Inflexible software licence agreements cause friction between teams and slow down deals – how can a scalable workflow change this?
This deep dive explores software licence agreement workflows, who they affect and the benefits of making them robust enough to scale. Use the navigation below to find out more, or take a look at our deep dives on other contracts, like MSAs and SaaS agreements.
What’s a software licence agreement?
A software licence agreement is a contract that ensures a person or business can rightfully use software that is legally owned by someone else. With these agreements, the owner can control the software’s use, protect their legal ownership and strengthen commercial relationships.
Software licence agreements are often confused with software-as-a-service (SaaS) agreements – and both terms tend to be used interchangeably – but they are slightly different. Software offered under a licence allows users to install copies of the software onto their devices. SaaS allows users to access the software but the software itself lives in a central cloud.
Who do software licence agreements affect?
The software licence agreement workflow may affect different people, depending on the business, but often include:
The legal team, which often reviews commercial terms and approves edits made to the contract.
The sales team, typically responsible for sending out the contract.
Approvers, who range from salespeople to the CTO. They can be from various teams in the wider business.
Customers – they people or businesses signing up to use the software – are a vital stakeholder.
Authorized signatories, who vary across different businesses.
Download the ‘Modern contract handbook’, and see what the experts have to say about every stage of the contract lifecycle.
Why scale your software licence agreement workflow?
If you’re getting signatures on the dotted line, and changing your workflow will cause inevitable disruptions in the manual process, why bother changing it at all? What does it matter if the process isn’t scalable?
Well, it can matter a lot. As your business continues to grow, a non-scalable workflow for software licence agreements will run into plenty of problems – and fast. Here’s why:
Your software licence agreements are key to business growth. You need to close deals to deliver the aggressive, double-digit growth that most scaleups demand. As an important part of the sales process, software licence agreements are critical to this. But if your sales process isn’t optimized and involves multiple, manual systems, the legal team will soon be buried in low-value work. How will you keep pace with the rapid growth of your contract volume – from one contract a month, to ten, to fifth, then hundreds? And how will you maintain a single source of truth? To make sure you can meet your targets, it’s important to get ahead of the game and create a scalable solution to problems before they appear.
Software licence agreements need to be watertight so legal and commercial can use a scalable process to enable self-serve and handle high levels of growth
Legal doesn’t scale proportionally. At a high-growth company, the legal team will grow – the first lawyer at the business will get the go-ahead to hire a paralegal, and then a generalist, and eventually there may be a dozen lawyers. Meanwhile, the commercial headcount is scaling by the hundreds. The ratio of lawyers to salespeople will drastically change. Software licence agreements need to be watertight so that legal and commercial can use a scalable, self-serve process that can handle high levels of growth and the contract volumes that brings.
Things change. As your business scales, chances are you’ll need to update the terms in your contract to reflect these developments. Changes might include adjustments to data use terms, uptime commitments or terms following acquisitions. If your process involves digging through old archives trying to find the latest version of a document, there is a huge risk of agreeing a contract with outdated terms – and this could have serious consequences for the business. A scalable workflow, will allow you to make any adjustments to the latest documents quickly, consistently and at scale.
How to scale your software licence agreement workflow
These steps will help create a workflow that is scalable, frictionless and helps sales teams close deals faster.
Design the perfect software licence agreement
Your template will be used to serve all software licence agreements, so make it perfect! Use your contract collaboration platform’s in-browser editor to create a software licence agreement that is engaging, readable and user-focused. Foreground key terms and use tables, charts and images to add personality to your contract. The better the user experience, the quicker you’ll get signatures – and a greater chance of repeat custom.
Enabling the sales team to self-serve has huge benefits: legal can save on low-value contract admin and dedicate time to the tasks that really matter
Create your playbook
Make sure you recognize the points where you’re willing to concede – this will speed up negotiations and streamline the process overall. Can customers signing high-value contracts negotiate on certain terms? Does it depend on the size of the business, and if so, what are your limits? Codify this information in a playbook so contract creators have the confidence to negotiate without legal’s involvement or the risk of error.
A great way to get your sales team up and running with contract creation, and to minimize the risk of human error, is to use a natural language Q&A flow to populate key terms in the agreement. Enabling the sales team to self-serve has huge benefits: legal can save on low-value contract admin and dedicate time to the tasks that really matter.
Create an approval workflow
Even though the sales team are self-serving on contracts, you’ll likely want the legal team to retain approval rights. If your contract collaboration platform has an internal and external commenting feature – like Juro does – then approvers can get a full picture of changes and negotiations before they OK it for signing.
Kickstart your project …
You have all the systems in place, so now it’s time to get the process going – and to get your time back! Starting with a pilot phase usually works best, helping you stay in control and making sure everyone’s on the same page.
… and review it regularly
The dashboards and analytics in your contract collaboration platform can help you understand how your workflow is performing. Are there bottlenecks in the process or are certain teams slowing things down? Are certain clauses always queried – and if so, can you change them to make negotiation easier? Make sure your process is scalable and remains scalable by reviewing regularly and optimizing.
Scale your software licence agreements with Juro
Is negotiating software licence agreements a pain point for your business? Is your business scaling so fast that the contract process feels out of control? If so, try Juro and discover a contract collaboration platform that simplifies negotiations, reduces time-to-sign and helps teams manage contracts in a unified workspace.