Data rooms are necessary for enterprises to store large volumes of documents and sensitive information. In years past, it was commonplace for sensitive documents to be stored in physical data rooms, which were filled with locked file cabinets containing the physical documents. When the digital age began to alter business processes in nearly every way, enterprises switched to data warehouses. These were still physical data rooms, but they contained servers that could store much larger volumes of confidential data and intellectual property.
These days, with big data management and digital transformations changing the ways that enterprises do business yet again, it’s becoming more common for businesses to store and review confidential information and important documents in virtual data rooms (VDRs). These virtual spaces store digital documents for review, and they limit access to authorized users, typically through the use of digital rights management (DRM) solutions. This lets users securely access confidential documents from any location with just an internet connection.
VDRs can be used for a variety of purposes, but one of the most common reasons large businesses use them is mergers and acquisitions (M&A). While it may be theoretically easy for two business leaders to agree to the concept of such a deal, there are many confidential documents like financial reports and legal forms that need to be examined by third-party professionals. Here are some of the advantages you’ll have when using a secure virtual data room for such tasks.
You’ll be able to keep your most important information safe.
Naturally, the greatest advantage of a virtual data room solution is that it’s able to protect your secure documents and information better than any other solution. When you’re performing the due diligence process during an M&A or other important business deal, you can’t rely on traditional file-sharing options like Google Drive or Dropbox.
You won’t know what users are doing with any of the information you upload to cloud storage, and you also don’t know what kind of security features a third party has when they’re dealing with your information. When you limit uploading your documents to a secure VDR (also known as a deal room), you’re in full control of security during due diligence.
You’ll have complete access control over files.
Thanks to built-in DRM to protect your files, you’ll be able to use a simple menu to control access to all documents you upload, whether it’s for an M&A transaction, initial public offering (IPO), or even a fundraising effort. You’ll be able to set whether a file can be downloaded, shared, or edited, and you’ll always have control over which users are authorized to view each file. For example, you can limit any documents regarding legal compliance to only be accessible by attorneys in the group.
The best virtual data room providers give you the freedom to easily rescind access to files whenever the need arises as well. Naturally, at the end of a business deal, you won’t want any third-party group members holding onto your most sensitive data. You’ll be able to deny access to any documents you uploaded, even if a user has downloaded them to their own devices.
You can track activity and add features.
In addition to access control and security, the best virtual data room solution will even let you keep track of document activity, such as who has accessed or downloaded files. This makes it easier to estimate the pace of project completions, and in the case of business deals, it makes it easier to see which users are really interested.
The best VDR providers also empower you with custom integrations into your existing systems, and you can even add your own security features, like two-factor authentication. With a secure VDR, all professionals on your team can have peace of mind knowing that information is secure and that deals can progress as smoothly as possible.