(ROI) on a Digital Signature Solution

How to Calculate the How to Calculate the Return on Investment (ROI) Return on Investment (ROI) On a Digital Signature Solution

on a Digital Signature Solution

ARX | 855 Folsom St. Suite 939, San Francisco, CA 94107 | Tel. (415) 839-8161 | www.arx.com | [email protected]

Introduction Large and small organizations alike have found that requiring 'wet ink' signatures means that the investments they have made in document and workflow automation do not enable them to establish fully paperless processes. In order to collect signatures they must revert back to printing paper documents that must be physically signed, scanned, archived and routed, not to mention that the resulting files sometimes get lost. This bottleneck brings efficient business processes to a grinding halt while increasing operating costs. To address this issue, more and more companies are implementing digital signature solutions, which allow the organization to maintain a completely electronic workflow from document creation through to its signing, archiving and auditing. These solutions ensure that the company no longer has to interrupt its streamlined electronic processes by reintroducing paper into the Workflow. The purpose of this white paper is to help you establish the Return on Investment (ROI) that your organization can expect to achieve by deploying a digital signature solution. In order to quantify the costs of using paper-based signatures we use an example of a company with 200 employees who sign documents as a part of the organization’s operating policies and procedures. We then calculated The ROI and payback period by adding on the costs of implementing a digital signature solution. This paper concludes with a chart summarizing the figures you need in order to calculate your own ROI.

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ARX | 855 Folsom St. Suite 939, San Francisco, CA 94107 | Tel. (415) 839-8161 | www.arx.com | [email protected]

The Costs of Paper-Based Signatures As mentioned above, we will examine a company with 200 employees who each sign 250 documents per year (an average of 1 document per working day) as part of their operating policies and procedures. This number is based on the average usage we’ve tracked in the log data of actual CoSign customers (companies with fewer employees or in more paper-intensive industries may see lower or higher numbers.) This brings the company to a total of 50,000 signed documents a year, which translates into 100,000 pages per year if we take an average document length of 2 pages. As these documents are currently printed and signed manually, their associated costs include: Printing - The average cost of toner, ink and paper amounts to 3 cents per page. Printing 100,000 sheets of paper for signing purposes costs the company $3,000 per year. Routing - In order to remain conservative, we will only address the company’s external routing costs (not including those inside the organization). If we estimate that 35% of signed documents require some form of external routing, the company would spend $174,325 per year with the following breakdown: • Standard mail - 5% of the documents (1/signer/month) are routed by US mail at a cost of $0.83 per envelope (2,500 x $0.83 = $2,075). The cost is based on the USPS price for sending a large envelope-sized letter weighing 1 ounce across the US for three- day delivery. • Overnight couriering - 5% of the signed documents (1/signer/month) are couriered at a cost of $42.55 per package for overnight couriering (2,500 x $42.55 = $106,375). The cost is based on the FedEx Standard Overnight fee for a package weighing 0.10 pounds. • 2nd day shipping - 5% of the signed documents (1/signer/month) are shipped at cost of $26.11 per package for 2nd day shipping (2,500 x $26.11 = $65,275). The cost is based on the overnight USPS Express Mail flat rate fee. • Faxing - 20% of the signed documents (1/signer/week) are faxed at a cost of $0.03 per faxed page (10,000 x 2 pages X 0.03 = $600). Scanning - Since signed documents need to be archived either digitally or in paper form, we’ll assume that 50% of them require scanning in order to be digitally archived. If the hourly wage for the employee responsible for handling the scanning process is $10 an hour, and it takes him or her 3 minutes to scan and save each document (or 20 documents per hour),the company pays $0.50 per scanned document in hourly wages for a total of $12,500 per year.

