CONSIDER FOR A MOMENT how the Dark Ages finally gave way to the Renaissance: The capability for learning had been there all along, but a complete shift required evolution and expansion. The same could be said of the electronic signature.
Bill Nagel, a Forrester Research analyst focusing on risk management, says the technological foundation for e-signatures--the combination of secure digital signing and paperless processing--has been in place for approximately 20 years, with some vendors in the space sporting a track record nearly that long. But demand for e-signatures is finally reaching critical mass, Nagel says, due to an expanded regulatory burden worldwide. In fact, according to estimates by Sally Hudson, an IDC research director for identity and access management (IAM), compliance drove approximately 85 percent of all IAM purchases last year.
Gregg Kreizman, a research director at Gartner, says that e-signature users not only gain efficiency but also lose fewer business opportunities. "The number-one benefit is basically speeding up processes versus the time it took to handle signatures manually, or [to overnight] documents ... and [wait] for the response," he says. "There's also the ability to get a customer signed and not lose the opportunity because of the mail or courier time involved, loss of interest, or [the emergence of] a better deal."
As the technology itself has matured, overall adoption of software-as-a-service (SaaS) has enabled the participation of companies that were previously unable to afford suite solutions with e-signature capability. "In the last four to five years ... the second half of the e-signature market that exists now has popped up, with hosted vendors providing Web-portal--based services, including customized signing ceremonies, logging, and archiving," Nagel says. "Companies [are growing] comfortable with having security-related services hosted off-site."
The market may be expanding rapidly for SaaS e-signature providers, but on-premises software suites remain popular, Nagel says, citing as prime examples the solutions offered by Communications Intelligence and Silanis. (See Vendor Shortlist, left.) The leading vendors differentiate themselves not in their respective e-signature technologies, he says, but in how they optimize business processes, "designing for a very specific signing ceremony or specialized-routing workflow." Prices can vary widely by model or robustness, he notes, from several hundred thousand dollars to more than $1 million.
Kreizman says that the kind of company likely to prefer the on-premises model might have multiple lines of business, the ability to provide in-house support for the software platform, and multiple applications awaiting e-signature capability--particularly if the total number of e-signature transactions is unknown.
On the other hand, companies prioritizing speed and hoping to enable the simple transfer of contracts within a single line of business may find SaaS more appealing. These users can either email contracts back and forth for signature, or else utilize a communal, branded Web portal. …