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E-Signature adoption in Japan: The hybrid nature of digital transformation

E-Signature adoption in Japan: The hybrid nature of digital transformation

E-signature Survey Data Shows Hybrid Corporate Environments

It is uncommon for two companies’ competing in a marketplace to cite one another, but at SignTime our view is we want to help people understand and adopt digital transformation, consistent with our Corporate Mission of bringing all paper workflows online.

In August this year, market researcher Professional Tech Research Institute published an interesting market study on behalf of CloudSign, a subsidiary of Bengo4.com highlighting that Japan is a hybrid market with a mixed paper and electronic approach, even for those companies using e-signatures and similar products.  We have always had a large amount of respect for CloudSign, as one of the innovators in the e-signature space in Japan. We believe their findings are insightful and give an interesting snapshot of the state of digital transformation in Japan as a whole.  

The survey found that among the CloudSign customers polled, a whopping 85% of respondents said that they had used a physical seal (hanko) on an external business document in the past year. Internal business documents, theoretically the easiest to gain adoption, still had a 70% response rate of physical seal usage.

The survey had some other interesting gems as well:

  • Contracts were the number one document type requiring a “hanko” with a physical signature.
  • “Business practices and preferences of counterparties” was the number one reason given (65%) for continuing to use paper.
  • 70% of those polled said that hankos should be eliminated for internal documents altogether.

This survey shows some of the realities of digital transformation within Japanese corporations, particularly as it relates to that digital last mile, the e-signature.

Now for the Good News!

At SignTime, we also see a hybrid approach to DX in some parts of our customer base, particularly with respect to documents and contracts between unrelated parties.  SignTime’s focus has always been focused on enabling ease of use and eliminating friction from the back office. That sometimes means recognizing that there are many documents that are not contracts that still require signature/recorded authorization.  We also think the translation of ‘e-signature’ to denshi keiyaku 電子契約 (literally electronic contract) may have inhibited the growth of the industry in its early days as a contract requires a degree of diligence and preparation that is materially different from a signature of assent.

Lowering Barriers to e-signature Adoption

In SignTime’s case, we’ve focused on being the fastest and easiest to use service, with our internal data showing that a typical SignTime contract sent via SMS for e-signature is signed in 28 minutes. Our platform has also been implemented in a fashion that does not require an external cost (timestamp or long term signature, Japanese link) for every document, but instead allows the sender to choose as is appropriate.

One of the other things that we have spent a fair amount of time and effort on is having the best hanko experience for a Japanese back office. This means enabling printing in portrait or landscape mode, allowing a user to insert spaces if entering via a keyboard, or, alternatively, uploading his own hanko.  Happily, the pictures in some parts of the market are much brighter still, as firms in real estate, technology, education and embedded SaaS products are much further along the adoption curve.  This is likely due to the extreme competitive pressures in these industries and they also tend to be younger and more nimble, when compared to their larger corporate counterparts.

Digital Transformation (DX) is the Key

We are also firm believers in starting small.  Time and again, we see a customer deploy a SignTime solution in a very specific part of their businesses as a way to modernize a business process.  We’re thinking here of things like managing outsourcing agreements with staff, automating university registration documents, or digitizing the bookings process for a major restaurant chain.  Once these digital transformation (DX) projects are completed, it usually leads to other areas of the business deploying e-signatures for forms and other internal documents.  If you have not had the chance to read our blog last month on digital transformation, we cover several recommended approaches in a reasonable amount of detail.

At SignTime, we’re  big believers in the e-signature and electronic contracting market in Japan, and while adoption in parts of the market is slow due mainly to cultural factors, there are other areas of the market to be extremely enthusiastic about.  Faster, more nimble, and innovative companies are jumping on board with e-signatures in Japan, and once they have gotten a taste of the incredible time savings, reduced costs and reduced environmental impact, there is no going back!

References

Link to Survey Results (in Japanese)

“CloudSign” is a trademark or registered trademark of Bengo4.com, Inc.

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