The Operational Level Agreement is an agreement between an IT service provider and another part of the same organization. This could be the development team, the support team or helpdesk.
An OLA defines and supports the IT service provider's delivery of services to its consumers.The OLA defines the particular goods or services to be supplied and the responsibilities of both factions. The factions also include the process and timeframes for delivery of their services. A good example of an OLA could be between the Service Desk and a support group to provide Incident resolution in agreed times such as fixing bugs in a web application.
Although SLA and OLA seem similar they are not interchangeable. The purpose of the OLA is to help guarantee that the groundwork activities that are performed by a number of support team components are clearly aligned to provide the intended SLA. OLA's are always put in place first, otherwise it's very difficult to go back and engineer agreements between the support teams to delivery the SLA.