Why do businesses make investments? Obviously, the objective is to automate processes or get some return on investment (ROI). Either way, investments seek any type of benefit in any form.
As virtual data rooms are revolutionizing data management and deal-making practices, many still ask why they should invest in virtual data room software? What can virtual data rooms do for their businesses?
The questions are absolutely valid because online data room software is not an expense – it is an investment that will have a considerable effect on operations of any business.
Today, we are going to answer two most important questions
1. What is a virtual data room?
2. Why is using a virtual data room for your business important?
What is a virtual data room?
To define a virtual data room comprehensively, let’s break its definition into subcategories as it will help you understand better:
- Virtual data rooms, aka electronic data rooms, are essentially cloud-based data repositories that you can use to store, share, and manage your business data.
- Virtual data room software are also secure virtual workspaces with advanced collaboration tools that allow business teams, officials, stakeholders, investors, and employees to collaborate.
- Lastly, online data rooms are a medium used by businesses to directly deal with their customers (mostly in B2B transactions).
Why is using a virtual data room for your business important?
Virtual data rooms serve different purposes for various organizations depending on their needs. Still, there are some common benefits of virtual data rooms regardless of the type of business.
1. Data protection: Safe data storage
Businesses are going paperless, even the small ones. Paperless solutions are all the rage in the business fraternity, and rightly so – they are more secure. Business data protection is the top priority of any business in the world right now, especially when every single business decision is made on the basis of information or processed data.
Virtual data rooms provide you with unbelievable levels of security to keep your business data safe from external or internal threats.
The two-step verification feature in virtual data rooms provides protection against authorized entrants. Apart from that, here are some other worth mentioning security features of virtual data rooms:
- Access restrictions. Data room management can customize access levels of different users according to their roles. Any user can be restricted from accessing a particular folder, document, or even a part of a document.
- “View only” mode. Activating the “view only” mode on any file prevents the users from editing, altering, downloading, or printing that document. Some virtual data rooms even prevent the users from taking screenshots.
- Digital watermarking. Digital watermarks help trace the original creator of any file – it prevents copyright issues.
What’s more, you don’t have to worry about storage space as a lot of virtual data room vendors allow you to upload unlimited data.
2. Secure data sharing and collaboration
As mentioned earlier, online data rooms software ensures safe inter-organization and intra-organization data sharing. The best part is that data sharing is secured through data encryption. That means only the intended recipient can decode the file sent.
Apart from data storage and sharing, data rooms are highly secure virtual workspaces with very handy collaboration tools. With data room software, business teams can do the following:
- Hold meetings through audio and video conferencing features
- Engage in group discussions
- Start one-to-one private conversations
- Work on shared documents
- Access business files in a matter of seconds
- Add or leave notes in a document
The management can also add stakeholders and investors to the data room to ensure maximum collaboration with them.
3. Remote access
Remote accessibility is surely one of the best things about cloud-based software. Although this feature is helpful for employees, remote teams, and senior management, stakeholders and investors find it handier than anyone else. That is because they can stay connected with the company 24/7. They can access company documents, add notes to them, participate in meetings, communicate with management or other stakeholders, and a lot more than that.
What’s more, top virtual data room providers like Merrill, DealRoom, SecureDocs, iDeals, etc., also allow users to access data rooms from their mobiles or tablets.
Remote accessibility is also advantageous when a business wants its financial records to be audited by external auditors. The company won’t have to pay for the traveling and residence expenses of the audit team. Auditors can access the data room from anywhere, and companies can customize their access according to their role.
Online data room software brings transparency to your business operations. Data room administration can monitor every single activity in the data room through audit logs. The management can keep a record of every file accessed, opened, edited, or downloaded.
Moreover, data room administration can track the IP address of the devices with which users log in. In short, audit logs allow the management to know who did what, when, and where. When every activity in VDR is monitored, transparency follows. This also helps win the trust of investors and stakeholders.
Interestingly, companies from all over the globe spend billions on paper and printing costs. Just imagine the paper cost of a 100-page document dispersed to 50 individuals.
Virtual data rooms help you avoid the paper cost. When you move your business data to virtual data rooms, you don’t have to spend your resources on those high-end printers as well.
Not to mention, VDRs improve collaboration, boost productivity, and save time, and it is impossible to measure these things in financial terms accurately.
Virtual data rooms have solved one of the biggest concerns of every organization – data security. They improve workforce collaboration and are remotely accessible. Also, virtual data rooms are easy to set up, easy to use, and bring transparency to your business operations. Lastly, they are highly cost-effective in different ways. Are you sure you still don’t want to try virtual data rooms?
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