Back in the year 2000, as the world welcomed the new millennium, international governments were working to truly welcome business markets into the digital age – introducing legislation to recognise electronic signatures on documentation as legally binding. This was the logical solution to a growing inconsistency in business processes, which saw an increasing degree of digitisation ultimately constrained by the continued need for a ‘wet,’ or written signature on commercial contracts.
Countries around the world began passing legislation that would give electronic signatures the same legal status as written signatures in 1999, and these now include:
- United States
- United Kingdom
- New Zealand
- South Korea
Many other countries have since passed legislation recognising the legality of electronic signatures – sometimes with exceptions – while others provide that they are enforceable, without technically having the same legal status as ‘wet’ signatures.
While this territorial difference makes the international electronic signature situation sound complicated, it is, in practical terms, very simple. In order to operate effectively in the global marketplace, your business now needs to have the ability to support electronic signatures within its Contract Management system. This development has been gradual, but its impact has been revolutionary.
The ‘wet’ signature days
Historically, a ‘wet’ signature was always required to make a document legally binding. As a relic of the ancient approach to contractual agreements, this insistence on a dated, written signature was held to be the only way of ensuring the identity and commitment of the person putting their name on the dotted line. The inked scrawl was considered to be the only real verification of a document being a ‘single source of truth.’
It was not the ‘wet’ nature of the signature that eventually became the problem, though. It was, instead, the process behind it; the process that was needed to obtain that written verification. In order for a legal document to be signed by an individual, with a pen, that document firstly needed to be on paper, and secondly, needed to be physically present for them to provide their signature. This required printing, and also transportation of the document. That transportation may have been the act of carrying the contract around a building and delivering it to the desk of the person in question, or using the postal service or a courier to get the contract to them. Where multiple signatories were required, this process had to be replicated the requisite number of times before the contract could be enacted. In all respects, this consumed both time and resources.
The electronic signature revolution
With technological advancement delivering sweeping improvements to the way business was conducted around the world, the manner in which contracts and agreements are signed was the last major piece of that digitisation puzzle. The recognition of electronic signatures as being legally binding, and the adoption of such as enforceable standard in many international territories revolutionised Contract Management best practice, on a global scale.
The advantages of electronic signatures in Contract Management are such that the benefits can be seen in the most crucial areas of any business.
- Profits – Anything that cuts costs can help to boost profits, and electronic signatures make savings for your business in two ways. Firstly, it saves on the cost of staff time, because your personnel no longer need to devote valuable working hours to the task of putting physical copies of contracts in front of signatories. Whether that is by hand delivering them, emailing them for the purpose of printing and scanning, or arranging for courier or mail delivery – these time consuming tasks are no longer necessary. Secondly, the direct cost of courier or mail delivery is eliminated, along with the costs associated with printing and scanning.
- Efficiency – With the automation of the basic administrative task of delivering contracts for approval, the efficiency of your business operation is boosted. Project timescales are also shortened, thanks to the reduction in the amount of time it takes to approve and enact contract documentation.
- Compliance – With electronic signature comes greater compliance, thanks to the auditable date and time stamps that are created and logged. This means that accountability and transparency are guaranteed, and your business can be shown to be in compliance with related industry and regulatory requirements.
- ‘Green’ credentials – In eliminating the use of paper, and the need to print and transport that paper between signatories, the ‘green’ credentials of your business are immediately improved. This can have significant financial benefits, as well as helping to ensure high levels of regulatory compliance.
Electronic signatures are an integral part of Contract Management Software and the development of this feature has become best practice in handling contract lifecycles for business. Within Contract Management software packages, including Symfact, the digital approval element intersects with several crucial facilities – creating a seamless user experience and an effective, efficient platform in which your entire contract lifecycle can be optimised and controlled.
- Permission-based access control -As a browser-based platform that uses permission-based access, contract documentation can be accessed by authorised personnel from any web-connected place, on any internet-enabled device. This means that contract approvals can be managed easily and efficiently, regardless of the number of signatories or their location. It also means that your business can have complete version control, ensuring that only the most up-to-date, approved documentation is available.
- Automated workflow - The approval process is optimised with an automated workflow that is fully customisable. Notifications and alerts ensure accountability and transparency, as signatories are directed to the right document, at the right time.
- Encrypted data transfer - With encrypted data transfer, the integrity of electronic signatures is protected along with the contract data, which means that compliance is assured, and signatories can engage with the contract in question in full confidence.
- Reports and analytics - With customisable reporting and analytics features, the efficient operation of automated approvals and workflows can be closely monitored. This provides a procedural reinforcement that allows for early remedial action with regard to delays and bottlenecks.
Having the ability to secure digital contract approval with electronic signatures means that the Contract Lifecycle Management processes of your business are revolutionised, with optimal project timescales and increased efficiency. Contact Symfact to arrange your demonstration of Contract Management Software today.