What is digital fax?

The evolution from analog to digital fax

Introduced in the 1980s, traditional fax technology relied on analog telephone lines to transmit document images between locations. Fax machines would scan documents, convert the image into audio tones, and transmit them through telephone lines to another fax machine that would reconvert the tones into a printed document. This process, while revolutionary for its time, had significant limitations including slow speeds, paper jams, poor image quality, and the need for dedicated phone lines.

Digital fax appeared in the early 2000s as organizations sought more efficient document transmission. Electronic fax technology converts documents to digital formats (typically PDF or TIFF) and transmits them using Internet Protocol (IP) networks. This evolution has enabled faxing to remain relevant in a digital world by addressing the limitations of analog faxing while preserving its core security benefits.

In the mid-2010s, as organizations increasingly adopted cloud computing for critical business functions, cloud fax solutions emerged. Delivering digital fax capabilities as a service, it eliminated the need for on-premises infrastructure entirely. This approach has been accelerated by the Federal Communications Commission's 2019 Memorandum of Opinion and Order 19-72, which allowed companies to decommission copper wire phone services as of August 2022, enabling organizations to transition away from analog fax lines.

Cloud fax offers several advantages, including automatic scaling to accommodate volume fluctuations, geographical redundancy for higher reliability, simplified deployment, and reduced IT management requirements. It also provides enhanced security features and better integration with modern cloud-based business applications. For organizations with hybrid work environments, cloud fax ensures consistent access to fax functionality regardless of employee location, supporting business continuity and operational flexibility.

How digital fax works

Digital fax operates on a fundamentally different technological infrastructure compared to traditional faxing, though the result—secure document transmission—remains the same. The process typically follows these steps:

1. Document creation or digitization: The sender creates a digital document or scans a physical document to convert it into a digital format.
2. Transmission preparation: The digital fax solution prepares the document for transmission, which may include formatting, compression, and encryption.
3. Routing with internet DID numbers: Digital fax systems use internet-based Direct Inward Dialing (DID) numbers to route faxes. These virtual numbers receive incoming faxes over IP networks, replacing traditional phone lines while maintaining compatibility with legacy workflows.
4. Digital transmission: Instead of using audio tones over phone lines, the document is transmitted via IP networks, which can include the internet, private networks, or cloud infrastructure.
5. Secure delivery: The document is delivered to the recipient's digital fax system, email, or other designated endpoint with verification of receipt.
6. Notification and storage: Both sender and recipient receive confirmation of successful transmission, and the document is stored securely according to configured retention policies.

This process eliminates the need for paper, toner, and physical hardware while maintaining the secure point-to-point connection that makes fax communications inherently secure.

Why digital fax remains critical for modern businesses

Still essential for secure communication

Despite the rise of email and digital tools, fax remains a trusted method for secure communication in regulated industries. Its peer-to-peer transmission ensures a direct, secure connection—unlike email, which can be intercepted. Fax also provides delivery confirmations with timestamps and recipient details, supporting compliance needs. Digital fax enhances this with encryption, access controls, and audit trails.

Key industries using digital fax:

Healthcare
About 70% of hospitals still use fax to exchange protected health information (PHI), helping maintain HIPAA compliance. Digital fax integrates with EMRs, reducing risks tied to printed documents. For example, Baptist Hospitals of Southeast Texas saved $200,000 annually and improved efficiency by 20% using OpenText digital fax.

Legal
Fax remains legally binding in many regions. Law firms use digital fax for secure document exchange, audit trails, and e-discovery. It ensures compliance and efficient information governance.

Financial services
Banks and insurers use digital fax to securely transmit sensitive documents like credit applications and claims. It supports compliance and offers a cost-effective alternative to networks like SWIFT. U.S. insurers The Standard and Hawksford improved efficiency and compliance with OpenText solutions.

