Forrester Research: What To Look For In E-Signature Providers

by Craig Le Clair with Connie Moore and Emily Fowler-Cornfeld, Forrester Research

Executive Summary

Electronic signatures are gaining momentum due to accelerating consumer technology and the need to reduce both transaction costs and the time to close business. But despite increasing customer acceptance, most enterprises adopt e-signatures as an afterthought to larger processes like account opening and allow business units to independently deploy incompatible solutions with poor leverage across IT, compliance, and customers. In response, Forrester has developed an e-signature segmentation framework to help enterprises prepare for increased adoption. The eight top features to look for in an e-signature provider are global reach, company stability, solution accelerators, professional services, a customizable solution, electronic evidence, online session management, and mobile support.

Four primary use case areas have emerged that cover the majority of enterprise requirements for e-signatures:

• Mediated. The focus here is on human support. The mediator is an enterprise representative who works in the field, call center, or line of business and serves as a human link between the customer and the business processes, such as helping fill in information on forms, reviewing inprocess transactions, and coordinating the signing process. The mediator often handles money transfers, while the business process places a high value on client trust and supports strong legal and compliance requirements. Mediators like insurance agents, financial advisors, and mortgage brokers work with externally facing processes to help clients and help close complex, high-value transactions that require signatures by multiple parties.
• Unmediated. This use case focuses on the transaction; the supporting business processes leverage the Web and mobile channels to support customers and depend on a reliable set of system-led interactions to complete a transaction. Unlike the mediated use case, people are not required to fulfill a transaction; however, they stay in the background to handle exceptions, provide technical support, and maintain current content on the site. Transactions involve payment, transfer of positions, account servicing, education, and e-voting, but tend to be higher volume and more commoditized than the mediated use case.
• Third-party contracts. Processes in this use case focus on high-value contracts — often one-shot deals — between the enterprise and its external business partners and providers. But unlike the mediated and unmediated segments, third-party contracts are not directed at core enterprise customers. For example, contracts like building leases are high-value, can involve multiple parties, and must be legally binding, but the volume of contracts is not particularly high.
• Internal employees. The internal employee signature use case, which is somewhat overlooked, involves the efficiency of internal operations. For example, clinical trials in life sciences require researchers to validate steps in the testing process. E-signatures provide control over the process and the ability to track its compliance with regulations. One life science company implemented a digital signature process that saved $750,000 over five years.3 Manufacturing has a number of processes that require internal workers to sign off on individual tasks. Administrative tasks also may require a verifiable agreement with employees for various HR and internal compliance applications, like employee sign-off for Sarbanes-Oxley revenue reporting, employment applications and agreements, personal history statements, and offer letters.

This framework for e-signature use cases provides a strong starting point that can lead to more effective governance and clearer internal conversations and strategies. For example, one wholesaler of insurance to credit unions is reworking its processes to be more self-service and aligned with retail market approaches. This firm currently sends 100,000 forms per month through the mail to credit unions ranging in sophistication from small organizations with paper-based processes to multibillion-dollar credit unions with online banking. The insurer’s framework created use cases based on how mature or web-ready their customers were, from mediated to unmediated; a business solutions architect at a mutual insurance company told us that they will have standard approaches for each of these categories.

Recommendations

Business process pros: Get smart about e-signature processes

The increasing interest in e-signatures will challenge business process pros to come up with solutions — more quickly than many would like or anticipate. Resist the pressure to implement a one-off solution and step back to see where other parts of the business can use e-signatures.

In particular:

• Set the tools aside during the initial phases of the project. The greatest value comes from thinking about the business process. Don’t focus too much on the old manual system; focus on the new process. Re-engineer the process first and then pick the tool. Focusing on the tool too early is a huge pitfall — avoid it.
• Start by asking critical questions. What sorts of documents really need to be signed? Where and how do the documents need to be presented to the signer and returned to you? Are you subject to regulatory requirements that compel you to retain and securely store the (electronic) copies of the signed documents for a certain period of time? Do you have the IT expertise in house to run and maintain the solution, or are you comfortable with the documents being processed by and/or stored on third-party servers?
• Use a proof-of-concept approach. Prepare three short scripted scenarios for vendors for a proof of concept (POC) with your document and data. This allows you to see how each vendor handles the same process. Consider inviting other participants outside of IT to evaluate the pilot and record oral input after each POC demo.
• Understand integration requirements early. Forrester has outlined enterprise requirements like support for multiple signature methods, compatibility with existing login and authentication mechanisms, and the ability to leverage external databases for identity-proofing new customers. The ability to comply with existing laws and to adapt to changes in e-signature legislation is also important. But give heavy weight to the ability to integrate with back-end systems to allow straight-through processing and avoid customization.

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