Sunday, July 20, 2014

Assumed watertight - Taking the Guesswork out of Contract Execution with eSignature

If you regularly work with contracts, the chances are you routinely do business on the basis of assumptions. There is a better way.

There is an interesting story of how David Geffen, the multimillionaire driving force behind Geffen Records and DreamWorks, got his first break. He was given a job at William Morris, a showbiz agency, on the basis of being a recent graduate of UCLA. The company duly wrote to the university to confirm that the applicant was a bona fide graduate. This left Geffen with a problem: he wasn’t. Undeterred, Geffen used his position in the company’s mailroom to intercept the letter from the university and alter it. The company got their confirmation, and a few years later Geffen was managing Crosby, Stills and Nash.

When executing paper documents, we make assumptions that any signatures are authentic and that the document is unaltered. We make these assumptions because we have to: most of the time, we’re not in a position to witness the signature of the document, nor do we have specimen signatures for comparison.

In the majority of cases, no authentication of the signatures (or, indeed of the integrity of the document) is ever carried out until something goes wrong in the process, often when someone says “that’s not what I signed” or “that’s not my signature.” When that happens, of course, the damage has already been done.

Electronic signatures allow you to secure your document and authenticate signatories before they sign. It is therefore possible to initiate and complete your transactions without leaving the digital world. 

Transacting in the Cloud, of course, requires you to entrust sensitive data to another organisation. Ten years ago, this might have seemed unthinkable, but particularly with the success of, there has been a realisation that a secure vendor infrastructure combined with sound internal security policies can make the Cloud the preferred option.

Standards such as ISO 27001 and SSAE 16 allow like-for-like comparison of vendors and show that all are not created equal. Your choice should be based not only on your own organisation’s security requirements but on the vendor’s ability to allow for authentication methods that are suitable for the type of transaction and help streamline the process rather than hinder it.

Thousands of businesses have come to the conclusion that not only are they not introducing risk by transacting in the Cloud, they are, in fact, reducing it.

Now, organisations have to answer a different set of questions:  “what competitive advantages can digital transactions bring to my business?” and “in the face of increasing competition, can I afford not to do this?”

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