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This week we have the guest firm Horacio Mario Molina, co-founder of MQ Entrepreneurship and viafirma partner since 2016. We have already spoken on other occasions of the impact and benefits of digital transformation in the human resources sector. On this occasion, we will approach this sectorial reality in Latin America.
Legal Framework of the Digital Signature: a bit of history
The concept of Digital Signature (also known as Advanced Electronic Signature in Europe and some countries of the American region), began to take a look at reality in Latin America around 1998, when Mercosur pushed for legislation on its members.
Thus, in 1998, Uruguay became the first country in South America to have a digital signature and Puerto Rico in Central America. From there in 1999 followed Colombia, in 2000 Mexico and Peru, in 2001 Argentina, Brazil, Panama and Venezuela and so on were incorporated Dominican Republic, Chile, Ecuador, Costa Rica, Guatemala, Paraguay, Bolivia, etc.
At present, of the 33 countries in Latin America, only 7 do not have formal legislation in this regard. These are Cuba, El Salvador, Guyana, Haiti, Suriname, Dominica, Saint Kitts and Nevis.
In general, the application of the digital signature is not massive and it is in the last 3 – 4 years when it is beginning to understand its importance, advantages and fundamentally “what it is about”.
The reach of the internet, the massive use of banking transactions and the promotion of digital platforms by governments has managed to eliminate the fear of using a computer as a platform to carry out secure transactions.
Doing a bit of history, in the Argentine Republic for example, although the law is sanctioned in 2001, it is in 2012 when the use of digital signature in the private sector is regulated, for the signing of documentation of Human Resources and towards State agencies, exclusively. Until then, it was a law without practical application.
At the end of 2014 its use was extended by Administrative Decision 927/2014 to “any application” and it defines a Single Certification Policy, with which the signature can be used for any private activity, the time stamp is regulated, certificates of competence and application certificates. Then appear other private certifiers in the market (until then there was only one). The same happened in the rest of Latin America, it took a long time in the regulation of the law to be effective, today in frank development.
In 2016 with the platform of the state “Trámites a Distancia” (TAD), the end of the use of paper in the state is promoted in Argentina. With which, every day more procedures are carried out with the state in digital form and with signature, replacing paper bureaucracy and promoting digital management.
In the case of the Dominican Republic, the regulator in electronic signature is Law 126-02 of Electronic Commerce, Documents and Digital Signatures, dated September 29, 2002. In addition, the Dominican Institute of Telecommunications (INDOTEL, for its acronym in Spanish) is configured as an Organ Regulator. 4 years later, Avansi, subsidiary of viafirma, is the first certification authority in the country.
The basis of the regulatory framework of the digital signature in Colombia is as we indicated, one of the first specific legislations of the region. In Law 527 of 1999, two types of signature are recognized: digital signature (equivalent to the advanced electronic signature and, according to Decree 2364 of 2012, with mechanisms that guarantee authenticity and integrity) and the electronic signature with significant reduction in the burden of proof. Decree 1747 of 2000 defines the certification entities. The publication, in August of 2017, of Decree 1413 prohibits the use of software certificates in client, limiting the signature to token devices or centralized signature (signature in the cloud).
In Paraguay, the law was signed in 2010 and achieved its regulation in 2014. Being broader in its application than the Argentine counterpart since its inception, it is hindered by the fact that only signing certificates are accepted in portable cryptographic devices (eToken). This prevented in the beginning the application of the signature in the area of human resources, precisely for the cost of each token. In 2017 it was approved to use certificates in software store, thus promoting the area of Human Resources and legislating in this regard.
In Uruguay, the law was regulated in 2009, and began to be promoted in 2013 with the creation of the new chip identity card (similar to the Spanish one) where it has an advanced electronic signature certificate and with which it can be made paperwork with the government, police complaints, etc. The cryptographic token is also used in Uruguay as a storage medium for certificates.
In Brazil, the evolution is similar to that of Argentina and Uruguay, being in 2016 when it began to require companies with more than 5 employees to use Digital Signature to subscribe, transfer and file electronic documents, including tax and labor declarations for the electronic billing program of the Federal Government.
In 2017 the certification of digital origin between Argentina and Brazil began to take effect, within the framework of Mercosur, for exports between Argentina and Brazil for the goods negotiated in the field of ACE 18 (MERCOSUR) and ACE 14 (Automotive Agreement Argentina- Brazil).
A growing market
Returning to the concept that concerns us, Human Resources, these are the ones that have the most progress in the area of the region. Especially in the last 3 years, where specific regulations have been promoted to allow and expand their use and also the implementation of the use of electronic signatures in employee receipts, where legislation is more rigid and does not allow the lodging of certificates in centralized servers (HSM) (except in the most recent legislation such as the Colombian one (August 2017)).
Each country has minor variants but all within the same policy framework, especially in South America, where in the context of Mercosur, the letter of intent of unification of criteria and recognition of signatures between the member and associated states is respected. The equalization in legal value between the electronic and digital signature (with the limitations of “non-repudiation”) has achieved the explosion in practical use.
