How to digitize a software licence agreement

Find out how digitizing software licence agreements can help you close deals faster and empower the business to self-serve.

This deep dive looks at who software licence agreements affect, why they might want to digitize them and how to do it. Use the navigation below to find out more, or explore our deep dives on other contract, like MSAs and SaaS agreements.

What’s a software licence agreement? | Who do they affect? | What’s the manual process for software licence agreements? | How to digitize software licence agreements | Useful features | Handy integrations | Learn more

What’s a software licence agreement?

A software licence agreement is a contract that gives a person or business the right to use software that is legally owned by someone else. These agreements allow the licensor to control usage of the software, protect legal ownership and shape commercial relationships. 

Software licence agreements can often be confused with software-as-a-service (SaaS) agreements; the terms are often used interchangeably, but there’s a slight difference. Traditionally, software was offered under a licence and not delivered as a service. With SaaS, the software usually lives in a central cloud server; the business still runs the software and grants users access to it. 

Who do software licence agreements affect?

The stakeholders affected by the software licence agreement workflow usually include: 

  • The sales team, who is responsible for sending the contract to the prospective customer. 

  • Legal counsel, who review the commercial terms and approve changes to standard positions. 

  • Approvers, who are usually from various teams – sales, finance, or even C-suite, depending on the value of the contract.

  • Customers, who negotiate and agree terms within the contract.

  • Authorized signatories, who vary from business to business.

What’s the manual process for software licence agreements?

Microsoft Word is the go-to for most documents in a business, so it’s hardly surprising that Word is also used for contracts. But as a key component in the manual contract workflow, Word creates more problems than solutions. The process usually goes something like this:

The legal team creates a template of the software licence agreement in Word, saving it on a shared drive. A member of the sales team finds the template, downloads it (hoping it’s the correct version), and updates terms to reflect recent conversations with the customer. 

They’ll email the agreement to the legal team for review, which can often lead to a painful back and forth exchange as terms are edited, with no clear audit trail of changes. Eventually, the salesperson will convert the contract to PDF and send it for signing. This might be done using an eSignature tool like DocuSign or could be an extremely manual process of printing, signing and scanning. 

And that’s assuming the customer signs right away. If the customer comes back with negotiations of their own, these will need to be sent to the legal team for review and approval. It’s usually at this point legal notices that the version of the software licence agreement is outdated. More revisions ensue, causing friction between teams, before the contract is finally signed, emailed to all stakeholders and saved in a shared drive. 

How to digitize software licence agreements

Create your templates, enable self-serve

In a digitized software licence agreement workflow, contract admins can create templates and empower other teams in the business to self-serve. In a contract collaboration platform like Juro, this can be done with a Q&A flow, through which users answer a series of questions to quickly and easily autopopulate the contract with relevant information. 

A template-based workflow allows legal counsel to own the key terms in a software licence agreement. This is useful if legal wants to prevent salespeople from deviating from set terms. Templates can also help legal manage version control; if there’s only one source of truth, then contracts can’t be created based on past commercial positions or featuring outdated terms. 

Printing, signing and scanning is a process of the past; sign securely anywhere, at any time, from any device, with your native eSignature tool

Collaborate without leaving your browser

For your software licence agreement process to be fully digital, you need a contract collaboration platform that can handle internal and external negotiations in the same system. To make sure discussions with colleagues can’t be seen by the counterparty, find a platform that allows you to distinguish between internal and external comments.

Set up approval workflows

With approval workflows, you can empower the sales team to create contracts from templates, all the while giving legal admins oversight and final sign off before the agreement is sent to the counterparty. This keeps things efficient, reduces friction between teams and minimizes risk to the business.

Agree with native, mobile-responsive eSignature

With a digitized software licence agreement, printing, signing and scanning is a process of the past. Sign securely anywhere, at any time, from any device, with your native eSignature tool. Teams can close deals faster – and celebrate together, with contract signing notifications that keep everyone in the loop. After the contract is signed, it is also emailed automatically as a PDF to each party; you don’t have to lift a finger.

Manage analytics and renewals

With a well-established analytics setup, you can spot and remove the blockers in your process. Use your contract collaboration platform’s analytics dashboard to see who’s slowing down signing, how the contract lifecycle has developed since the last round of changes, and more. You can also tag important dates and set reminders to stay ahead of the game when it comes to renewals. 

Check out the ‘Modern contract handbook’, in which experts explore every stage of the contract lifecycle. 

Useful features

Look for the following features in a contract collaboration platform so that you can switch to a frictionless, digitized workflow: 

  • Locked templates. This feature is useful for legal teams defining the software licence agreement template – by locking the template, legal can prevent colleagues deviating from the latest terms.

  • Approval workflow. By defining roles for legal and signatories, an approval workflow helps legal teams prevent unsanctioned deviations from standard terms. The best approval workflows are ‘sequential triggered’, wherein multiple approvers are notified when their input is needed and the whole contract process is visible to everyone involved.

  • Smartfields. These contain contract metadata, so key fields are immediately tracked and searchable. A two-way integration with your business’s CRM ensures that data is always accurate and automatically updated – and legal don’t have to waste any more time manually inputting the same information twice.

  • Visual timeline. Track changes and variations with a design-led timeline that provides an overview of edits to approvers and signatories.

  • Internal commenting. Internal stakeholders can discuss and collaborate in real-time on the document, without having to worry about version control and audit trails.

  • External redlining. Negotiate the software licence agreement without ever having to leave your browser. All changes are tracked and kept in the same contract, so you have total visibility over edits being made.

  • Defined playbook. With conditional logic you can embed fallback positions and alternative terms in your software licence agreement template, giving teams the confidence to negotiate without introducing risk.

When it comes to empowering the sales team to self-serve, a frictionless integration with Salesforce is important

Handy integrations

  • Google Drive. An integration with the business’ shared drive ensures that signed contracts are automatically downloaded and stored in a secure, accessible location.

  • Companies House. The Companies House API helps UK users access accurate information on a business, such as its registered address or legal name, reducing the risk of human error.

  • Salesforce. When it comes to empowering the sales team to self-serve, a frictionless integration with Salesforce is important. The sales team can create contracts without having to leave their platform of choice streamlining the process and reducing friction between sales and legal. A two-way integration ensures that Salesforce remains up to date with any changes to the contract.

A frictionless, digitized contract workflow

Is digitizing software licence agreements a pain point for your company? If your business is scaling so fast that the contract process feels out of control, try Juro and enable you to agree and manage contracts in a unified workspace.

 

Topics: Software licence agreement

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