Electronic signatures, or e-signatures as they are popularly known, have really grown in popularity over the past 5-6 years. According to Gartner, the SaaS based esignatures today comprise 80% of all new purchases in North America compared to just 15% not so long ago in 2009. One of the major reasons for this exponential growth is the time and money that businesses save by moving to a paperless signature solution.
Consider this: the typical cost for a business to print all agreements on a paper and courier it to the customer for signing is around $30. Even if the business only signs 100 such documents in a month, the expenditure in paperwork amounts close to $3000. E-Signature technology on the other hand can be procured for as much as $15 a month. Not only is this cheaper, it also helps get documents signed and ready in a matter of minutes. It is no wonder then that 80% of the businesses involved in the consumer lending industry have today adopted e-signatures. (source: www.silanis.com)
How They Work
Before we go ahead and try to answer the question in the title, let us first understand how electronic signatures work. Firstly, electronic signatures are not always the stylized scripts that we use while signing on paper. The objective of an esignature is to get an official approval from the customer to the terms proposed in a contract agreement being signed. This is done without compromising on the safety and security of the data. There are various use-cases for an esignature medium:
1. Courier companies can register your acknowledgement of receipt online instead of over paper. This can help them capture the date, time, GPS coordinates and even the photo of the signatory along with the signature to ensure the authenticity of the person signing the document. This is called face-to-face esigning.
2. Small businesses that sign contracts with overseas clients can do so over a third party esignature platform to ensure all documents are securely signed by both parties without delay
3. Mortgage companies that deal with thousands of customers every day may integrate the esignature process within their enterprise website so that customers may read and sign documents electronically without breaking the navigational flow of the user experience for want of paperwork.
One of the primary concerns with respect to esignatures is the security of the platform. This is because unlike traditional system, digital documents are prone to hacking, distortion and impersonation. Thankfully, most of these concerns are taken care of with the leading esignature platforms. These services tie up every document to the authorized email address of the recipient and are password protected. This ensures that only the authorized people are eligible to view the documents. In addition to this, contract documents that are electronically signed are also encrypted during transmission to prevent snooping and interception. Finally, these documents are also imprinted with what are called digital signatures. These are encrypted values that uniquely identify the timestamp of the document when it was last edited. This helps the involved parties to be sure that the document has not been edited or modified after the agreement has been signed.
E-Signatures are today available for use on all kinds of platforms and applications. This technology can be integrated with enterprise CRM or ERP applications, may be used on touch screen based smartphones or tablets and can also be accessed from any part of the world thanks to the cloud-based service.
So finally to answer the big question - are electronic signatures recommended for your business? This can be answered by understanding your business requirements and alternatives. If you are a business that only needs to sign short contracts with customers once every few months, then there really is no need for you to subscribe to an esignature service - the costs involved in paperwork and signing may not be much. However, if your business is in an industry where you have hundreds of customers who are shipped bulky contract forms each month, then the costs involved with the traditional system are extremely high and it makes sense to migrate. Given the fact that esignatures today are extremely secure and reliable, the cost of the technology is what it finally comes down to, and in this case, esignatures seem to be a better bet than traditional paperwork based systems.