An operational service agreement, also known as an operating level agreement, is a contract that a service provider uses to define how internal users should meet service level agreements. Service level agreements (SLAs) are contracts between a customer and service provider that allows companies to track progress and performance of a service.

Operational Service Agreements

Operational service agreements contain service targets or objectives. They track internal service commitments, such as:

  • Server availability to support multiple applications
  • IT response times for problems or incidents

Operational service agreements and service level agreements differ in the commitments they represent. For instance, an operational service agreement defines an organization's commitment to internal groups, while a service level agreement outlines the commitment to the client. As such, the operational service agreement involves a smaller target group and contains more technical detail.

Among IT companies, an operational service agreement defines the relationship between a certain part of a company and an IT service provider. At the operational level, the agreement describes relationships between:

  • Support groups
  • Service desks
  • Network management
  • Operations management
  • Incident resolution

The operational service agreement outlines how the various IT groups within a company will deliver services, thus addressing problems by setting forth certain criteria and defining the unique roles of each department.

Many companies incorrectly use service level agreements for internal groups, but the Information Technology Infrastructure Library states that an operational level agreement is the best framework for this situation.

If any terms or conditions contained in the agreement are violated by either party, that party must face consequences, including legal action.

Components of the Operational Service Agreement

Every operational service agreement should start with a general overview, which achieves three main goals:

  • Highlights the document's objectives
  • Outlines the agreement's goals
  • Reaffirms the agreement's purpose among all parties involved

The agreement will list all parties responsible, including stakeholders. You can complete this section by including everyone's name, title, and role.

Next, detail the services and charges. This section should include:

  • The scope of work (SOW)
  • Customer requirements
  • Service hours
  • Operational hours
  • General service terms

The operational service agreement should also discuss service provider roles and responsibilities, which identifies every external or internal provider in detail. Topics to include in this section are:

  • Service requests
  • Work requests
  • Problem management
  • Incident management
  • Service maintenance
  • Change management
  • Service exceptions

Finally, the agreement should include a section on reporting, reviewing, and auditing. Provide a timeline or schedule for reviews, audits, and reporting based on the project's needs.

Tips for Structuring an Operational Service Agreement

It's important to structure your operational service agreement properly. We've compiled a list of tips to help.

  • Outline the document's purpose in one or two paragraphs
  • List all people and entities involved in service management, as well as SLA fulfillment
  • Include information about existing challenges and how the agreement can help resolve them
  • Include at least one service target and a compliance target
  • Include milestones with associated actions, if desired
  • Outline the communication method all parties must adhere to during the agreement term
  • Describe service operations in detail, including service hours and hours of operation
  • Detail terms and conditions
  • Indicate each signer's authority
  • Attach appendices with additional information as needed

When working in multi-sourced environments, which involves multiple parties of both internal and external providers, be sure to draft an internal operational service agreement. From there, you can:

  • Set expectations, noting how each relationship brings its own challenges and talents to the table
  • Control the process for achieving service delivery requirements
  • Discuss the agreement early and often with all involved service providers
  • Be precise and include specific interactions in the operational service agreement
  • Take ownership and remain accountable to your clients from start to finish
  • Routinely evaluate performance using metrics and reporting specifics outlined in the agreement's best practices

Agreement Readiness

How can you be sure your organization is ready to use the operational service agreement across external and internal teams? There are a few things to consider, such as whether you have an SLA in place with clients and whether vendors are involved when you deliver services. You can also consult with a lawyer to ensure you've covered all your bases.

If you need help drafting an operational service agreement, post your job on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.