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ECM: Avoiding Paper in Processes that Require Signatures
Digital signatures are used to guarantee that an electronic document is authentic. The signature of the document ensures that the person who says they created the document actually did, and it also ensures that no other person has altered the document since it was signed. Digital signatures are authenticated by using different types of encryption. When digitally signed, the contents of an electronic document are encrypted and scrambled to make the document totally unreadable. Only holders of the key will be able to decode the information so that it can be read. The digital signature uniquely associates the signer with the document.
While many business processes are going electronic, approval steps that require paper signatures become bottlenecks to the process. Many of the key advantages around efficiency when using electronic documents are diminished when it is necessary to print, sign and maintain a hardcopy of the document. The use of digital signatures can help companies avoid the need to reintroduce paper into an electronic workflow.
And the savings that companies can realize by adopting digital signatures can be significant. Arx, a company specializing in digital signatures, estimates that by the time that you consider the costs involved with processing paper signatures, and consider the need to print, route, scan, archive, and ultimately destroy paper documents, that a typical 100-person company will spend about $81,000 per year (or $6 per signature) on paper signatures.
The use of digital signatures can be particularly appealing to professions and processes where the need for signed approvals are important, like legal, medical/health, and engineering. The need for formal signatures often depends upon how heavily regulated, either externally or internally, an organization is.
Note though that certain states and industries are still evaluating the effectiveness of digital signatures. Those states include Utah, California, Washington, and Illinois, and the industries include real estate, property, vital records, and finance. It is probably just a matter of time though before acceptance of digital signatures will become universal.
To summarize, benefits of digital signatures include:
- Reduced approval cycle time. Keeping everything electronic allows for very rapid routing of documents.
- Lower costs
- Simplified compliance.
- Secure document exchange, collaboration and e-submission
