For each tool to be implemented, for each business process to update, it is essential to take into consideration the ROE – the famous ‘return on investment’ which holds its sway in management circles. Indeed, ROI is the key to strategic decision making in terms of investment, so that resources are allocated as efficiently as possible. When you consider the possibility of adopting an electronic signature, it is therefore logical to consider the profitability of such a tool. What is the ROI of the online signature? What savings can you generate by switching from the physical signature to the electronic signature? Oodrive explains all in this article.
How do you calculate the ROI of the electronic signature?
RoI, or Return on Investment is a tool which enables the comparison of two variables – generally income and expenses – and to extract a profitability rate. Expressed as a percentage, this indicate provides a clear idea of the financial benefits related to a process, a tool or an investment. The higher the ROI, the more favourable the ratio of income to expenses.
To determine the profitability of an electronic signature tool, there are two ways to proceed: compare the online signature process with that of the physical signature, and then assess the concrete gains provided by the former; or determine the ROI of the electronic signature itself in its own right.
Electronic signature VS handwritten signature: the ROI match!
Let’s assume that we want to compare the two processes, to show management the appeal of adopting an online signature tool. To do so, we will base our approach on two variables:
- The average annual cost of the physical signature process, including all the accounting variables. In other words: spending on paper, for printing (including purchases of cartridges of ink or toner, maintenance of devices, etc.), and for postal mail (envelopes, stamps, couriers, etc.) and for archiving (dedicated spaces, acquisition of filing cabinets, etc.).
- The average annual cost of the distance signature solution: price of the solution (paid in cash in a lump sum or via subscription, equipment (computers, tablets or smart phones), maintenance and related costs.
The calculation formula for the ROI is as follows:
(average annual cost of the physical signature – average annual cost of the electronic signature)/average annual cost of the electronic signature x 100
For example, if process No. 1 costs you 20,000 euros per year and process No. 2 costs 15,000 euros, that equates to an ROI of 33% for process No. 2.
The remote signature: a profitable investment?
Once you have adopted your electronic signature solution, you would like to assess its overall profitability. The question then is: based on the investment carried out, what are the gains generated by this tool?
To calculate the ROI, we use the following formula:
(gain/oss – cost of investment)/cost of investment x 100
While the formula itself is simple, the calculation is much less so. Because, while it is easy to calculate the cost of the investment (which corresponds to the amount paid out to acquire the tool or obtain the licence, to which regular spending must also be added – maintenance, purchase of new features, etc.), it is much more complicate to assess the related gains or losses.
The benefits that the electronic signature offers
If we want to estimate the gains generated by the use of a remote signature solution, we must take account of four variables:
- The savings generated compared with the physical signature process (paper, printing, sending, archiving).
- Productivity gains of teams. Indeed, the simplification of the process and the automation of tasks tends to accelerate the life cycle of the documents to be signed. The outcome, a marked reduction in the number of hours spent by collaborators in document management – hours which have a cost for the company – but also hours saved to focus on higher value added tasks. And, not to mention the almost absence of risk of error or loss.
- The benefits which can lead to increased sales, thanks to two phenomena: rapid execution (accelerating document processing and encouraging prospects to commit) and improving the customer experience (which in turn leads to a better image for the company).
- The use made of the solution: how many documents are sent to be signed per month, and how many people use the tool.
ROI of a remote signature tool: the Oodrive Sign example
The variables necessary for the ROI calculation depend a lot on the company which implements the solution. However, we can estimate the gain, based on the size of the organisation, from certain variables.
Thus, with Oodrive Sign:
- A very small company with 10 collaborators which each send 15 documents to be signed per month, generate an annual saving of 8,100 euros per year, as well as time saved equivalent to 0.6 FTE (full time equivalent). If we start from an investment of 9 euros per user per and per month, i.e. around 1,000 euros per year, to which we add 500 euros for various expenses, the ROI of Oodrive Sign comes to 440% from a purely financial perspective only!
- A small to medium-sized company with 50 collaborators which each send 40 documents to be signed per month, would generate an annual saving of 108,000 euros per year, as well as time saved equivalent to 7.7 FTE. At a cost of 5,400 euros per year + around 2,600 sundry expenses, the ROI of Oodrive Sign comes to 1,250%!
In act, the greater the number of documents to sign, and the greater number of collaborators who use the remote signature, the greater the contribution of the tool will be in generating savings.
Regardless of the size of the company, using Oodrive Sign is definitely profitable from an economic point of view – without even taking account of the positive impact it can have on brand image. By calculating your theoretical ROI ahead of time, you can present your numbers to your hierarchy and demonstrate that the adoption of the electronic signature is just simply the way to go!