During CEO Keith Krach's keynote at DocuSign's London event this week, one of the slides that kept grabbing my attention, and one that Krach kept highlighting, was comparing the value and speed to benefit of implementing ERP versus CRM versus DTM (see picture below).
As you can see, the value of DTM and its speed to benefit is significantly greater than that of ERP and even CRM, according to DocuSign. But what is DTM I hear you say? Not another acronym that digital buyers and decision makers are going to have to get to grips with? Unfortunately, yes.
But perhaps Digital Transaction Management is worth some attention. In fact, when thinking about digital enterprise, it is such an obvious use case that it's surprising that people don't discuss it more. How can a company be truly 'digital' if for every transaction it is having to revert back to the cycle of printing paper, posting and signing in order to complete it?
That's essentially what DocuSign is selling as a concept. Whilst its early ambitions focused on just e-signatures, it is now positioning itself as an end-to-end digital process for any enterprise transaction, from HR to sales to procurement. Take a read of Phil's story on diginomica from last year to give you some more detailed insight, but DocuSign is hoping that its platform can act as an integration layer across an enterprise's technology stack and be used to deliver digital processes and transactions. It has extended its offering to include workflow management tools, and even payments within DocuSign, for example.I got the chance to sit down with DocuSign's EMEA chief, Jesper Frederiksen, at this week's event. And one of the first things I asked him was: do people roll their eyes or sigh at the prospect of another software category being sold to them? Do they get what DTM is? Frederiksen said:
No, because people don't really know what it is yet. We sit down and say what we believe DTM is all about – we do it in very simple terms by identifying their internal systems, identifying their stakeholders and then by asking them what happens in the middle? People just get it, it's not rocket science, it's the the glue between internal and external stakeholders.
I was also keen to find out if when having sales conversations with companies, do companies even realise that digital transaction management is a problem that they have? Paper is so embedded in the daily processes of most companies out there, I for one can't recall the last time I had a conversation with a digital buyer when minimising paper transactions was at the top of the agenda.
Frederiksen said that this varies from company to company, but what it usually takes is for a senior executive to experience DTM externally and then drive the agenda internally. He said:
One of the things that we always talk about is that we have a big job of taking what we do from a 'like' to a 'must'. But having said that, we are seeing a new breed of organisations come out who rethink how you transact any form of business. You are seeing a subset of the market that get it and proactively go out and differentiate by doing things differently. That does have the effect on the less-forward thinking organisations, who then see that they have to compete against a new group of players that move at a different pace.
“It's hard to define an exact profile of who is the leading edge, but what we do see is that it is often a forward looking, dynamic, digitally aware senior executive that is saying internally that the company can do things better. And seeing that they can differentiate and disrupt. I think it's more down to the individuals, as opposed to the nature of the company.
The business case
That's something that we see time and time again. But what's particularly interesting about DocuSign is that it seems to be a digital technology where actually putting a hard ROI on the use case is indeed possible. Whilst a lot of other digital roll-outs talk about engagement, or getting closer to the customer, or scalability – all of which are relevant here too – DocuSign does, however, have the ability to point out that huge efficiency gains are possible. Frederiksen said:
“[The ROI] is a huge selling point. And the good thing is that the customers we are working with, we are working with them pretty closely, so we do get hard data back. It's not just estimates or made up numbers. If you close a contract and have to send a DHL courier around the world, there's some hard dollar savings there. Even more importantly, there's the soft value there too, what does it mean if I close this deal in a day as opposed to ten days? What is the value of not having any manual intervention and the sales guy doesn't have to make sure that everything is printed and packaged up etc?”
But despite this, Frederiksen did admit that this doesn't mean that the roll-outs are enterprise-wide. He said that, instead, businesses tend to start with one process, get the buy in, and then focus their attention on the next process. It's a slow burner.
