Did you know that on average, an employee spends $725 on paper and printing expenses per year, and almost one-fifth of those documents are never used? Imagine the average total expenditures if a company has 100 employees? It is roughly more than $70,000 annually, a massive amount for any business. However, thanks to virtual data rooms, businesses can now minimize these expenses.
Online data room software has proved to be the game changer in document management systems. It has not only made data management easier and safer but also helped businesses reduce their administrative expenses to a great extent. In fact, modern-day data room solutions have streamlined project management and deal-making.
If you are new to this high-end technology, here is a detailed guide about virtual data rooms and how to use them with great effect.
What is a virtual data room?
Dataroom software is a highly secure, online data storage and sharing platform where users can store, share, or exchange regularly used or confidential business documents. However, today’s virtual data room software is a highly advanced business solution that has offered so much to businesses.
Online data rooms are richly equipped with the latest communication tools that businesses can use for remote communication. These tools include data room messengers, Q&A modules, polls, public posts, audio/video calling tools, and email.
Apart from that, data room users can view, edit, alter, and annotate documents in the data room without using an external app. They can share documents and revoke document access anytime. Virtual data rooms allow bulk document upload and file sharing, a feature not available in traditional data sharing platforms.
To learn more about virtual data rooms, head over to https://vdrsolutions.org/.
Why are virtual data rooms different?
What makes data room software different from free data sharing tools? For starters, free data sharing tools do not allow you to share hundreds of files simultaneously, but a VDR does. Second, once you share a file via email, you have no control over it but using a data room, you can delete documents or revoke access anytime.
Platform security is one of the biggest differences between VDRs and other tools. Any high-quality virtual data room is hosted by a certified service provider that fulfills all regulatory requirements and is certified by global bodies. Also, data rooms do not share your data with third-party apps unless you agree to it. Most importantly, data rooms employ the strongest data encryption methods available.
How do businesses use virtual data rooms?
Data room software is a multi-purpose business software used in different manners; here are some of them.
- Portfolio management. Real estate companies, private equity firms, investment bankers, and other financial institutions use data room services for strategy development, portfolio management, and opportunity hunting.
- Fundraising. Fundraisers commonly use data rooms for temporary data management, negotiations, and communication with potential investors and marketing firms.
- Restructuring. Corporate restructuring includes any significant changes in an organizational structure. It can be capital reallocation or modifications in operation policies. VDRs are used to centrally communicate and share confidential data with advisors and other concerned parties.
- Bankruptcy case management. Bankruptcy cases are not only stressful, but they are complex as well. Virtual data rooms like iDeals have all the tools required for bankruptcy cases that can be used for bid management, data management, and other processes.
- Online collaboration. Data rooms are one of the safest and most used solutions for online collaboration in strategic partnerships, joint ventures, and day-to-day business communications.
- Mergers & Acquisitions. Financial institutions have been using virtual data rooms for M&As for over a decade now, and M&As are still the biggest use case of VDRs.
- Initial public offerings. IPOs or initial public offerings are also managed through data room software. Companies use VDRs for data management and communication with potential investors and project managers.
- Due diligence. Due diligence involves the management and analysis of massive volumes of business and financial data. Data room software helps in protecting corporate secrets and ensures maximum collaboration with interested parties.
Who uses virtual data rooms?
Online data room software is common in almost every business sector. Here are some top users of VDRs:
- Financial institutions
- Oil & Energy sector
- Investment banks
- Private equity firms
- Real estate sector
- Pharmaceutical companies
- Insurance companies
- Healthcare industry
- Law firms
What are the top benefits of online data room software?
It is hard to summarize all minor and major benefits of data rooms but here are some mentionable ones.
1. Secure and centralized data storage
Online data room software stores your business data in a centralized place. You can keep your financial statements, tax records, contracts, agreements, legal records, etc., on a single platform.
Data room software protects your confidential documents through different security features. Notable security features include two-step verification, document access control, file access revoke, remote device purging, digital watermarking, fence view mode, audit logs, time-based data room access, etc.
2. Remote data access
Whether you are on a family trip, having a gym session, or traveling, virtual data rooms are accessible from anywhere, anytime. All you need is a smartphone and an internet connection to use your data rooms. Some data room vendors give offline access to VDR documents.
3. Brand building
Unlike free data storage platforms like Dropbox or Google Drive, you can create a dedicated website for your virtual data room. You can also use your business name, logo, and a color theme for your website, helping you create more awareness about your brand.
Virtual data rooms record all the activities undertaken in them. The administration can generate audit logs to see who is doing what and when. 24/7 monitoring brings a sense of accountability to data room users, making the operations more transparent.
Summing it up
Virtual data rooms are online, cloud-based data management platforms that allow businesses and corporations to store, share, and manage their business documents.
Data room software is globally used for IPOs, fundraising, clinical trials, M&As, portfolio management, board communications, and real estate transactions. They are secure, easy to use, cost-effective, and remotely accessible business solutions.
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