ARX | 855 Folsom St. Suite 939, San Francisco, CA 94107 | Tel. (415) 839-8161 | www.arx.com | [email protected]

Paper Archiving - In the previous section we assumed that 50% of the signed documents in the company need to be archived digitally, which means that the rest needs to be archived in paper form. If we use the same hourly wage as before ($10) and an average of 5 minutes to file each document (or 12 documents per hour), the company pays $0.83 per archived document in hourly wages for a total of $20,750 per year. Document Loss and Reproduction - According to PWC, 7.5% of all documents in an Organization end up being lost and 20% of those require reproduction since they are never found. PWC estimates that it costs $120 on average to find a misfiled document and $220 on average to reproduce a lost document. Being more conservative, we will use 5% as the percentage of documents lost, $20 as the cost of finding a misplaced document, and $40 as the cost of replacing the documents that are never found. These numbers mean that the company loses 2,500 documents every year, adding up to $40,000 per year for finding them and $20,000 per year for reproducing those that are never found. The costs listed above do not include indirect costs such as the failure to realize the full potential of the organization’s investment in process automation, as well as the: • Costs incurred by workflow delays, such as lost business due to delays in signing agreements • Damage to the organization’s reputation due to documentation that is lost or cannot be authenticated. • Environmental costs of using paper which amount to ¼ of a tree, 3/8 of a barrel of oil, and 75 pounds of carbon emissions per signer, per year. The summary of quantifiable costs for the company (with 200 signers and 50,000 signed documents per year) is below. By dividing the total annual cost by the number of documents, we come to an average cost of $5.41 per paper-based signature, with an annual paper signing cost of $1,352 per signer. Again, this is a conservative estimate as Pfizer has previously estimated the cost at $30 per paper-based signature. Printing

$3,000

Routing

$174,325

Scanning

$12,500

Archiving

$20,750

Finding and reproducing lost documents

$60,000

Total annual cost of paper-based signatures

$270,575

ARX | 855 Folsom St. Suite 939, San Francisco, CA 94107 | Tel. (415) 839-8161 | www.arx.com | [email protected]

Calculating Your Organization’s Paper-Based Signature Costs To help you calculate your organization’s paper-based signature costs, we put together an Excel spreadsheet where you can enter the numbers that are relevant to your organization in order to calculate your total annual costs for paper-based signatures. The table below details the assumptions and calculations used in the spreadsheet, which also includes an ROI calculator as explained in the section below. Metric

Base scenario

# of signers

Use your actual figure

# of documents per signer per year

Use your actual figure (if you don’t know your organization’s actual figures, use 250 documents per signer)

# of pages per typical signed document

Use your actual figure (if you don’t know your organization’s actual figures, use 2 pages as the default)

Printing Costs

$0.03 per page

Pages Mailed

$0.83 per mail (or use your actual cost)

$0.83 x (percentage mailed-typically 5%) x (docs/year)

Pages Couriered

$42.55 per courier (or use your actual cost)

$42.55 x (percentage couriered-typically 5%) x (docs/ year)

$26.11 per shipment (or use your actual cost)

$26.11 x (percentage shipped-typically 5%) x (docs/year)

Pages Faxed

$0.03 per fax

$0.03 x (percentage faxed-typically 20%) x (docs/year)

Scanning Costs

$0.50 per document

$0.50 x (percentage scanned - typically 50%) x (docs/year)

Archiving Costs

$0.83 per document

$0.83 x (percentage archived - typically 50%) x (docs/year)

Lost Documents

5% lost; $20 to find (80%); $40 to replace (20%)

Pages Shipped 2nd Day

Your Costs

$0.03 x (pages/year)

(5% x docs/year x 80% x $20) + (5% x docs/year x 20% x $40)

ARX | 855 Folsom St. Suite 939, San Francisco, CA 94107 | Tel. (415) 839-8161 | www.arx.com | [email protected]

