Operational Level Agreement

by Maya G

Service Level Management

The purpose of SLM is to ensure that the service targets are created, negotiated, agreed upon, documented, monitored, reviewed, and reported to the customer. SLM acts as a liaison between the customer and the service provider, which sets the targets in terms of quality, time, and scope as per the SLR and SAC.

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Operational Level Agreement

The Service Level Management (SLM) process is responsible for seeking a realistic compromise between the customers’ needs, expectations, and the cost of associated services. These are acceptable by both the customers and the IT Organization. This also aims to ensure that an agreed level of IT service is provided for all current IT services and that future benefits will be delivered to agreed achievable targets. Service Level Management is also responsible for ensuring that all appropriate Operational Level Agreements and Underpinning Contracts monitor the vendors and other groups.

An operational level agreement (SLA) is an agreement between the service provider and an internal department of the same IT organization. OLAs define supporting services that have to be provided by the service provider and its internal department. An OLA should describe the services being delivered, service level targets, responsibilities of the IT Service Provider, and the interior department.

Operational Level Agreement

Operational Level Agreement

OLA definition process will also be the same as the SLA definition process, which can be mentioned as Planning, Development, Piloting, Publish, SLA Activation & Monitoring.

The planning process involves:

  • Understanding the customer's business requirements (concerning the scope of services, timeliness, etc.) and translating them into IT requirements.
  • Gather and analyze historical data from customers or previous experiences (where similar services were offered to any other customer).

The development process involves:

  • Define, develop, negotiate, and standardize SLTs for OLA.
  • Encompass SLTs in OLA.
  • Get approvals from the service provider on OLA.
  • OLA will contain details like:
    1. Start, review and end dates.
    2. Scope of services
    3. Roles and responsibilities
    4. Operational hours
    5. Holidays list
    6. Service costs
    7. Incentives and penalties
    8. Define detailed metrics, KPI, etc.

Mandatory details needed for OLA development are:

  • vendor’s name
  • vendor id
  • vendor type (elite, large scale business, medium scale business, small scale business)
  • SLA id
  • OLA id
  • SLA name
  • SLA type
  • OLA name
  • service hours
  • start date and end date
  • description of the OLA

When the internal department is unsure about the operations' realistic conditions, the interior department does the piloting before base-lining the OLAs for the next quarter or half a year.
When it’s a Greenfield project, the internal department pilots operations and observes the trends, issues, and patterns for a few months and then baselines OLAs. The service provider should keep revisiting the piloted OLAs and redefine them after the observations.

In this phase, OLAs are standardized and published. Management and stakeholders are made aware of the consolidated OLAs.

OLA activation
In this phase, OLAs are activated for the live IT operations. IT operations take the defined OLAs as a baseline and execute the IT operations.

Monitoring is the main focus of SLM, which involves:

Reactive monitoring: monitoring the weekly reports, monthly reports, quarterly reports and evaluates the quality of services.
Proactive monitoring: This is proactively advising the operations and ensuring that there are no OLA misses or breaches, preventing penalties, preventing customer escalations and threats.

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