Managing confidential data is a must in the business world. Companies constantly need to store documents, share them with third parties, and communicate on a variety of questions related to those files. To accomplish those tasks, businesses use data room services. These are useful resources that protect you and your data.
Below in the article you’ll find what a virtual data room is, what its major benefits are, and how to choose among the best virtual data room providers.
What Is A Virtual Data Room?
A virtual data room (VDR) is an online environment that enables the secure storage and distribution of confidential business documents and files from one organization to multiple parties.
Virtual data rooms are normally used by corporations, lawyers, investors, and anyone from the deal-making community during:
- M&A transactions
- Due diligence
- Initial public offerings
In Comparison With Physical Data Rooms, VDRs Are:
- More accessible, as users can use them anytime and anywhere.
- More affordable, as users don’t spend resources on rent and maintenance.
- More secure, as data can’t be lost or damaged during transit or storage.
In Comparison With Free Cloud Storage, VDRs Are:
- More protected due to advanced security features and regulatory compliance
- More efficient due to advanced tools for document management, communication, user activity tracking, and customization
Thus, virtual data room providers offer a cost-effective solution that helps organizations streamline business processes, facilitate decision-making, and complete deals faster.
Top 4 Benefits Of Using Online Data Room Software
Let’s focus on data rooms’ advantages in more detail.
Only during the second quarter of 2022, internet users saw about 52 million data breaches. The consequences are usually far-reaching — from the theft of intellectual property and reputational damage to financial loss and huge fines.
Given that managing big amounts of confidential information is always a part of every business transaction, companies should make data security their top priority. Virtual data rooms appear to be the best tool for secure data storage and sharing. Here’s why:
- Document security features like dynamic watermarks, fence view, and redaction protect documents from unauthorized viewing and sharing.
- Access security features like two-factor authentication, granular user permissions, and expiration dates for file access ensure only authorized users can access a data room. These systems come with a reliable cybersecurity infrastructure.
- Security certifications like ISO27001, SOC 1, SOC 2, or GDPR ensure a data room provider meets all the requirements of secure data management.
Efficient Document Management
During business transactions and projects, companies face the need to continually upload, download, edit, and share a big number of files. An electronic data room is a solution that helps to do it quickly and efficiently.
The features that make document management easy and convenient are:
- Bulk upload that helps to upload big volumes of data simultaneously.
- Automatic index numbering that helps to automatically number files and folders for easier search and navigation.
- Any format support that allows uploading documents in any format without having to reformat them using additional tools.
Usually, business transactions involve many parties — buyers, purchasers, lawyers, investors, bankers, etc. All of these specialists require an effective tool for collaboration and communication.
Many virtual data room providers offer tools that parties can use to communicate on documents, discuss project-related questions, and make informed decisions. Among the best features are:
- Live chatting that allows project participants to send messages back and forth in real-time.
- FAQ section that contains answers to the most common questions about documents.
- Expert assigning that allows assigning questions and tasks to experts specializing in definite areas.
Traditionally, companies had to store confidential documents in physical data rooms. Team members had to travel to view the files they needed, which took lots of resources.
Data room vendors came up with a digital version of physical data rooms. Now, companies can store, share, and access data fast and effortlessly. This is possible due to:
- A mobile user interface which allows viewing the VDR contents through an interface optimized for all mobile devices.
- Mobile apps which give secure access on-the-go and have the same functionality as web VDR versions.
- Single sign-on (SSO) company single sign on implementations allows logging in with a single set of credentials to multiple projects.
- The plugin-free environment which allows viewing important documents in their native format without having to install any additional software.
How To Choose The Best Data Room Software
Here’s a short step-by-step guide on how to choose a data room provider most suitable for your business needs.
- Define your purpose. Establish a purpose your business needs a VDR for. Also, define how much storage volume a project requires, how many people will use a data room, and what features are required to run a project seamlessly.
- Read the reviews. Find out what other users think of particular data rooms. Give special attention to what they say about user-friendliness, value for money, security features, and customer support.
- Compare virtual data rooms. Choose 2-3 data rooms that suit your needs most and compare them to several criteria like reputation, experience, rating, price, and features.
- Book a demo. Select a VDR that corresponds to all requirements and contact a sales team to schedule a demo, so you can learn more about the software and ask any clarifying questions.
- Use a free trial. Request a free trial and test a data room’s features to make sure this option is what you really need.