There is a growing interest in companies to get rid of paper, logistics difficulties (taking into account long distances especially in Brazil, Argentina or Chile) and the security and usability of storage make the digital field very tempting.
It is expected that between 2018 and 2022 there will be an important upturn in software investment for the management of human resources, estimating a growth in this aspect by 22% in Argentina and Brazil, 20% in Colombia and 13% in Chile, while the estimated in Spain for the same period is 8%. (Conclusions revealed in the presentation of the latest report on Technological Evolution of the specialized consultancy IDC)
The collective feeling in the countries of the region is that they have become aware of the simplicity of the process, the reduction of costs and the comparative advantages with traditional methods.
The wide scope of the use of digital documentation in human resources makes it easier every day to explain the concept of digital signature to the common people. The new generations that join the commercial world, already imply the use of technology and escape the personal realization of procedures and management. This accelerates the processes of insertion of digital information mechanisms.
The profile of Human Resources professionals, business leaders and governments in particular throughout the region, are promoting the application of technology in all aspects of business operation, having already checked the efficiency of the methods.
Latin America is a global provider of labor in software development. Companies from Argentina, Uruguay and Brazil are mainly number one in the development of applications for international companies, with which the available technology and human resources for development are at a world level, making in these cases a shorter integration gap between emerging countries and the advanced economies of the United States or the European Union.
The area of Human Resources: from the reactive to the proactive attitude
From Human Resources, the technological scope is now available to offer managers instant information on personnel profiles, documentation, absenteeism status, penalties, licenses and payment of assets. This is possible due to the digital management of the information that, thanks to the digital signature application, gives the legality plus that makes the management personnel clearly opt for this option.
The decision layer of a company evaluates as a first measure the economic benefit of the change, with which we had to change the angle with which the promotion of digital processes was faced.
A few years ago we stressed the speed, safety and efficiency of digital signature and guard procedures, over inefficient and insecure paper handling.
Nowadays it is easy to demonstrate that the cost in pesos or dollars of the process of digital document management against the value in hours of the information generation personnel, distribution logistics and final storage personnel of the document is widely advantageous in the digital framework.
To do this we have made a simple example of ROI calculation (return on investment), where it is clear that in a very short time the investment is recovered and economic profitability is added to all the “real and intangible” advantages of the digital management (The values are calculated in Argentine pesos and referentially, but can be equivalent to any currency).
And on the other hand, the HR area ceases to be reactive within the organization and becomes proactive. For all this, new auxiliary disciplines such as Big Data or Machine Learning are incorporated. From Human Resources with the use of technology, information tools will be available in a short period of time to propose options and risks and prevent circumstances in order to correct them in time.
This change of concept implies a change in the role of the Human Resources professional, turning him into a Resource Analyst, who enhances and qualifies his function, surpassing the mere “liquidator of salaries” with which the sector was traditionally identified.
These profiles are in a period of formation in the region, with which we will soon notice a growing change in the organizational and functional structure. The functions of “coaching” and “information management” will be the ones that will gain impulse and will generate an empowerment in the training of the human resources of the companies in situ.
Pillars of the digital transformation of Human Resources
This technology is supported by two basic concepts these are the pillars of this transformation:
- Digital Signature
- Digital Documentary Management
In the region, digital transformation is taking an important step forward, accompanied by the existence of software that allows this management to be adapted to market values, with powerful tools and at reasonable costs.
The next 5 years will be a key factor in this development, what in its moment more than 15 years ago was called “evangelization”. They insisted on giving talks, conferences and journalistic notes, so that the common people could understand the difference between a scanned signature and a digital signature. The concepts of Integrity, Non-Repudiation and Authorship, which until then were words never thought, now become common knowledge. Even in countries with less technological development, progress is already being made in leaps and bounds.
The time has come for the digital revolution of Human Resources. The key is the Digital Signature, we have the technology at hand, the business decision is appearing and companies already understand that accompanied to the economic benefit there are many and more great benefits and improvements for all those involved in the cycle of a document. The distance stopped being a problem, now we have a slogan “your document, wherever”, which summarizes the functionality of a secure digital document.
INDISE-VIAFIRMA, a binomial at the service of HR
In the case that concerns me, the fact of being Viafirma Partners in the region, gave us the possibility of integrating our INDISE products to the Viafirma Documents family and Viafirma Inbox, with which the power of the tools we can offer is unmatched in the market.
This alliance and shared knowledge allowed us to become the first approved software as “despapelizador” in Paraguay. This means that a paper digitized by INDISE, digitally signed by Inbox in a transparent way and stored in the Web INDISE using a digital signature certificate of the Paraguayan E-Signature licensor in a single step, gives the digital document an original quality, allowing to get rid of the paper (destroy it).
This approval process obtained at the beginning of 2018 and that took more than a year of audits and reviews of the Ministry of Industry and Commerce of Paraguay, opens another market and demonstrates the possibilities of technological integration.
Both our INDISE and Viafirma products are widely integrated with third-party software, making simple a complex implementation. The large volume of pre-existing paper documents in the human resources offices makes this suite of products an important ally when choosing the digital path.