Companies use data rooms to store sensitive documents and important information like financial reports, customer data, legal forms, and much more. Not so long ago, these were physical rooms filled with file cabinets. As business leaders grew more used to the digital age, these physical data rooms were replaced by data centers and data warehouses where these files were stored digitally. These solutions require server upkeep, which can often be costly, however. These days, it’s becoming more common for large organizations to rely on an enterprise virtual data room.
Virtual data rooms (VDRs) are virtual spaces for business transactions that store important information and distribute access only to authorized users within the system. The virtual data room market is largely for enterprise organizations that go through complicated processes like mergers and acquisitions (M&A). While it might be easy, in theory, for two CEOs to agree to the basic terms of a merger or acquisition, the reality is never that simple.
There’s a lengthy due diligence process in which professionals of all kinds must review important documents to make sure the deal is what it seems to be. For example, accountants and financial advisors will need to look over company financial reports, and attorneys will need to conduct contract reviews. In addition to mergers and acquisitions, due diligence may also be conducted during fundraising, audits, or any other processes that require complex paperwork. Here are just a few reasons why a virtual data room is the best option for your company.
They offer unmatched security.
Traditional cloud storage options like Dropbox and Google Drive may work for the average person or share documents that aren’t of a sensitive nature, but you need a secure enterprise solution when you’re dealing with other companies and your most confidential documents. If you were to share these over traditional cloud services, you’d be taking a risk on the other company’s security, their access control, and whether they’re prepared to handle cyber threats.
When you’re using your own VDR for a complex business function, the only security you have to worry about is your own. Virtual data rooms are protected using digital rights management (DRM) software, which is the same software that intellectual property owners (IPOs) use to protect their property and keep it from being accessed or shared without permission.
You’ll have full access control over who is able to view or download your documents, what devices they can be downloaded or viewed on, and how the documents can be edited or shared. You’ll even be able to implement your own additional security measures, such as multi-factor authentication if you want additional security.
You can track how each document is used.
In addition to unrivaled security, the best enterprise VDR solutions also let you track each document, so you can see which group members have viewed, downloaded, or edited each one. This is great for making doubly sure that only the appropriate people have access to their respective documents, and it can help you estimate the pace for a difficult project. If you see that a document hasn’t been viewed by everyone who needs to see it yet, you can send friendly reminders to check them.
You’ll also be able to judge how quickly each group member is getting through their documents. Enterprise legal forms can often be hundreds, if not thousands, of pages long, so document tracking can be a great help for directing team members to the most important sections of each document.
You can remove access as soon as you’re ready.
Naturally, it would be a huge security risk if people from outside your organization could still access sensitive documents after the deal is complete, which is why the best virtual data room solution will let you change user access permissions on the fly. As soon as a deal is completed, you can rescind access for anyone outside of your enterprise. Even if the user in question has downloaded the document, they’ll no longer be able to access it on any of their devices.
A virtual data room is simply the best modern solution for any enterprise that needs to share individual files or provide group access to confidential documents at any time. VDRs are as secure as you need them to be, and they offer unmatched convenience for getting large projects done quickly.