Building A Business Case For Electronic Signature Software
Electronic signature software and digital transaction management (DTM) solutions provide a secure and mobile way for organizations to do business. Moving from paper to digital offers unique advantages, simplifying workflows and preventing document loss.
It's a sign of the times that kids aren't even learning to sign their names in school anymore. Whatever you think of this development, we've crossed into an age where handwriting isn't just unnecessary, it's a waste of time and money. But to save money, you have to spend a little. Here's how you can explain to your top managers—who probably had years of penmanship classes in the lower grades—that their quaint little practice is getting in the way.
MORE: A Guide To Electronic Signature Software & DTM Solutions
Electronic Signature Software Decision Drivers
How many times a day do you have to sign your name? It might, on average, be less than one. So let's say it's just three a week. It costs something to print out the document, make a copy for your own records then route the original to wherever it's going. And what about the cost of buying filing cabinets and renting the space they take up? Even if you scan everything into a flash drive, there's the cost of that drive, and you either have to take time away from your value-added work to do the scan, or pay an assistant to handle this kind of work. Indirectly, there's also the cost associated with the snail-mail pace of approval processes that could be sped up by electronic signature software.
Initially, electronic signature and digital transaction management (DTM) solutions were implemented by insurance and financial services, real estate companies, healthcare providers and other organizations that rely heavily on paperwork and need to meet compliance regulations. These are also the perfect tools for HR, legal and sales as well as any organizations that do business internationally. E-signature and DTM tools not only simplify and speed up workflows that require obtaining signatures, they keep the information secure. There's a big advantage to going fully digital.
However, it's not the purpose of this article to help you choose among e-signature and DTM solutions; Tom's IT Pro has already addressed that thoroughly. We're here to help you get these tools funded and approved, and that's where the business case comes in.
Here's the key takeaway: The benefits will accrue to the enterprise as a whole. Still, as is always the case, the costs will be incurred entirely within the CIO's budget. If this isn't made clear to the rest of the C-level leadership, then you'll have wasted your time spent working on a business case.
Making The Case For E-Signature And DTM Tools
Generally, when we present our business case articles, there's a great deal of original thought that goes into developing the business case. In this instance, though, we must recognize the work that's already been done by Algorithmic Research Ltd., also known as ARX, developers of CoSign e-signature software and partner of the DocuSign DTM platform. It is not in this article's scope to endorse a specific solution, but we recognize the excellent work that ARX has done in developing a justification procedure. Some of the factors are also refined in a whitepaper published by the Association for Information and Image Management (AIMM), which also cites ARX.
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Read: How to Calculate the ROI on a Digital Signature Solution by ARX (PDF)
Read: Digital Signatures - Making the business case by AIMM (PDF)
The current state of budget lines most likely to be affected by DTM and e-signature looks like this:
| Figure 1: Current costs to be impacted by DTM and e-sig adoption |
It's predicated on these assumptions:
- 1,000 DTM subscribers, each generating 25 printed pages per day at 2 cents per page printing cost
- 2.1 pages and 1.5 signatories per average document
- Standard, overnight and two-day mail costs $1.50, $12 and $4, and account for 35, 10 and 20 percent of routing respectively
- Faxes cost 2 cents/page and account for 35 percent of routing
- Half of all documents are scanned at a cost of 50 cents each, and the rest are archived physically at 75 cents each
- 4 percent of documents are both misfiled and needed later, at a cost of $20 per recovery
- 1 percent of documents are both lost and needed later, at a cost of $40 per reproduction
You'll also notice a line for new ongoing costs, which is, of course, blank in the current state. In the target state below, we expect that the enterprise will need to maintain two more servers, and pay for DTM and e-signature support. It appears that DTM is the big-ticket item. Although there might not be an acquisition cost, subscription would be $125/month per user. E-sig support would be 20 percent of the initial $50,000 licensure cost per year.
| Figure 2: Target costs impacted by DTM and e-signature |
One-time costs, then, would add up this way:
| Figure 3: E-signature and DTM one-time costs |
According to DTM and e-signature vendors, such solutions are marked by rapid payback periods, which CIOs love. It's been said that the only thing that can slow down breakeven is the rate at which the organization fully adopts the new processes. We can go along with that. Another advantage of fast payback is a lower risk profile, so we went ahead with a relatively modest 9 percent discount rate.
| Figure 4: Investment analysis |
This is, of course, very good news.
Still, that's all beside the point from a technology point of view. DTM and e-signature tools are table stakes these days. According to the AIIM paper (which is already almost three years old) only 5 percent of businesses surveyed don't see a need for these functions and have no plans to invest.
There will come a day, and soon, when all your company's external stakeholders will be making regular use of DTM and e-signature tools, and anyone who hasn't adopted them will have to play catch-up.
Business Case Resources:To help you get your business case for electronic signature software and digital transaction management (DTM) tools off the ground, download this Excel calculator and PowerPoint template, which you can customize to your needs.The Excel calculator will help you determine your current state, project costs, and target state. It includes all of the inputs you'll need so you can present the final analysis. The PowerPoint template will walk you through adding the analysis from the Excel calculator so you can present the information to your stakeholders in a logical way. >> Download Excel Calculator >> Download PowerPoint TemplateTo get a better understanding of the key metrics and math used in these resources, take a look at How to Build a Successful Business Case for an IT Project.