The TCO and ROI of a Digital Signature Solution The next step in calculating the ROI of a digital signature solution is to arrive at the Total Cost of Ownership (TCO) required to deploy and maintain the solution. The TCO is based on a number of factors including the cost of the initial system, the cost of the internal IT resources (or external professional services) for deployment, the annual vendor maintenance and support fees, and the annual internal IT maintenance cost, as well as any additional costs that are directly related to the digital signature solution. As mentioned above, we created an Excel spreadsheet where you can enter the numbers that are relevant to your organization in order to calculate your specific costs, TCO and ROI. For the CoSign Digital Signature solution, these costs would include: A CoSign Central Enterprise server with 200 licenses costs $9,000 for the server (including hardware and software) and $3,500 for each 25 signer license (the price per user falls sharply after the first 200 users) for a total cost $37,000. Support and maintenance are set at 20% per year. Since one of CoSign’s main advantages is its quick deployment and minimal ongoing management requirements, both the installation time and the annual maintenance time are estimated at 10 hours or less, with electricity costs of less than $100 a year and negligible server storage costs. To calculate the TCO and ROI for CoSign over a 4 year period: s CoSign Central Enterprise package (for 200 signers)

Cost of CoSign package + (No. of years x maintenance costs)

$37,000 + (37,000 x 20%) x 4

$66,600

No. of hours for installation + (No. of years x annual maintenance hours)

10 + 4 x 10

50 hours

Total IT labor costs (at $50 per hour for IT personnel)

No. of hours x Hourly IT labor cost

50 x $50

$2,500

Total electricity costs

No. of years x Annual electricity costs

4 x $100

$400

CoSign TCO + Total IT labor costs + Total electricity costs

$66,600 + $2,500 + $400

$69,500

ROI as percentage return on investment

(Total paper-based costsTCO) TCO x 100%

(4 x $270,575)–$69,500 $69,500

14.75% or 1,475%

Payback period in months

(Annual TCO / Annual paperbased costs) x 12

($69,500/4) / $270,575) x 12

0.77 months (*)

Total IT time (installation and maintenance)

Cosign TCO over 4 years

(*) This figure assumes complete rollout from day one, which is not usually the case as end users normally take time to change their working habits. Customers typically report it takes them 3-6 months to return their investment on purchasing and implementing CoSign.

ARX | 855 Folsom St. Suite 939, San Francisco, CA 94107 | Tel. (415) 839-8161 | www.arx.com | [email protected]

Conclusion These days, organizations find themselves evaluating all conceivable means of reducing operational costs and gaining competitive advantages. Transforming their processes from paper-intensive to paper-free, including all of their signature-dependent workflows, is one of the key ways to accomplish these goals. Each paper- based signature that an organization produces costs $5.41 in printing, routing, scanning, archiving and document loss recovery expenses. A typical signer signing around 250 documents a year (or an average of one per workday) costs the organization $1,350 a year in paper-related costs. This means that an organization with 200 signing employees will spend around $270,000 a year on the costs associated with paper-based signatures. Implementing the CoSign digital signature solution enables that same organization to reduce their annual operational costs by that amount, see a return on their investment in less than a month, and realize a four year ROI of more than 1,000%. In order to calculate the precise paper costs, TCO and ROI for your organization, you can download the Excel spreadsheet available on our web site.

About CoSign by ARX CoSign by ARX , the most widely used digital signature solution, was recognized as “the strongest digital signature solution” in the Forrester Wave: E-Signatures, Q2 2013 report. Millions of people at large enterprises, SMBs, governments and cloud services around the world use CoSign every day on their computers and mobile devices to easily add secure digital signatures to documents in Word, Excel, PDF, SharePoint, OpenText, Oracle, Alfresco, Nintex, K2, and many other applications and file formats. By seamlessly integrating digital signatures into existing document-related workflows, applications and services across their organizations, CoSign customers quickly transform slow and expensive signature-dependent processes into quick and efficient paper-free ones. They rapidly reach ROI through significant reductions in process times and paper-related costs, while ensuring trust, integrity, control and compliance across their business and IT environments. Contact us via email at [email protected] or by phone at (415) 839-8161 for a personalized demo and a tailored quote that you can use for your actual TCO and ROI calculation 270,575

ARX | 855 Folsom St. Suite 939, San Francisco, CA 94107 | Tel. (415) 839-8161 | www.arx.com | [email protected]