Service Level Agreement (SLA): An SLA is the agreement between an IT Service Provider and a Customer. The SLA describes the IT Services, documents Service Level Targets, and specifies the responsibilities of the IT Service Provider and the Customer. A single SLA may cover multiple IT Services or multiple Customers.
Operational Level Agreement (OLA): An Operational Level Agreement (OLA) is a contract defined between the various departments within an organization to ensure on-time delivery of Services to the Customer. OLAs are designed to address and solve the problem of IT silos by setting forth a specific set of criteria and defining the specific set of IT Services that each department is responsible for.
Applicability and uses:
Applicable between Incident and Work Order, and Workgroups within an Incident.
Applicable for Auto created Work Orders (only for the Work Orders created while Incidents are logged and not applicable for sequential Work Orders).
If the OLA is within an Incident, it corresponds to the Transfer Time. Example: OLA between Workgroup 1 and Workgroup 2 is 30 min. An Incident is logged at 10 AM and in the que of Workgroup 1. If it is transferred to Workgroup 2 before 10:30 AM, the OLA is considered as met. If transferred after 10:30 AM, the OLA is considered as not met.
If the OLA is made between the Incident and Work Order, it corresponds to Resolution Time. Example: OLA between Workgroup 1 and Workgroup 2 is 30 min. Incident logged at 10 AM and in the que of Workgroup 1. There is a Work Order created for this incident and is in the que of Workgroup 2. If the Work order is resolved by 10:30 AM, the OLA is considered as met. If resolved after 10:30 AM, OLA is considered as not met.
Underpinning Contract (UC): The Underpinning Contract (UC) is the agreement between an IT Service Provider and a Third Party (Vendor). The Third Party provides Goods or Services that support delivery of an IT Service to a Customer. The Underpinning Contract defines targets and responsibilities that are required to meet agreed Service Level Targets defined in an SLA.
Advantages
Documented SLA, OLA, and UC ensures no miscommunication between the Customer, Vendor, and Departments.
Better understanding of the Services provided by the Vendor.
A document to refer back to in case of any misunderstanding.
All these 3 documents should be in synch with each other to ensure all the service levels are met.