Benefits of Virtual Data Rooms for Businesses and Individuals
Updated on August 31, 2022 | by Louise Simon
Nowadays almost all companies – small, medium, and large – are moving to modern technology like electronic data rooms. They are doing so for many reasons, which will be discussed below. If it is not enough, you can always review other articles to find more info.
What is the Reason for the VDR’s Popularity?
The reason is really simple. The best virtual data room providers make all work automated. Documents are in a secure repository that only authorized people can have access to.
There was a time when data rooms were physical, with folders on special racks. When there were any corporate changes, all these documents were manually searched, sorted, and given a check. Verification has been also the most complicated process that we have even now. A huge number of people were assembled to take apart each document, get an agreement, make a signature, and put it aside for a long time. Try doing that with a few hundred documents, and you’ll realize that it’s a too long-term process that can take weeks and months.
How does a virtual data room help? It optimizes the work with documents and keeps them in a secure place where every activity of employees is thoroughly monitored. That is, no one can make edits if it is forbidden, or view a document if he does not have enough rights to do so. Moreover, now there is no need to collect documents manually: they are all sorted by algorithms with the help of artificial intelligence. If you suddenly lose a document, you can always use the smart search engine by text or title.
What Functions Does the VDR Store?
The functions of the various virtual data room providers are really enormous. There are a number of basic functions that every electronic data room should have. For example:
- Control functions. Various user and document security features, permissions, and restrictions on viewing or editing files are available. Data room services allow you to control employees and those who have access. Does someone accidentally delete a document? That won’t happen if you have properly assigned rights and responsibilities within your VDR. Did someone edit the text of an important document or contract? That won’t happen either if you have a VDR. At least you will know who did it. And you can add dynamic watermarks to documents and other files, so you know exactly where the data was leaked from.
- High level of security. Every online data room software must have an enormous level of security, which is confirmed by various certificates and the level of open encryption itself. Only in this way your documentation and sensitive data can be saved from data leakage. The good news is that no one will be able to “sneak” into this storage and steal any information, because it is all in the cloud and well-protected.
- The ease of use. You need to make sure that each of your employees will use this application as easily and efficiently as possible. To do this, providers usually offer some training programs. This is a really important thing to consider when choosing among data room vendors. Most of them have 24/7 technical support, but some don’t. Make sure that the provider you choose has it, otherwise, things might not go according to plan.
You have to constantly compare virtual data rooms to find the feature set that suits you best right here and now. It doesn’t matter if you’re taking a subscription a couple of times or if you plan to use this software on a permanent basis.
What Industries Use VDRs?
Data room software is used both permanently and during certain events. Large and medium-sized corporations implement it on a regular basis, and smaller companies tend to use it more for important events like audits or M&A. A few such possibilities:
- Due Diligence. Generally, there are a lot of documents that are disclosed when going through a process like M&A. In addition, there is the complexity of their verification by a huge number of people. All of this is simplified with the help of data room software.
- Various audits and regular reports. They are complicated and time-consuming. But what if all the documents are in one place and easy to get to, and each of the users has their own permission to change and view these documents? That’s what virtual data rooms regulate.
- General design work. There are also a lot of documents and team members involved in this type of activity. Perhaps even participants who are in different companies. This can be put in the general category of “collaboration”. Everything becomes a lot easier when you have an electronic data room and all the sensitive documentation is easily accessible and highly protected at the same time.