Virtual data rooms (VDRs) are securely cloud-hosted virtual rooms where businesses can store and share important files. But how exactly do these structures work in the context of company operations? And what are the best ways to manage a VDR?
Virtual data rooms are a platform designed to make it easier, more intuitive, and more secure to share confidential materials internally, with partners, and with third parties. Employees, vendors, contract holders, auditors, and advisors can all be granted access to this type of “room,” while it’s practically impossible for any unauthorized user to gain access.
The owners of these rooms have full control over which files are uploaded, who can view those documents, and whether those documents can be downloaded, copied, or printed. Owners will also have the ability to restrict accessibility in a variety of ways, and can even use tracking and reporting to better understand how the VDR is being used.
Why Should You Use a VDR?
Why should you be using one of these rooms?
· Secure storage. The most common motivation for using a VDR is security. If you’re exchanging confidential information or if you’re managing sensitive contracts, security is your highest priority. A data breach here could cause you massive financial losses and jeopardize your reputation as a business. With robust security measures in place and accessibility restrictions, you can share information without having to worry about whether it’s going to be stolen.
· Convenient sharing. That said, VDRs tender offer streamlined ways to conveniently share information. Instead of having to jump through hoops to view a certain contract or a recently uploaded file, you can quickly and easily provide information to the people who need the most.
· Cost savings. Compared to other such solutions, a VDR is relatively cost efficient. You won’t have to pay much money to capitalize on all of the benefits and you can prevent significant losses due to security breaches.
· Productivity and efficiency. Overall, a VDR can help your organization work more productively and efficiently. You can share files without any obstacles or headaches and close deals faster, which is especially valuable in a time sensitive environment.
Common Applications for VDRs
A VDR can be used for almost any application, and businesses of all types are increasingly relying on them for file sharing and other purposes. However, these remain some of the most common applications for VDRs:
· Mergers and acquisitions. Mergers and acquisitions tend to be complex and highly valuable financial deals that require interactions between many different parties. This makes them a perfect fit for a VDR.
· IPOs and fundraising. Similarly, initial public offerings (IPOs) tend to be very complex, with lots of paperwork to manage. IPOs and fundraising deals also benefit from VDRs.
· Major contracts and partnerships. Any kind of major contract or partnership can be navigated and negotiated through a VDR.
· IP management. Intellectual property (IP) management similarly benefits from the use of a VDR, accessible to all relevant parties.
How to Choose the Best VDR
There are many VDR providers on the market, so how can you choose the best solution for your needs?
· Evaluate your needs. First, figure out what your needs are. Do you need a solution that’s hosted in the cloud? Do you want something that provides many different tiers of accessibility privileges? Do you need something that’s intuitive and easy to use because you’re going to be training a lot of third parties on how to use it?
· Set your priorities. Most businesses are looking for a platform that is secure, inexpensive, and highly usable. But it can be hard to achieve all at once. Before shopping for the best solution, make sure to establish your priorities. Is it more important to have a solution that’s in your budget? Or are you willing to extend that budget to make sure you have the most secure platform possible?
· Compare multiple providers. Don’t just settle for the first VDR provider that you come across; compare the offers of multiple providers. You’ll find a wide range of different product and service offerings, only some of which will meet all your needs.
· Take advantage of test runs. Most companies are willing to offer free trials and demonstrations so that you can get a better feel for how their product works. Make sure to take advantage of these. They’re by far the best way to get a sense of whether this product will work for you.
If you’re about to navigate a complex financial deal, or you just want some extra security and reliability when sharing documents, consider integrating a VDR. As our technology grows more sophisticated and businesses develop better data governance habits, VDRs will become even more powerful and even more important in the business world.