Feature
Get out the birthday candles. June 30 is National E-Sign Day and the 15th birthday of the US National E-Sign Act, which declared paper signatures and electronic signatures equal under federal law.
The act didn't set the world on fire. But it did pave the way for the digital transaction management (DTM) market, a sector that's expected to grow to $30 billion by 2020 according to Aragon Research.
Moreover, it has cleared the path for creation of true digital businesses (even if that goal remains somewhat elusive).
As Stephen Bisbee, president of a Baltimore company called eOriginal, which holds a patent on a process to create, sign and transfer documents electronically, said at the time, digital signatures are the foundation of e-commerce. "Up to now, our whole legal infrastructure has been built on paper," he remarked in 2000.
Slow Adoption
Bisbee was one of a small group of legal experts that created the framework for the model US Uniform Electronic Transaction Act (UETA) and sections of the US Uniform Commercial Code that enabled the use of electronic signatures and records in commerce. He also supported the development of the E-Sign Act.
And while it's taking longer than anyone probably expected, he still believes e-signatures are destined to become standard technologies in the enterprise.
Recent research by Nitro showed there was little change between 2005 and 2015 in terms of the ways businesses work with documents.
Bisbee agrees there are a number of issues holding back enterprise adoption of e-signatures, including concerns over risk and security. But he claims there are signs of progress worldwide.
"Millions and millions" of e-signatures are used daily in the US, he said, thanks to the E-Sign Act.
“In Europe, India and a lot of other geographies, they still rely on a digital certification form of electronic transactions where people need to be issued with a public or private keys. However, even this is changing.”
US Law
In the US, the UETA and the E-Sign Act give electronic documents and electronic signatures the same weight as paper documents and ink signatures.
These two acts define an electronic signature as “an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record."
The expectation in the US is that you can carry out all business transactions electronically. "People use electronic signatures in every aspect of their lives in the US. You can do you mortgage electronically, you secure car loans electronically,” he said.
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The most progressive businesses no longer ask whether they should be using e-signatures, but are focusing on how to best fit them into their overall business processes.
The next step is to move forward to management of all digital business online. "This enables moving from simple signatures to complex financial transactions,” he said, predicting this tipping point will occur globally within the next four years.
Digital Transaction Management
Aragon Research, the company that expects DTM to hit $30 billion by 2020, enthused that as 2015 continues:
"The race to eliminate paper will continue unabated, and touch every aspect of the enterprise from sales to manufacturing, finance and human resources. As enterprises realize that the speed of business is their opportunity and challenge, more and more of them are trying to make their document processes fully digital."
Bisbee said DTM implies deep integration of e-signatures into workflow processes. Or, more specifically, "Different individuals can interact with different people on different documents at difference times from different places.”
By the end of 2016, Bisbee expects 70 percent of large enterprises will have a DTM initiative either fully implemented or underway. However, he cautioned:
“If you are going to implement a true DTM you have to go across all your processes and make sure that none of these will that still drop down into paper. That often takes some time to implement."
The key driver for adoption of DTM "is the growing expectation day by day that customers will be able to do their business electronically,” he said.
Title image by OakleyOriginals.
