactively detecting potential deficiencies or bottlenecks
  • Optimizing coordination to enhance productivity and continuity

By defining responsibilities, dependencies, and objectives between teams, organizations can align efforts to achieve optimal execution.

Must-Have Elements of an Effective OLA

To maximize value, OLAs should clearly define:

Services – All services to be provided between groups, described specifically. For example, daily automated reporting, troubleshooting response, needs assessment, audits, etc.

Metrics – Quantitative metrics like resolution time, uptime, number of requests processed, etc. that indicate performance standards.

Roles and Responsibilities – Each party’s responsibilities related to fulfilling the OLA and providing services.

Procedures – Steps, workflows, approvals routing, and hand-off processes for smooth execution.

Scope – Boundaries or constraints around provided services, like business hours or support tiers.

Reporting – Format, frequency, and recipients for reports summarizing performance data and metrics tracking.

Implementing thoughtful OLAs between business units, IT, operations and supporting teams lays a foundation for consistency, alignment, and performance. The clarity provided by OLAs is invaluable for overall organizational success.