U.S. Public sector
Government agencies use digital fax for secure, compliant transmission of sensitive documents. It supports standards like HIPAA and FedRAMP, offering encryption, access controls, and audit logs. Cloud-based faxing with secure IP routing modernizes legacy systems.

Regulatory compliance and digital fax

Digital fax remains vital for industries facing strict data privacy and security regulations, offering built-in features that support compliance.

HIPAA in healthcare

Digital fax supports HIPAA compliance through:

• Encryption of PHI in transit and at rest
• Access controls to restrict document access
• Audit trails tracking document activity
• Transmission confirmations for delivery proof

A HIPAA Journal report highlighted a breach at OhioHealth’s Grant Medical Center, where PHI was faxed to incorrect recipients—underscoring the need for secure digital fax systems.

Financial services regulations

Digital fax helps meet requirements from:

• GLBA: Protects customer data
• PCI DSS: Secures credit card information
• SOX: Ensures proper financial recordkeeping

These systems offer secure transmission, audit logs, and integration with document management tools.

GDPR and global privacy laws

Digital fax supports international data privacy laws like GDPR by:

• Minimizing data collection and storage
• Enforcing retention policies
• Securing data in transit
• Logging transactions for accountability

Industry certifications

Top digital fax providers, like OpenText, meet recognized standards:

• ISO/IEC 27001: Information security
• SOC 2 Type II: Security and privacy controls
• PCI DSS: Payment data protection

These certifications assure organizations that their fax systems meet high compliance standards.

Benefits of transitioning to digital fax

Business benefits of digital fax

Switching from analog to digital fax delivers significant gains in efficiency, cost savings, and operational agility. Beyond regulatory compliance, digital fax supports broader digital transformation goals.

Scalability and flexibility

Analog fax systems struggle to scale with fluctuating demand. Digital fax adapts easily to changing volumes without added infrastructure. It also offers flexible deployment—on-premises, cloud, or hybrid—tailored to organizational needs and budgets.

Cost and efficiency gains

Digital fax reduces costs tied to hardware, phone lines, paper, and toner. Cloud-based models eliminate capital expenses and operate on a pay-as-you-go basis. It also streamlines operations by removing manual tasks like printing and scanning, delivering documents directly to inboxes or workflow systems.

Workflow integration

Modern digital fax integrates with key enterprise systems—EMRs, ERPs, CRMs, and MFPs—automating document handling and embedding fax into daily workflows. This boosts productivity and minimizes training needs, especially in environments where fax is critical to business processes.

Common challenges in transitioning to digital fax

While the benefits of digital fax are compelling, organizations may encounter challenges during the transition from analog to digital fax systems. Understanding and addressing these challenges is essential for a successful implementation.

Legacy system integration

Many organizations operate legacy systems that were designed to work with traditional fax machines. Integrating these systems with modern digital fax solutions may require custom development work or middleware to ensure seamless operation. Organizations should evaluate potential digital fax solutions based on their ability to integrate with existing systems and their flexibility in supporting custom integration requirements.

User adoption and training

Employees accustomed to using physical fax machines may resist changing to digital alternatives due to familiarity with existing processes. Overcoming this resistance requires a comprehensive change management strategy that includes user training, clear communication of benefits, and possibly a phased implementation approach that allows users to gradually transition to the new system.

Ensuring compliance with industry regulations

Different industries have specific regulatory requirements for document transmission and storage. Organizations must ensure that their selected digital fax solution complies with all applicable regulations, including those related to data privacy, security, and record retention. This may involve configuring retention policies, implementing appropriate access controls, and establishing audit procedures.

Best practices for implementing digital fax

Assessment and Planning

Before implementing a digital fax solution, organizations should assess current fax usage, volumes, and integration needs. This evaluation guides solution selection and helps develop an implementation plan that minimizes business disruption. Planning should also define success metrics, set a timeline, and identify risks with mitigation strategies. Organizations with complex needs may benefit from consultants specializing in digital transformation.

