By 2003, pharmaceutical giant Pfizer found itself with a costly business problem: Paper. Reams of paper. Mountains of paper. Pfizer was up to its neck in the stuff.

Any drug research project generates masses of paper, including documentation that must be signed and tracked for legal and patent-protection reasons. And all that paper needs to be categorized, filed and stored — a costly, time-consuming and labour-intensive process. "[Research] has always been an intensely paper-filled process," sums up Leslie Holbrook, Pfizer's director of worldwide business technology.

"Literally, you can fill a tractor trailer."

A digital signature is a tremendous driver in a pharmaceutical environment," says Holbrook.

All enterprises churn out paper, but the pharmaceutical industry generates more than most, as its business involves an especially high level of documentation to navigate a dense web of government regulations and protect itself against the spectre of looming lawsuits. "A digital signature is a tremendous driver in a pharmaceutical environment," says Holbrook. To wit, every document Pfizer could sign digitally would be one less piece of paper it had to manage and store. And then there's the issue of speed. Pfizer's research groups must sign, date and have witnessed every single entry in their lab notebooks. That's about 14,000 signatures a month. Just in case one of those entries might turn into a patentable product, Pfizer wanted the earliest possible date on each entry. But with researchers having to wait to find the right person to witness the entry, that wasn't happening.

Within Pfizer's research groups, digital signatures, enabled by the smart cards, are transforming those previously unwieldly lab notebooks

Pharmaceutical, finance and health-care enterprises, among others, are now being pushed to digitize signatures for reasons of security and compliance, sys IDC's Sally Hudson, research director, security products and services. In a nutshell, digital signatures lower costs and decrease complexity while increasing security, she says.

"Compliance regulations are going to become more specific and intricate over time, and the penalties for non-compliance will be strictly enforced," Hudson says. "The use of digital IDs and electronic contracts will become more commonplace over the next several years."

But necessity is not the digital signature's only mother. IDC believes that the move to digital signatures, when complete, will make compliance with government regulations easier and less costly, protecting companies as well as consumers. Hudson sees digital evidence increasingly being accepted as proof in courts of law, and online contracts becoming legally acceptable.

In other words, companies that perfect their processes for digital signatures and ID management will gain an immediate competitive advantage over those that don't.