What’s the point of storing digital documents online if you still rely on printing, faxing, scanning, and ink pens when they need to be signed?
Many organizations have traded their filing cabinets for cloud-based DMS, their client and employee paperwork for CRMs and HRMs, their spreadsheets for ERPs – yet they go back to pen and paper when it comes to identity verification, approvals, and auditing. In other words, they cut their digital transformation at the best part – missing all the upsides of digital transaction management.
This article explores the opportunities provided by digital transaction management solutions and the advantages for businesses in terms of the efficiency and security of their document-based processes.
What is digital transaction management (DTM)?
Digital transaction management (DTM) means leveraging a set of electronic tools and practices to optimize routine document-based tasks. The expression is generally used to refer to the category of cloud services designed to manage document-based transactions.
DTM solutions go beyond the benefits of secure record filing provided by document management systems (DMS). It’s about shifting from management of documents to management of document transactions with a variety of processes – including signing, identity verification, control, and secure routing.
The core elements of digital transaction management
Digital transaction management touches all the aspects of a document lifecycle – from creation to storage. Four main functional areas allow DTM to handle all activities around a document at an advanced level of efficiency and security.
1. Archive management
The foundations of the paperless office lie in cloud-based filing management and storage. Document capture, indexing, searching and retrieval, safe sharing and access control, backup, encryption, and integration capabilities are key components of document management systems and the necessary bases for digital transaction management.
It comes as no surprise that companies point to capture and content analytics capabilities (29%), elimination of redundant data entry and classification (33%), and prevention of manual sorting and routing of documents (35%) as the top three digital enablers for the implementation of DTM.
Electronic document management practices entail a number of benefits, such as:
- Improved data handling, accessibility, and collaboration to raise overall productivity.
- Mitigation of cyber risks and prevention of data loss to strengthen security and ensure business continuity.
- Proper retention, disposal, and erasure of customer and business data to meet the legal obligations and maintain regulatory compliance.
2. Digital authentication
Secure identification is the prerequisite for any action involving documents. Many daily document processes can take advantage of digital authentication: storage system login, file access and sharing, document approval, and so on. Anti-Money Laundering-compliant digital authentication is also widely used to meet KYC requirements when onboarding new clients.
Identity verification via eID prior to enabling access to a document offers the highest security on the person’s identity. And that becomes even more important in the digital age where long-distance or cross-border relationships necessarily require contactless ID validation to be certain of the parties’ identity and accelerate administrative tasks.
That’s why digital authentication is essential for digital transaction management. E-identity methods allow users to replace legacy practices and paper IDs with faster, safer, and more convenient identification mechanisms.
As a matter of fact, meeting customer expectations for information access and use (38%) and enforcing and automating governance and compliance (28%) are among the top drivers for moving towards digital transaction management.
3. Electronic signature
Digital signing is a must for any business. In fact, e-signatures make up a large part of DTM solutions, capturing the largest market share (44.32%) in 2020. DTM software with built-in e-signature capabilities prevents the need to integrate this paramount functionality from an external source.
A DTM solution offers a complete overview of the document process status so that it’s easy to check who has signed and which signatures are missing. 95% of organizations agree on the importance of getting ongoing feedback and status updates and DTM achieves this with real time-tracking and ongoing monitoring of the document journey.
What matters even more than time and cost savings is the much higher level of reliability and security offered by digital signatures compared to the traditional ones.
Paper documents can be easily altered: handwritten signatures can be forged, changes may be made to the content of the paper document, and contractual parties can deny having signed it. None of this is possible when digital signatures are used, as the document is protected from a triple perspective:
- The authentication of the signers through digital IDs confirms the signatory’s identity and links the electronic signature validation data to that person.
- The integrity of the document’s content is guaranteed as every step is captured in a secured audit trail that allows users to detect any modification attempt.
- The intent of signing and being bound to the agreement is explicitly expressed after reading and accepting a statement of declaration and consent. Each digital signature is time-stamped so that the trusted time of signature generation can be used as non-repudiation evidence.
4. Workflow automation
Automation capabilities merge and link the first three areas for functional and combined operations. With workflow automation, all the tasks to perform around a document are handled and executed consistently, efficiently, and securely. As a result, time and cost savings are assured, manual efforts are minimized, document processes are standardized and error-proofed.
DTM allows users to set up custom routing scenarios to build rule-based flows that trigger the steps needed autonomously and systematically.
For example, imagine you have a document that needs to be signed by several individuals in a particular order. With DTM you can create routing rules to make sure that the document reaches the inbox of the signers in the right sequence, at the right time. Additionally, you can define security settings like authentication via eIDs or 2FA prior to viewing the document, so you make sure only the right people have access. Moreover, automatic reminders will notify participants to ensure the document follows its route towards process finalization.
With DTM software, multiple processes can be handled simultaneously. No critical steps can be missed, and no document can get lost. Frictionless document flows improve scalability performance and accelerates the service delivery for the end-user. In other words, automation means faster business outcomes and improved customer experience, which are the two major factors of the DTM market’s ongoing growth.
How does digital transaction management work?
A DTM solution integrates and automates safe online archive management, reliable authentication, digital signing, and workflow automation in the same platform to facilitate control and oversight over business documents. Instead of adopting a different software for each of the purposes mentioned above, users can rely on a single tool to manage all document transactions.
What kind of document transactions can you manage with DTM?
Every function of any organization manages document processes at some level, so they all can benefit from digital transaction management. Cross-department workflows that involve multiple people are the neediest for digital automation, so DTM appears especially beneficial for internal and external collaboration.
DTM software allows users to interact with documents from different locations and raise efficiency and productivity at all business levels.