Solution Selection Criteria

Key factors to consider when evaluating digital fax solutions include:

1. Security: Review encryption, access controls, and compliance certifications.
2. Integration: Ensure compatibility with existing systems and workflows, especially mission-critical applications.
3. Scalability: Confirm the solution can handle future growth and volume changes.
4. Support & Reliability: Assess vendor support, SLAs, and disaster recovery capabilities.
5. Total Cost of Ownership: Account for implementation, subscriptions, and custom integration costs.

Implementation and Change Management

Effective implementation requires detailed planning and strong change management. A phased rollout—starting with departments that benefit most—helps resolve issues before wider deployment. Change management should include user training, clear communication of benefits, and accessible support. Appointing departmental “champions” can encourage adoption and provide localized assistance.

How OpenText digital fax solutions transform business communications

OpenText digital fax solutions

OpenText delivers robust digital fax solutions tailored for diverse industries. With over 40 years of experience and more than 12 billion documents processed annually, OpenText is a trusted leader in the digital fax space.

OpenText™ Fax (RightFax)

OpenText Fax is a scalable fax server that enables secure, paperless faxing for users, applications, and systems. It reduces costs by connecting to analog, digital, VoIP, or cloud telephony and integrates with email and desktop tools to boost productivity and support compliance.

Deployment options include on-premises, hybrid, and managed services, offering flexibility to match IT strategies. OpenText Fax also integrates with enterprise platforms like SAP, Oracle, Microsoft SharePoint, and EMR systems such as Epic, Meditech, Cerner, and Veradigm.

OpenText™ Core Fax

OpenText Core Fax is a SaaS cloud solution that supports secure faxing from desktops, email, mobile devices, business apps, and MFPs. It streamlines workflows and eliminates the need for phone lines and physical fax devices. With infrastructure in the US, Canada, Europe, and Australia, OpenText Core Fax supports data residency needs and enhances compliance through secure delivery and centralized recordkeeping.

Customer success

Organizations have achieved measurable results with OpenText fax solutions. The University of Kansas Health System reduced transmission failures and improved patient care by switching from an unreliable off-cloud system to OpenText Fax. ZOLL Medical, facing surging fax volumes, adopted OpenText Fax Cloud Connect to improve scalability, security, and reliability—supporting their mission to deliver life-saving care.

The future of digital fax

As organizations continue their digital transformation journeys, digital fax will remain a critical component of secure information exchange, particularly in regulated industries. The future of digital fax includes several emerging trends that will further enhance its value proposition.

Integration with artificial intelligence and machine learning

Future digital fax solutions will increasingly incorporate artificial intelligence (AI) and machine learning capabilities to automate document classification, data extraction, and routing. These capabilities will enable organizations to streamline their document-centric workflows and derive greater value from faxed documents by automatically extracting and processing relevant information.

Enhanced mobile capabilities

As remote work becomes more prevalent, digital fax solutions will continue to enhance their mobile capabilities, enabling secure faxing from anywhere. These enhancements will include improved mobile applications, better integration with mobile productivity tools, and user interfaces optimized for mobile devices.

Deeper integration with cloud ecosystems

Digital fax solutions will become more tightly integrated with cloud-based productivity suites, collaboration platforms, and business applications. This integration will enable seamless faxing within the applications users work with daily, further reducing friction and improving productivity.

Digital fax powers productivity

Electronic and digital fax represents a critical evolution of a traditional communication method that continues to play an essential role in secure information exchange. By transitioning from analog to electronic fax, organizations can enhance security, improve compliance, reduce costs, and increase operational efficiency while maintaining the inherent security benefits that have made fax the preferred communication method in regulated industries.

As organizations continue their digital transformation journeys, implementing a robust digital fax solution should be considered an important component of their overall strategy for secure information exchange. With the right solution and implementation approach, digital fax can serve as a bridge between traditional document workflows and modern digital processes, enabling organizations to move forward without compromising security or compliance.