Technology has been breaking its own records with every passing year, and businesses are keener to adopt the latest technologies.
Whether it is process automation, data management, or human resource management, business solutions have become an integral element in organizational success. Virtual data rooms are one of those business solutions that caught the attention of businesses from all industries.
That’s because virtual data room software is not limited to a specific industry or process. Also, virtual data rooms are not developed for a single purpose; they are used for different reasons and in different ways.
Although online data room software has dominated almost every business sector, especially financial institutions, there is still a long way to go because many still don’t know about VDR technology or are hesitant to use it.
If you are also caught on whether to use data room software or not, then this guide can be of great help.
What Is A Virtual Data Room?
Before jumping to why you need an electronic data room, it is important to know what exactly it is. That’s because a lot of people still consider it as a simple data repository which is a half-truth. Here is a complete definition of virtual data room software.
A virtual data room is essentially a digital documents repository that can be used for storing, sharing, or managing common or confidential business documents.
But, online data room software is also a virtual collaboration space that boasts almost all the latest communication tools for group conversations, business meetings, and individual communication.
One of the most important elements of virtual data rooms is their versatile project management features. It is an interesting fact that virtual data rooms were first used for mergers and acquisitions (which are very complex projects), and people still consider data rooms to be simple document storage places.
Due to those advanced project management features, data rooms are used in fundraising, real estate portfolio management, risk management, litigation, risk management, and capital raising.
So, in a nutshell, virtual data rooms are:
- Cloud-based online data repositories
- Online collaboration channels
- Virtual deal-making platforms
You can also visit https://dataroom-providers.org/securedocs/, a highly trustable resource for detailed data room vendor comparison and recommendations from industry experts.
What Can Virtual Data Rooms Do For Your Business?
Data room software is beneficial in many ways, but here are some most common ones.
1. Provides data security
The first and most important thing about virtual data rooms is that they are not ordinary solutions, just like the free ones on the internet.
That’s because VDRs are hosted by certified data room vendors who strictly comply with internal data security standards such as FINRA, SOC2, ISO 27081, and other cybersecurity protocols.
Online data room software uses various security layers at multiple stages of data management. Here are some notable examples.
- Two-factor authorization. It is a two-step login procedure that restricts hackers and unauthorized users from breaking in.
- Document permission settings. You can control who in your data room can access, edit, view, overwrite, alter, print, or download a document and who cannot.
- Digital watermarks. Files and documents can be digitally watermarked to avoid copyright issues and track changes made in the documents/
- Device purging. You (VDR administrator) can delete any device connected to your VDR and all the documents opened or downloaded from the software.
- Fence view mode. It is a feature that restricts any user from scanning specified documents or taking photographs or screenshots. You can use this feature for your highly sensitive documents.
2. Gives remote accessibility to business data
One of the biggest advantages of using virtual data rooms is complete and 24/7 access to your business documents. As mentioned earlier, online data room software is a cloud-based platform that you can access from your home, office, or from anywhere in the world.
You just need a device (such as a laptop, mobile phone, desktop, or tablet) and an internet connection. That’s not it; some of the best data rooms in the market are offering offline access to VDR files.
A large number of data room vendors, such as iDeals, Ansarada, Google Workspace, etc., also allow faster access through mobile or tablet apps. That means you can have your business data room at your fingertips.
Remote access is a super useful feature for investors, stakeholders, and directors as they can ensure their participation in their concerned affairs from anywhere.
3. Brings accountability and transparency
How hard is it to monitor your employees’ activities? How do you know who opened, copied, or edited any document?
Virtual data rooms make sure you can monitor and track each and everything in your data room — thanks to audit logs. Audit logs or audit trails give you detailed reports on each and every action performed by the users. You can track all the files, changes made in them, and details about who shared them with whom.
The sense of being tracked forces employees to avoid unauthorized activities, and the culprits can be held accountable. Most importantly, audit logs keep everything transparent, ultimately allowing you to gain the trust of investors and stakeholders.
It is the age of information, and businesses that don’t protect and manage their data often face downfalls. Adopting virtual data room technologies can help you automate your data management and sharing process, simplifies internal and external communication, and help you save hundreds and thousands of dollars spent on administrative expenses.
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