The thing is, most of our large customers never fully get set up. 'Use case' is a term we use quite a lot in DocuSign. A use case is basically just a process. Most large companies of course say they want to start in sales contracts, or others might say they want to start in HR for on-boarding of candidates. Many large companies start in procurement doing supplier agreements. We are yet to see a company say “that from this point all paper will be gone and all processes will be digitised”.
Unfortunately it doesn't move that way. It's very much a rolling project where you take use case by use case.
But in things like HR, a classic use case is combining the internal sign on process and getting the external offer out to the candidate, in one integrated transaction. Why don't we get our CFO and our hiring manager and our head of HR to approve before the transaction goes out to the candidate? So you do see people re-thinking their business lines.
DocuSign has now created a group of business consultants to help their customers identify the best use cases across their organisation and to also help them address the change management challenges that arise as a result.
And change management is one of the biggest challenges facing DocuSign customers when they decide to adopt the solution, as is often the case with a software implementation. Frederiksen said:
Most of the resistance or delays are more about just normal change process. We are taking a process that has sometimes been there since the inception of some of these businesses and then we are suggesting to re-write them fairly significantly. I think it's just human nature to not want to move too fast.
Growing upFrederiksen also said that one of DocuSign's biggest challenges in scaling the organisation and allowing customers to do multi-country rollouts, is ensuring that it complies with all of the legal frameworks relating to digital transactions within each of the regions it operates. He said that the UK is “blessed” with a very clear and pragmatic legal system, but this isn't necessarily true of all countries that DocuSign has its sights on.
The best analogy of what we are trying to accomplish is when you think of a Visa card. When you go travelling, you just carry your Visa credit card. You don't worry about the banking system wherever you are in the world, you don't worry about the regulations, you just trust Visa to be able to transact for you. That's the same thing that we are trying to achieve with DocuSign.
We want to build a global platform that you can put your business transactions on and we will figure out the complexities that happen under the hood, of making that into a legally binding contract whatever jurisdiction you're in.
We know pretty well what we have got to do here. We have got to take a technology that is clearly the market standard in the US, that is the market standard in the UK, has in a very short time gained a strong presence in Australia – and now we have to take it global. So that's the number one theme of this business. We have this rich application, it's been built over a long period of time, now let's really scale it out and solve the technology challenges that each market will represent.
With DocuSign recently receiving $233 million in a round of funding, with estimates suggesting that this values the company at $3 billion, it is obvious that there is appetite for the solution. And Frederiksen estimates that less than 5% of the DTM market has been tapped so far, which isn't hard to agree with given the paper transactions we see on a day-to-day basis.
But Frederiksen was keen to highlight that this doesn't mean that DocuSign is intending to encroach too much on other areas of the software market (e.g. CRM, ERP, collaboration). Instead he wants DocuSign to be seen as a powerful integration layer that brings all of these systems together across the enterprise. He said:
And this is the focus going forward, according to Frederiksen – deeper backwards integration into enterprise systems and applications, as well as improving on features around the transaction, such as payment and long-term contract management and retention. How will this be done? A lot of it has to do with being chummy with the leading sellers in the industry and making sure that DocuSign is an open platform that can easily be that much-desired integration layer. Frederiksen said:
We are the last mile in many transactions. How do you get all this great stuff that you have on the inside and expose it to a stakeholder on the outside and conclude a binding transaction?
We now talk much more about the transaction management, as opposed to the signature. The signature itself is nice, but it's not that impactful. But what's really impactful is if your SAP system, your Office system, or your CRM system is completely integrated and at no point you go to paper or analogue during that process. That's what's really impactful and that's why we came up with this term Digital Transaction Management – DTM.
We have got to execute on all of these partnerships. We are blessed that the likes of SAP, Salesforce, Microsoft are our good friends. How do we go out and actually work with them and deliver success in each of the markets around the world? If we do those two things well, we will be sitting here two years from now and be extremely happy. That in itself is going to make this business grow even faster and be even more successful.