Service Level Agreement

How Are OLA and SLA Connected?

The article explains the meaning of Operational level agreement and Service-level agreement (SLA). It discusses the relationship between the two.

An Operational-Level agreement, or OLA, describes the interdependencies of a service-level agreement. The new-age technology-driven business environment is managed by multiple support groups. For smooth operation and perfect synchronization of these support groups, it is extremely important to maintain agreeable terms. Thus, the objective of the Operational Agreement is to establish this cohesion by clearly defining the responsibilities of each of the partners to run a specified process within a particular timeframe.

Any organization to deliver superior IT service management evaluates the infrastructure performance with respect to three principal indicators. These indicators are Service Level Agreements (SLAs), Operational Level Agreements (OLAs), and Underpinning Contracts (UCs).  This helps them to maximize IT productivity and also to minimize cost.

Relation between OLA and SLA 

There is a strong link between OLA and SLA. Though they are connected, they are two different tools for managing IT infrastructure performance. These are becoming increasingly important for organizations going through digital transformation to clearly understand OLA and SLA to ensure quality service to the end-users.

What is a Service Level Agreement?

A Service-level agreement (SLA) is a contract between the service provider and its customers. It lays out what type of service will be provided to the customers. It also includes service providers’ commitment to an exact quality standard.

Service Level Agreements or SLA is a form of external agreement binding the service provider and the customers. Following this agreement organization monitors whether the service provider is adhering to the commitment to quality. It assesses its performance and progress against such commitments. If the agreement specifies service targets, which the service provider has failed to achieve, it will be liable to pay penalties for non-compliance with the service agreement.

The scope of OLA on the other hand includes,

  • Guaranteeing consistent levels of quality, especially in a multi-sourcing environment
  • Ensuring transparency across all levels of the organization including  the customers
  • Laying out the standards of accountability for all the parties involved

To fulfil this objective, OLA lays out a clear-cut, precise, and also quantifiable depiction of the service provider’s internal support relationships between different support groups. OLA is further classified into three sub-parts. These are – organizational-level agreements, operating-level agreements, and operations-level agreements.

Thus, the scope of OLA is to make sure that the supporting activities which are executed by different support teams are properly aligned to comply with the intended SLA. However, if OLA fails to ensure that, it becomes extremely difficult for organizations to go back and establish the sync between the support teams to deliver the SLA.

Thus, OLA plays an instrumental role to reach a common agreement and establish good practices. 

Is Your Organisation Ready for Ola Agreement?

Your company should require an OLA agreement:

  • When you need collaboration within separate operational groups
  • If you have to prepare a vendor agreement as well in order to serve consumers
  • When you need to improvise on service aspects, such as the extension of guarantee schemes, revision of price schemes etc.

OLAs & Multi-sourcing

OLA s needs to be carefully drafted if your business requires multi-sourcing agreements.  You need to draft an internal document which can be referred to by the internal stakeholders at the same time, an external agreement can cater to the stakeholders in the market.

SLA Mandates for OLAs

While preparing an OLA, one needs to be careful in terms of documenting the format. Such a document requires expertise and domain knowledge to be prepared. Once you identify a need, a professional vendor can be engaged for the given purpose. Terms and conditions applicable shall have to be clearly spelt out, so as to allow clarity of approach.

A Quick Summary

  •    Service Level Agreement or SLA emphasises the service part of the agreement, like the total time of services and performances. On the contrary, an Operational Level Agreement or OLA is a contract that’s prepared with respect to maintenance and other services.
  •  SLAs are basically an agreement between a client/customer and a service provider. There are agreements made between the internal support groups of an institution that also supports SLA.
  • When comparing the two related to their target groups, SLAs have larger ones and OLSs have smaller ones.
  •  The SLA links the service providers to the customers. However, this isn’t the same with OLAs.
  • The Operational Level Agreements or OLAs are a lot more technical than the SLAs or Service Level Agreements.

Conclusion

In today’s technology-driven era, staying relevant about everything around is necessary. Also, everyone should be able to manage IT services exceptionally. So, learning about OLAs and SLAs will only keep you ahead of the rest. If you own a service-related business, learning more about service level agreements like SLAs and OLAs is crucial.

To sum it up, as are the Operational Level Agreements and SLAs are the Service Level Agreements. The one thing that connects these two is the fact that both of them are legally binding. SLAs focus on the agreement’s service part, for instance, the performance and the services. OLAs, on the other hand, are a contract that’s done in accordance with the maintenance of service. We hope that this article will come in handy whenever you would like to learn more about the differences between the two in the future.

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