A virtual data room is a special secure working environment that helps different team members to store data, ensure the transfer of information, create a secured workspace, and so on. Virtual data rooms are widely used in various areas of activity and businesses. This software is especially popular in large companies where it is necessary to comply with high confidentiality standards, protect private and corporate data, etc. In addition, VDRs speed up and optimize the workflow and reduce company costs for stationery, courier services, and more.
Nowadays, there are a lot of VDR providers on the market, and sometimes, it may be confusing to pick the right one. On https://data-room.ca/due-diligence-data-rooms/, you can get insight into the most widely-used and efficient VDR software and how to use them when closing deals.
Benefits of Using VDR
Currently, a lot of companies from various businesses use electronic data room software. Below, you can see key reasons for that.
Data Protection
It is not a secret that hacker attacks may cause significant financial losses. Nowadays, along with the changes in hacking attacks, the VDR software developers try to improve their defense systems.
The previously popular storage methods (FTP and cloud storage) and data transfers (for example, via email) have been replaced by more secure options. VDR software implements multi-level protection, advanced encryption systems (128 or 256 bits), SSL protocols, intrusion detectors, web application firewalls, and more. All of this helps to prevent the leakage of private information and direct financial losses of the company and its partners.
Exclusion of Human Error
According to statistics, more than half of the violations in the exchange of information are caused by the human factor. In large corporations, this leads to multimillion-dollar losses and a slowdown in business development. In this case, the usage of online data rooms can be a solution to this problem. The VDR administration can adjust access levels by role. For example, one employee of a company may have access to read and edit a document, while another may only read files.
At any time, administrators can quickly change and reformat usability profiles, which gives greater freedom of action.
Speed up Workflows
This benefit is especially important in M&A processes. In this case, the transaction cannot be successful without due diligence. VDR technology helps to do this with the help of collaboration tools, the ability to integrate with other applications, and the unification of all participants in one environment. Thanks to the possibility of version control, all team members have an insight into each step of the project life cycle.
You can also discuss the details of the work due to the built-in communication channels, options for voting, polling, and more.
Key Features of VDR
Currently, you can find a bunch of various online data room software providers with their own individual products. They may differ in the set of tools, their implementation, and so on. However, there is a list of must-have tools and features every VDR comes with.
Watermarks
With the help of this feature, you can specify the person who uploads the file, assign authorship, mark the date of upload, and so on. This helps protect information from unauthorized use.
Access Restrictions
The datarooms administration can assign access levels according to roles. As a result, the team may contain members who are able to fully or partially edit the document, only read it or download it, and more. At the same time, you can change access levels in a few clicks.
Advanced Data Encryption
Speaking about security, for all up-to-date VDR technologies, 128-bit encryption is a must-have option. At the same time, many providers are switching to 256-bit keys. This directly prevents hacking and information theft.
Scanning Files
Working with the data room implies the downloading of large volumes of information. At the same time, the content can be very diverse: text files, audio content, video, and so on. It is not uncommon when malicious files come across among the data array that can disrupt the stable operation of the software. To prevent this situation, VDRs have tools for scanning infected and defective files.
Data Backup
All modern software that helps to work with large volumes of information allows you to create backups, and VDR is no exception. This helps to achieve a greater level of security and data integrity in an unforeseen situation. This feature may differ for different providers that can offer data storage both in the cloud and on a secure server.
High Level of Accessibility
Most up-to-date virtual data room platforms are web-based or have an app. As a result, all team members can get access to all resources, take part in discussions, create comments, and upload and edit documents on the go.
What are the Purposes of Using VDR?
Data room technologies are widely used in various businesses. Below, you can learn more on this topic.
- Mergers and acquisitions. This is perhaps the most popular area where VDR technologies are used. In particular, Virtual Data Rooms help to conduct Virtual Deal Rooms are often used during the M&A due diligence phase as a place to store and share thousands of documents with various teams such as potential buyers and sellers.
- Communication with the board of directors. Teams can securely communicate in virtual data rooms on various aspects of the deal life cycle. Teams can also invite third parties to chat in the room.
- Companies may share confidential information with potential investors when raising funds. In this case, potential investors may access the files, ask questions, and upload their data.
- Strategic partnership. With the help of an electronic data room, potential partners can share the necessary files in a secure environment, communicate using built-in messengers, and conduct polls and votes.