eSignatures in a Document Management System

As early as 3500 BCE, protowriting was used on European cave walls to convey seasonal hunting information. By 3100 BCE, the Sumerians, credited with creating one of the first complex societies in the world, had developed a system of pictographs to verify identity.

Fast forward to 1069, when El Cid, also known as Rodrigo Díaz de Vivar, the notable Castilian nobleman and military leader in medieval Spain, signed a document using the Latin alphabet. This signature is the oldest known of its type. The name “El Cid” derives from the Arabic “al-Sayyid,” meaning “The Lord.”

In 1677, the Statute of Frauds, an act of the English Parliament, mandated that contracts, wills, and property titles be written and signed. The evolution of signatures continued in 1869 when digital signatures via telegraph were legalised in the United States.

The early 1990s saw legislation adapt to include contracts sent by facsimile technology. In 2019, DocuWare integrated electronic signatures into its digital Document Management System (DMS), revolutionising how businesses handle documentation.

In today’s digital world, businesses constantly seek ways to streamline operations, enhance security, and improve efficiency. One significant advancement that has transformed how enterprises handle documents is the integration of Electronic Signatures within Document Management Systems.

But how exactly do electronic signatures work in a DMS? How are they authenticated, and What benefits do they offer businesses? Let’s explore this.

Electronic signatures, or e-signatures, are digital versions of handwritten signatures. They are used to indicate consent or approval on electronic documents. Unlike traditional signatures, electronic signatures are created, managed, and verified digitally, making them perfect for modern business practices.

A Document Management System is a digital repository that allows businesses to store, manage, and track electronic documents. Signing documents becomes seamless and efficient when integrating electronic signatures into a DMS. Here’s how it works:

Document Creation and Upload: The process begins with creating or uploading a document into the DMS. This upload can be any document requiring a signature, such as contracts, agreements, or forms.
Signature Request: Once the document is ready, the user can request signatures from relevant parties. The DMS sends an email or a notification to the signers, informing them that their signature is needed.
Signing Process: The signers receive a link to the document via email or within the DMS platform. They can review and sign the document electronically using various methods, such as typing their name, drawing their signature with a mouse or touchscreen, or using a pre-stored signature.
Authentication: The DMS employs various authentication methods to ensure the signature’s authenticity. This verification can include multi-factor authentication (MFA), email verification, or secure access via user credentials. In some cases, biometric data or digital certificates also enhance security further.
Signature Capture and Storage: Once the signature is provided, it is securely captured and embedded into the document. The DMS records a timestamp and the signer’s information, creating an audit trail that verifies the signing process.
Document Management: The signed document is then stored securely in the DMS, which can be accessed, managed, and tracked as needed. The system ensures that the document remains tamper-proof and maintains its integrity.

Authentication is a critical aspect of electronic signatures to prevent fraud and ensure that the signatures are legitimate. Here are some widespread methods used to authenticate electronic signatures:

Multi-Factor Authentication (MFA): Requires signers to provide two or more verification factors, such as a password and a code sent to their phone.
Email Verification: Sends a unique link to the signer’s email, which they must click to access and sign the document.
Digital Certificates: Cryptographic technology creates a unique digital ID for signers, verifying their identity.
Biometric Data: Fingerprint scanning, facial recognition, or other biometric data technology can also confirm the signer’s identity.

Businesses using Electronic Signatures enjoy many benefits, such as:

Increased Efficiency: Electronic signatures eliminate the need for printing, scanning, and mailing documents. This elimination of traditional manual processes significantly speeds up the signing process, allowing businesses to close deals faster and improve turnaround times.
Cost Savings: Reducing the reliance on paper, ink, and postage leads to substantial cost savings. Additionally, electronic storage reduces the need for physical storage space.
Enhanced Security: Electronic signatures offer robust security features, including encryption and authentication, which ensure that documents are protected from unauthorised access and tampering.
Convenience and Accessibility: Signers can sign documents from anywhere, anytime, using any device with internet access. This flexibility is precious in a globalised business environment.
Auditability and Compliance: Electronic signatures create a detailed audit trail, recording every step of the signing process. This function is invaluable in helping businesses maintain compliance with legal and regulatory requirements, such as eIDAS in Europe and the ESIGN Act in the United States. In Australia, Electronic signatures are governed by the common law as well as the Electronic Transactions Act 1999 (Cth) and its equivalents in each state (the “ETAs”). Each state and territory also has its own Oaths and Affirmations Act, which governs the electronic signing and witnessing via audio-visual link of wills, powers of attorney, affidavits and other significant documents.
Environmental Impact: Reducing paper usage through electronic signatures supports ecological sustainability efforts, helping businesses lower their carbon footprint.

In my view, integrating electronic signatures into a Document Management System is a game-changer for businesses. It enhances efficiency, reduces costs, and provides strong security measures, all while offering convenience and supporting sustainability. As more enterprises embrace digital transformation, electronic signatures will continue to play a crucial role in modern document management practices.

Whether you’re a small business or a large enterprise, the benefits of adopting electronic signatures are clear and compelling.