Whether you want to try out DTM to address a specific administrative need or you’re ready to launch a holistic initiative company-wide, the following use cases may help you get a clear understanding of DTM’s actual applications:
• Finance, procurement, and accounting: DTM makes it easier to process invoices, receivables, and payroll documents by removing paper handovers from the picture and digitizing managers’ approvals. The same goes for auditing balance sheets and income statements, handling M&A documentation, purchase orders, statements of work, and managing any other types of financial records and reports. High-level security and reliability are expected from financial departments, and DTM leaves no room for errors and enhances accuracy.
• Legal services: Most legal document transactions include signing processes. When it comes to time-sensitive or high-value operations, speed and compliance are of utmost priority. Digital signing dramatically cuts the time and efforts to spend on contract management and internal compliance. From day-to-day paperwork to company documents, settlements, and all the way up to executives and board records and shareholder meeting documentation – high-value records can be handled with peace of mind and protected from unauthorized access.
• IT management and customer support: Access and change management, asset tracking, and incident reporting are crucial for any online business. DTM enables immediate actions to address clients’ needs. With improved data handling and accessibility, customer information and records can be found in no time. DTM allows performing account changes, cancellation requests, and in general assisting customers at a rate and efficiency that wouldn’t be possible for a company relying on paper and physical cabinets.
• Human resources: New-hire paperwork, NDA agreements, payroll forms, and all sensitive documents and data involved in HR processes can be securely handled by a DTM solution. Higher data protection, process efficiency, and faster transactions convey a better image to your employees even before they start working for you.
• Sales: New customer sign ups and sales order processing can be easily automated to improve KPIs – such as shorter sales cycles and higher conversion rates. DTM can be used to send quotes and contracts digitally for clients’ review and signature without wasting time on emails and phone calls. With digital authentication, the verification of new clients’ identities can be performed effortlessly. DTM enables easy and efficient AML-compliant client onboarding.
• General administration and third-parties relationships: Whatever the task is about – when it involves documents to be shared, signed, and then stored safely – DMS is a game-changer. All administrative work can be streamlined and automated both internally for more efficient business processes and externally for clients, partners, and suppliers.
The DTM solution market
83% of decision-makers feel a pressing need for a DTM solution that is either not addressed or only partially addressed by their existing solutions. And this need becomes more urgent due to the expected growth of the volume of incoming information in the organization, as well as the expansion and diversification in information types. An outstanding 98% of companies reported some revenue impact due to poor transaction management, in the form of lost deals, prospects that abandon onboarding processes, disjointed experiences that create low customer satisfaction, and lost business due to the lack of self-service and consumer-oriented digital platforms.
The growth of the DTM market demonstrates the ever-increasing demand and effectiveness of this tool for modern businesses. The global digital transaction management market is valued at € 1,733.67 Million in 2020 and expected to reach € 14,374.84 Million by 2027 with a CAGR of 35.28% over the forecast period.
What are the benefits of digital transaction management?
Digital transaction management delivers great benefits to organizations regardless of their size and industry, on three levels:
1. Cost and time savings that make your business more efficient and profitable
Digitizing document processes means enabling actions on them across devices, at any time, and from anywhere. Employees, customers, and all stakeholders involved can access the document needed at the same time without having to be in the same place. This mobile enablement improves collaboration and boosts productivity. Moreover, DTM software can be integrated with other existing programs to minimize data entry and automate information flows between different platforms.
DTM decreases the business expenses and moves the needle on profits by:
- Removing extraneous costs related to paper processes
- Freeing up employees’ time to let them focus on more bottom-line-oriented activities
- Accelerating the time-to-revenue through shorter transaction times
With e-signatures, for instance, it’s been estimated that signing processes become 55%-78% cheaper than traditional paper-based ones. The same convenience is noticed in terms of time saved as 37 minutes vs. 5 days is the average time difference in obtaining the signed document.
2. Security features uphold safer transactions and high-level compliance
People are traditionally used to deal with papers, and the lack of familiarity with electronic solutions may lead them to be afraid of higher risks in digital transactions. Still, there’s no way to ensure total control on paper documents, nor could you have visibility on any changes made, or supervision on the document journey. That’s what DTM software is for.
• Every document carries in itself a digital audit trail detailing who accessed it, when, and what they did. Everything is logged, tracked, and monitorable. With permission settings and role-based access control, only authorized users are granted access to files and information.
• Cloud storage and automatic backups avoid any potential data loss. Document transfers can be encrypted, so you can safely send cases out, even with sensitive information involved, and be sure that they’re never exposed to the risk of tampering and fraud. Data retention policies can be set up to automate how long each type of document is to be stored and address data protection requirements.
• Digital signatures are just as valid and legally binding as handwritten signatures but much safer and reliable. Digitally signed documents embed cryptographic elements that can be used as legal evidence in the case of a dispute in court or objection to the document’s trustworthiness. The final PDF is locked for changes and certifies that the document is intact, untampered, and original.
3. Happier customers and better CSR performance
The rise of digital customers is a major drive for digital-oriented improvement. Digital transaction management improves customer satisfaction by giving clients an easy way to identify themselves and sign documents.
DTM is also the most effective way to achieve a fully paperless office. Reducing the company’s environmental impact might seem like a small step in the broader picture. But any organization holds the same responsibility (and potential) to trigger the so-called digital butterfly effect and shape the future standard of sustainable business. It’s about changing the mindset from “cutting cost to maximize revenue” to “cutting waste to optimize profits”.
Radical transparency and a conscious environmental approach are strong business differentiators, allowing you to attract and retain customers and stand out on the market.