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How to automate a software licence agreement

Jeremy Huitson, 1 October 2020

Manual software licence agreement workflows can waste time and cause friction between teams. How can automation change that picture?

Software licence agreements are a common touchpoint between a business that builds or owns software and another business or consumer that is licensing that software. This deep dive looks at who software licence agreements affect and the benefits of automating the software licence agreement workflow. Use the navigation below to find out more, or explore our specialist blog for more contract deep dives.

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

What’s a software licence agreement?

A software licence agreement ensures that a person or a business has the right to use software that is legally owned by someone else. With these contracts, the software owner can control use of the software and protect their legal ownership while also strengthening the commercial relationships between the two parties. 

The terms ‘software licence agreements’ and ‘software-as-a-service (SaaS) agreements’ are often used interchangeably, but they are subtly different. Traditionally, software was offered under a licence that enabled users to install copies of the software on their devices. Now, with SaaS, the software lives in a central cloud server that can be accessed by different users on their individual devices. 

Who do software licence agreements affect?

The people and teams affected by software licence agreements may vary depending on the business, but they typically include:

  • Legal counsel, who are responsible for reviewing the commercial terms, and approve changes to standard positions.

  • The sales team, often acting as the bridge of communication between the business’ stakeholders and the prospective customer.

  • Approvers, who might be people from various teams, such as finance, sales and sometimes even C-suite.

  • Authorized signatories, who differ from business to business.

  • Customers, who are the ones that negotiate and eventually agree to the terms within the software licence agreement.

It’s unsurprising that most businesses still manage contracts in Microsoft Word. But, as part of a manual workflow, it often creates more problems than solutions

 

What’s the manual process?

Most businesses still manage contracts in Microsoft Word, through manual, non-self-serve time consuming processes that create friction between teams. It’s unsurprising, given Word is the go-to for most documents. But in a manual contract workflow, Word often creates more problems than solutions. The manual process often looks something like this: 

The legal team creates the software licence agreement template in Word and saves it on a shared drive. Someone in sales locates the template, downloads it and updates the terms to reflect discussions with the customer – often with no guarantee that the version they have is the most current. They then email this to the legal team for review, which often results in back-and-forth email chains and no clear audit trail of changes. Eventually, the salesperson will convert the contract to PDF and send it for signing via an eSignature tool, like DocuSign. 

But instead of signing, the customer wants to negotiate key terms. Any changes need to be sent back to legal for review and approval, at which point the legal team often realize that this version of the software licence agreement is outdated. More revisions, emailing and back and forth ensues before the contract is finally signed, sent to all stakeholders, and saved somewhere in a shared drive. 

 

Why it’s painful to manage software licence agreements manually

  • Low-value work: “I’m manually inputting the same info twice – first in Word, and then in Salesforce.”

  • Data integrity: “The data in our contracts isn’t the same as the data in our CRM. It makes forecasting difficult when I don’t know which version is correct.”

  • No version control: “People are using old versions of the agreement. These terms are outdated and increase risk in the business.”

  • Wasted time: “Legal wastes so much time chasing down emails, and the negotiation process is a massive time drain. I keep losing track of what we’ve agreed so far.”

  • Lost metadata: “I lose visibility of contracts post-signature. There’s a greater risk of human error and I can’t report on contracts accurately.”

By having a single source of truth that serves all software licence agreements, teams can save time and businesses can reduce risk

How to automate software licence agreements

Create a perfect template

An efficient, automated workflow has well-defined roles for everyone involved. The legal team owns the software licence agreement templates, but instead of having to create new versions and hope that sales colleagues can find and use them, legal can define and update a single template. By having a single source of truth that serves all software licence agreements, teams can save time and businesses can reduce risk. 

Empower teams to self-serve

The most efficient workflow will reduce the reliance on legal for contract creation by empowering the wider business to self-serve. The sales team will be able to generate their own software licence agreements from the legal team’s defined and approved template. One of the fastest ways to achieve this is to use a Q&A flow that guides users through a series of natural language questions, the answers to which autopopulate key information in the software licence agreement. 

Build approval into the workflow

Approval workflows are common; they ensure that legal counsel have visibility over the contract process, and approval rights before contracts are sent to be signed. Legal only gets involved at certain points in the workflow, reducing friction between teams. Other people might also need to approve the software licence agreement, such as members of the finance, sales, or procurement teams – it all depends on the business. 

Sign quickly and securely 

Authorized signatories could be CEOs or sales managers, depending on the size of the company. Authorized signatories can sign deals quickly and securely with a native eSignature tool in the automated workflow, streamlining the signing process.

Useful features 

Want to put an end to manual processes for software licence agreements? Look for the following features in an automation provider: 

  • Approval workflow. By defining roles for legal and signatories, the approval workflow prevents deviation from standard contract terms. The best approval workflows are ‘sequential triggered’, so multiple approvers can be notified in order when their input is needed and everyone involved has sight of what’s going on. 

  • Locked templates. The legal team may want to define the software licence agreement template and prevent colleagues from deviating from the latest terms. This reduces risk and helps legal manage version control.

  • Defined playbook. Conditional logic can help you embed alternative clauses and fallback positions into your software licence agreement template. 

  • Smartfields. These contain contract metadata, so key fields like dates, names, addresses and values are tracked and searchable. A two-way integration with the business’ CRM ensures that the data is always up to date and accurate, and that legal doesn’t have to waste time manually inputting the same information twice.

  • Visual timeline. Keep track of changes and variations with a visual timeline that offers approvers and signatories an overview of edits. 

  • Internal commenting. If you need to vary standard terms, internal commenting will allow internal stakeholders to discuss and collaborate in real time on the document, without having to worry about audit trails and version control.

  • External redlining. Negotiate the agreement without having to move into Word. The contract collaboration platform should also keep track of changes made to the contract.

Handy integrations

  • Salesforce. As the system of record for many high-growth organizations, a frictionless integration with Salesforce is essential. The sales team can create contracts without leaving their platform of choice, confident that legal have oversight. A two-way integration with salesforce ensures that any changes made to the contract are also reflected in Salesforce. 

  • Companies House. Useful for UK users, the Companies House API makes sure that important information – like the company’s registered address or legal name – is always accurate. 

  • Google Drive. An integration with the business’ shared drive means that signed contracts are automatically downloaded and securely stored.

Automate your workflow with Juro

Is managing software licence agreements a pain point for your business? If so, try Juro and enable your business to agree and manage contracts in a unified workspace.

Topics: Contract magic

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