What is an Operational Level Agreement?
Operational Level Agreements (OLAs) can be used in any area of business where different teams need to work together to achieve a common goal.
This can be a challenging task for growth-focused companies.
Also known as Operating Level Agreements, OLAs offer many benefits to teams.
We’re going to explain what they are and what you should include when creating yours.
We’ll also introduce you to how PandaDoc can help your company accelerate document creation and collaboration.
OLA meaning: What is an Operational Level Agreement?
OLA definition: A document that helps to define an agreed-upon level of service between different departments or teams within an organization.
The point of an OLA is to outline the responsibilities and expectations of team members in a transparent manner. The end goal is to promote effective communication.
So, whether you’re a manager, team leader, or individual contributor, having an OLA will increase productivity and deliver better results.
For example, a marketing team might have an OLA with the sales team since the lead generation process is often a collaborative and interdependent effort between multiple departments.
Without an OLA in place, differing priorities may mean that certain tasks are not fulfilled, thus creating bottlenecks in your processes.
An OLA helps to ensure that everyone is working towards the same goals and that service delivery is consistent across the board.
This is essential when scaling a large operation, for instance, when working with new important clients.
Why Operational Level Agreements are important
Operational Level Agreements (OLAs) are vital for several reasons:
1. Improve your service quality
OLAs exist to improve the service offered by your business.
By establishing clear expectations for response times, escalation procedures, and other critical aspects of service delivery, an OLA helps ensure your employees receive the level of support they require to succeed.
2. Resolve internal team conflicts
OLAs provide a framework for resolving internal conflicts.
For instance, they prevent arguments from arising due to overlapping responsibilities or misunderstandings about who is responsible for what.
By structuring clear communication channels, team members in different departments can easily reach out to one another to clarify expectations — ensuring that petty squabbles don’t develop into more significant problems for your HR officers.
Keep track of your organization’s performance
OLAs can be a valuable tool for measuring and improving organizational performance.
For example, OLAs often outline the metrics and performance indicators to use when evaluating team or department productivity.
This presents a clear view to supervisors for identifying areas that need improvement, and doing so in a transparent and unbiased way.
If implemented correctly, this can accelerate an operation’s effort to continuously improve the services they offer.
Operational Level Agreements promote effective communication and collaboration.
They enhance service delivery, help to resolve conflicts and enable organizations to measure and improve their overall performance.
What to include in an operational level agreement
Managers in large organizations will likely have a good idea of what to include in a team’s Operational Level Agreement.
However, if these documents are a new area for you, we’ve compiled a checklist of the basics to include:
Scope
The OLA should define which services, processes, or departments are covered by the agreement and ensure that all parties clearly understand this.
Responsibilities of each role
This part explains each team member’s role and the specific day-to-day tasks they should follow, if applicable.
Service level expectations
Critical aspects of service delivery, such as uptime, maintenance windows, response and resolution times, etc.
Performance metrics
Key performance indicators (KPIs) for each team should be established, allowing for a fair evaluation of whether the service meets the required standards.
Reporting and communication
Requirements for communication must be clearly outlined to ensure all parties are informed of service status and are aware of issues when they arise.
Escalation procedures
When issues cannot be solved at the team level, escalation procedures are set out to ensure a timely response from management.
Security
All parties should know their security responsibilities when handling customer or employee data.
An OLA should take a holistic view toward each department, ensuring everyone understands their role in delivering your company’s service to the required standards.
OLA Vs. SLA: What’s the difference?
SLA definition: A contractual agreement between a service provider and a customer that defines the responsibilities for proper service delivery.
OLAs and SLAs share some similarities. Most notably, they both set out expectations for individuals in a contractual manner.
The critical difference is that OLAs focus on internal processes within a company, whereas an SLA focuses on the customer-facing aspects of service delivery.
OLAs are typically more detailed than SLAs.
They include specific metrics and performance indicators relevant to each team involved in service delivery.
On the other hand, SLAs may include information on different types of procedures, such as how issues are resolved in arbitration between two unrelated parties.
You may also be interested in learning about Master Service Agreements (MSAs), which we cover in our what is a master service agreement? blog.
Create better agreements with PandaDoc
Operational Level Agreements are an essential team management tool as you scale your company’s operation.
In order to ensure your organization operates at peak efficiency, it’s vital to have well-defined OLAs in place, and to train your managers and staff to follow them accordingly.
However, crafting an OLA from scratch can be daunting, especially if you’re under time pressure or lack relevant experience.
Don’t worry; PandaDoc has you covered.
With hundreds of customizable templates, we can help you write the perfect agreement in minutes.
Our templates include pre-built sections for key aspects of major documents.
They also have intuitive tools that make editing text and inserting branding a breeze.
Plus, real-time collaboration ensures multiple teams and stakeholders can review drafts before finalization.
Get started with a 14-day free trial.