Operational Level Agreement (OLA): Meaning, Examples, Benefits, and Best Practices

Operational Level Agreements don’t get the same attention as SLAs, but honestly, they’re the quiet backbone of how services actually run. When things work smoothly inside an organization—tickets resolved on time, systems stable, teams aligned—there’s almost always a solid operational level agreement working behind the scenes.

This guide breaks down what an operational level agreement (OLA) is, how it works, how it differs from an SLA, why ITIL emphasizes it, and how teams can create and manage OLAs that actually help instead of becoming dusty documents no one reads.

Operational Level Agreement Meaning

An operational level agreement is an internal agreement between teams within the same organization. It defines roles, responsibilities, performance expectations, and dependencies required to support a service.

Unlike an SLA, which is customer-facing, an OLA focuses inward.

In simple terms:

• SLA = promise to the customer
• OLA = promise between internal teams to keep that customer promise

Without OLAs, SLAs usually fail. Not because teams don’t care—but because expectations aren’t clear.

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What Is an Operational Level Agreement (OLA)?

An operational level agreement (OLA) is a documented agreement between internal service providers. These may include IT support, infrastructure teams, application teams, security, or even non-IT departments like HR or facilities.

An OLA defines:

• who does what
• response and resolution timelines
• escalation paths
• dependencies between teams

It ensures everyone knows their role when a service is delivered or an incident occurs.

Why Operational Level Agreements Matter

Many organizations focus heavily on SLAs but skip OLAs. That’s usually where problems start.

Without OLAs:

• teams blame each other
• issues bounce around
• response times stretch
• customers feel the impact

With OLAs in place:

• accountability becomes clear
• handoffs are smoother
• internal friction drops
• service quality improves

OLAs create structure where chaos usually lives.

Operational Level Agreement vs SLA

This comparison clears up a lot of confusion.

SLA (Service Level Agreement)

• External agreement
• Between service provider and customer
• Defines service quality, uptime, response times
• Often includes penalties

OLA (Operational Level Agreement)

• Internal agreement
• Between departments or teams
• Supports SLA delivery
• No external penalties, but internal accountability

Think of the SLA as the what and the OLA as the how.

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Operational Level Agreement in ITIL

In ITIL, OLAs are a core part of Service Level Management.

ITIL emphasizes that SLAs cannot be met unless:

• internal teams align
• responsibilities are clearly documented
• dependencies are understood

OLAs sit alongside:

• SLAs (customer-facing)
• underpinning contracts (vendor-facing)

Together, these three create a complete service management structure.

Key Components of an Operational Level Agreement

A strong OLA isn’t complicated, but it must be clear.

1. Scope of the OLA

This defines:

• which services are covered
• which teams are involved

Ambiguity here causes disputes later.

2. Roles and Responsibilities

Each team’s duties must be clearly outlined.

This avoids:

• duplicated effort
• missed tasks
• “not my job” situations

Clarity is everything.

3. Performance Targets

These are internal targets aligned with SLA goals.

Examples include:

• incident response time
• resolution time
• availability targets

They should be realistic and measurable.

4. Escalation Procedures

When something goes wrong, escalation must be predefined.

An OLA should specify:

• when to escalate
• to whom
• how quickly

This prevents delays during high-pressure situations.

5. Communication Methods

OLAs should define:

• tools used (ticketing systems, email, calls)
• reporting frequency
• status update expectations

Good communication prevents misunderstandings.

6. Review and Improvement Cycle

OLAs should not be static.

They must include:

• review schedules
• performance analysis
• improvement actions

Continuous improvement keeps OLAs relevant.

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Operational Level Agreement Example

Here’s a simplified operational level agreement example.

Service: Email System
Teams Involved: IT Support, Infrastructure, Security

• IT Support logs and categorizes incidents within 15 minutes
• Infrastructure investigates server-related issues within 30 minutes
• Security handles suspected breaches within 10 minutes
• Escalation to management after 60 minutes of unresolved issues

This internal alignment ensures the customer-facing SLA is met.

Operational Level Agreement Template (Basic Structure)

A typical operational level agreement template includes:

1. Document overview
2. Purpose and scope
3. Teams involved
4. Roles and responsibilities
5. Performance targets
6. Escalation process
7. Reporting and review
8. Approval and sign-off

The template should be simple, not legalistic.

Benefits of OLAs

The benefits of OLAs go far beyond documentation.

Improved Accountability

Everyone knows their role and deadlines.

Faster Issue Resolution

Clear handoffs reduce delays.

Reduced Internal Conflict

Disputes decrease when expectations are written down.

Better SLA Performance

OLAs directly support customer satisfaction.

Stronger Cross-Team Collaboration

Teams work together instead of in silos.

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Common Use Cases for Operational Level Agreements

OLAs are especially useful in:

• IT service management
• Incident and problem management
• Change management
• Cloud operations
• Enterprise support environments

Any area with interdependent teams benefits from OLAs.

Practices to Manage OLAs Effectively

Creating an OLA is only half the job. Managing it properly matters more.

Keep OLAs Practical

Avoid overcomplicating. If people can’t understand it quickly, they won’t use it.

Align OLAs With SLAs

OLAs must directly support SLA targets.

Misalignment creates failure points.

Involve All Stakeholders

OLAs should be agreed upon, not imposed.

Buy-in improves compliance.

Review Regularly

Business needs change. OLAs must evolve too.

Measure What Matters

Track metrics that reflect real performance, not vanity numbers.

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Operational Level Agreement vs Underpinning Contract

Another common confusion.

• OLA: internal agreement between teams
• Underpinning Contract: agreement with external vendors

Both support SLAs, but only OLAs manage internal dependencies.

Challenges in Implementing OLAs

OLAs aren’t always easy to implement.

Common challenges include:

• resistance from teams
• unclear ownership
• unrealistic targets
• lack of leadership support

These issues are cultural, not technical.

How to Overcome OLA Challenges

Successful organizations:

• involve leadership early
• keep OLAs simple
• focus on collaboration, not blame
• treat OLAs as living documents

Culture matters more than paperwork.

OLAs Outside IT

While OLAs are common in IT, they also work in:

• HR service delivery
• finance operations
• customer support
• facilities management

Anywhere teams depend on each other, OLAs help.

Measuring OLA Performance

OLA performance can be tracked through:

• response time metrics
• resolution times
• handoff delays
• internal satisfaction surveys

Data should drive improvement, not punishment.

Are OLAs Mandatory?

OLAs are not legally required, but operationally essential.

Organizations without OLAs often rely on informal understanding—which breaks down under pressure.

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Operational Level Agreement Best Practices Summary

To make OLAs work:

• write them clearly
• align with SLAs
• review regularly
• focus on collaboration
• keep them realistic

OLAs should help teams succeed, not restrict them.

Final Words on Operational Level Agreements

An operational level agreement may never be seen by customers, but it directly shapes their experience. It turns vague expectations into clear commitments between teams. When done right, OLAs reduce friction, speed up service delivery, and make SLAs achievable instead of aspirational.

In modern organizations where services are complex and interdependent, OLAs aren’t optional anymore—they’re essential.

FAQs: Operational Level Agreement