The contemporary world is actively and deliberately shifting to a virtual space, making everyday life and business processes more manageable. For example, now, companies need to store numerous confidential documents in one place. Therefore, virtual data room software, or VDR, is being used.
You may also have heard other names like online data room, digital data room, and electronic data room. They all mean secure online space for storing, sharing, and distributing sensitive documents. Businesses use this software to facilitate processes for handling information related to customers, partners, investors, and company management.
From the feel of the term, you might think it’s something new associated with cloud file-sharing. And while that may be true, the term data room is much older than cloud storage.
Compared to cloud file-sharing sites such as Dropbox, VDR platforms include powerful features that make it easier for people to work on an agreement or project.
What is Data Room Software Used for?
Some of the most popular uses of data room online include:
- Corporate document storage;
- Board Communication;
- Secure document sharing;
- Mergers or acquisitions;
- Initial public offering;
- Strategic partnerships;
- Venture capital appreciation;
- Intellectual Property Management;
- Main functions of data room software.
Instant Information Exchange and Communication at a Distance
Data room software provides document storage with simultaneous access for a certain number of people. For example, two businesses go through a merger or work on a typical project requiring secure access to shared data.
Reducing the Time and Cost of Transaction/Project Management
M&A transactions can be done much more efficiently and from almost anywhere. Or for example, changes made by an engineer to construction drawings are immediately available to all participating contractors.
Increased Efficiency of Team Members/Partners
An internal Q&A system (essentially an instant messaging service) saves all communications. They are recorded, encrypted, and stored in one place. After a project/completion, it is possible to prepare an archive from your data room.
Advantages of Using a Virtual Data Room
Among the key benefits of using VDR software for your business are:
Secure Data Exchange
Businesses primarily use data rooms for due diligence. They have no risk of loss when documents are exchanged or accidentally destroyed. VDRs are especially valuable for facilitating critical financial transactions such as mergers and acquisitions, fundraisers, and IPOs.
Project Management Tracking
A secure data room can be cost-effective in reducing unavoidable human error. Account administrators can control and regulate who has access to which files, and the administrator always have control over the data.
For example, you can disable copying, printing, and forwarding, which eliminates the possibility of data transfer to unauthorized parties. They also can track edits and requests for individual documents.
Document Organization & Distribution
Files can be downloaded simply by dragging and dropping them into data rooms. There is no limit to the size, quantity, or format of the downloaded files. Files are converted to a secure PDF format, and users can view them in any Internet browser. Quick searches are available with tags or by keywords. Room structure can be customized.
Using Excel with more than 5,000 results, you may know what I mean. Working with a spreadsheet of even moderate size can cause your computer to crash. Virtual data rooms provide seamless access to data, no matter how much data is stored.
Quality Planning & Usability
With a user-friendly system, virtual data rooms allow scheduling so that all participants are notified. Log in so that a person can synchronize information from a computer and a phone or tablet.
Areas of Use
The secure and efficient storage and exchange of documents between employees of a company or employees of several companies make VDRs applicable to a number of industries and situations. Here are the most common ones:
- Corporate Culture;
- Venture capital;
- Real Estate;
- Investment banking;
- Business brokers, etc.
How to Choose Data Room Software Providers
The virtual room environment is very competitive and is developing rapidly. It allows the user to choose the system that meets their needs. The main competitors in the global market are:
- iDeals Virtual Data Room.
- Citrix ShareFile
- Merrill DataSite
- Box Virtual Data Room
- Intralinks Dealspace
- Brainloop Secure Dataroom
So, before choosing a VDR, make sure to do the following:
1. Identify Your Needs
The main focus should be on the security of the environment and intelligent retrieval of uploaded documents. That is, it’s not just essential to upload documents, but it’s also to help find the documents the user needs. Keep in mind the needs of your business and scope.
2. Identify Main Characteristics
A virtual data room is a complete business solution that provides scalability and security for operations. Therefore, choosing data room providers should be taken seriously. Before buying, compare different data rooms to see which features are in the package and not.
3. Compare Different Data Rooms
Read the reviews and pay special attention to what reviewers say about features that meet your specific needs. In addition, there are helpful comparison tables to help you to choose on the Internet.
4. Try a Data Room Provider You Like With a Free Trial
You can check out specific feature sets, pricing, security implementation, and usability during a free trial, which most of the suppliers offer.
The protection and exchange of documents have become the new norm. And its popularity will only grow over the next few years. Therefore, to expand your business, increase collaboration, increase efficiency, and possibly reduce the number of unnecessary tasks, this VDR selection process should be at the top of your to-do list.