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Commonly confused · Business Platforms & EA

SLA vs OLA vs Underpinning Contract: What's the Difference?

An SLA is an agreement between a service provider and its customer defining expected service levels. An OLA is an internal agreement between teams within the same provider that supports the SLA, and an underpinning contract is a legal agreement with an external supplier that supports the SLA.

Service Level Agreement (SLA)

Full definition
vs

Operational Level Agreement (OLA)

Full definition
vs

Underpinning Contract (UC)

Full definition
Service Level AgreementOperational Level AgreementUnderpinning Contract
PartiesProvider and customerInternal teams of the providerProvider and external third-party supplier
Legally binding?Often contractualNo, internalYes, formal contract
PurposeSet customer expectationsEnsure internal teams support SLA targetsEnsure suppliers support SLA targets
ExamplePriority 1 incidents resolved within 4 hoursNetwork team responds to escalations within 30 minutesHardware vendor replaces parts next business day
Rule of thumbOuter commitmentTargets tighter than the SLATargets tighter than the SLA
Remember it

SLA faces the customer, OLA faces your coworkers, UC faces your vendors.

Exam tip

If the agreement is between two departments of the same company, it is an OLA. In ServiceNow, SLA definitions can model SLA, OLA, and underpinning contract types.

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