A virtual data room, or data room, is a cloud solution specifically designed to securely store and share confidential business information. Data rooms offer specific functions such as extended permissions, Q&A tool, notes and bookmarks as well as two-factor authentication and watermarks. Although virtual data rooms have traditionally been used for financial transactions, IPOs, and real estate lifecycle management, the use cases have expanded over the past decade. Data rooms are potentially of interest to any company concerned with the secure management of its documentation. Today, data room providers are increasingly building on machine learning technology, expanding their offerings with features such as automatic document translation, findings managers and automatic red flag analysis. To be included in the Virtual Computer Room category, a product must:
-
enable secure storage and distribution of content, data and documents in a controlled environment;
-
implement security measures such as encryption, two-factor authentication and controls for easy login;
-
offer customizable consent structures;
-
manage files remotely with digital rights management;
-
review, track and enforce document permissions;
-
data can be shared across multiple projects to ensure that there are no overlaps or interactions between individual projects.
What Should You Look Out for in the Data Room Software?
What you want in an electronic data room is entirely up to you. However, here’s what to look for in the data room.
The main purpose of the data room is to simplify things, not complicate them. Choose a user-friendly data room and your employees will find it easy to navigate.
Find a provider to help you set up the data room, or at least offer easy-to-understand instructions on how to set up and use the data room.
Audit logs or monitoring tools are a must for any data room. A virtual data room that doesn’t keep track of everything is simply useless.
Don’t compromise on the security of your data room. Dataroom software helps protect your business data by using certified data room services. Always look for certified providers that adhere to international data security standards.
The virtual data room is as good as its customer service. You may have difficulties working with the data room and only a reliable customer support team can help you.
Last but not least, always compare multiple data rooms based on their equipment, customer support, tariff plans and customer feedback.
What are the Benefits of Virtual Data Room Software?
VDRs provide a secure way to securely share data and other sensitive information, but these products also provide secondary operational benefits for other parts of the organization.
Building openness and trust: Building strong relationships with stakeholders is critical to successful business engagement, and this depends on openness, which helps build trust. In situations where transparency of highly confidential information is critical, VDRs provide a way to share information without the risk of data leakage.
Cost-Effective: Using VDR significantly reduces the need for physical documents, which in turn reduces the cost of printing, storing and retaining documents. The high cost that VDR reduces or often eliminates is travel for the sole purpose of reviewing corporate documents. VDR also has commissions, but they can be predictable and therefore manageable. All this reduction in paper records and travel also reduces the company’s carbon footprint, which is another benefit of VDR.
Increased productivity: VDR simplifies work processes. In addition, the VDR file management function makes searching and linking documents efficiently.
Global reach: As the number of business transactions with partners around the world increases, VDRs reduce geographic restrictions that previously made the process of cross-border negotiation and communication extremely time-consuming.
Conclusion
VDRs are an asset to your business, and careful research before investing in one can help you get the results you want. Choosing the right data room software depends on your needs, but make sure it’s easy to use and has reliable customer support. Alternatively, you can read our guide and find out if you are finding the right VDR software for your new business.