Every business needs a way to safely and securely store confidential information and sensitive documents. In years past, this was done with physical data rooms, which were filled with file cabinets containing folders of valuable data and forms. Such documents may include financial reports, legal forms, customer data, or even patient medical information safeguarded by HIPAA.
When the digital age started altering business processes and the ways that information was stored, large organizations started turning toward data warehouses. These were still physical rooms, but they housed servers filled with digital copies of important documents rather than physical copies.
Today, it’s becoming more common for enterprises to gravitate toward virtual data rooms (VDRs), also known as deal rooms, to securely store and share documents. This is most commonly done during due diligence for mergers and acquisitions (M&A) and other large business dealings. While it’s theoretically simple for two business leaders to agree to a major deal, the due diligence process is necessary for lawyers, accountants, investment bankers, and other professionals to review confidential documents to ensure the deal is in everyone’s best interests.
A reliable virtual data room can secure your data better than other solutions and speed up your workflow for enterprise-level deals. Here are just five ways a VDR is a game-changer.
1. Built-in DRM means that your documents are truly secure.
Traditional file-sharing options like Dropbox or Google Drive might be fine for the average user, but you can’t afford to trust such solutions for enterprise file sharing. Traditional options simply aren’t secure enough, and they give you no way of knowing what’s being done with your important files once they’re accessed. Plus, you’ll be gambling on the security of every user who downloads your files.
The best virtual deal rooms have built-in digital rights management (DRM), which safeguards your files better than other options. It protects intellectual property and documents via encryption, and only users with the decryption keys can access the files.
2. You maintain total access control over your files.
With the best virtual data room solution, you’ll be able to easily set parameters for which users can view, download, share, or edit your files. You’ll simply upload them to your dashboard, and choose which third parties can access them from a checklist. This helps you ensure that files like financial reports are only accessible by accountants and legal forms are only accessible by the appropriate attorneys.
3. You can rescind access at any time.
In addition to controlling who access your files in the first place, you can also remove their access at any time for any reason. The most common reason to do this would be because the virtual data room has simply served its purpose, but you may also choose to rescind access if you suspect unwanted activity. Once access is rescinded, it denies access even to users who have downloaded the files. This way, no one but you is able to keep your important documents.
4. You’ll have comprehensive activity tracking.
With the best online data room, you’ll even be able to track exactly when each user accesses your files and what they do with them. This is great for determining who is really interested in a business deal and who isn’t. You can also see if a group member seems to be struggling with their documents and direct them to the segments that need the most attention. Naturally, if you see that a user has access to documents that they shouldn’t, you can immediately rescind their access.
5. You never have to rely on outside plugins.
Since documents can all be viewed in your VDR dashboard, group members never have to worry about installing plugins to view confidential data. This protects you from any possible data breaches that outside plugins could cause, and it helps speed up the due diligence process. Speaking of security, you can even set up your own additional security methods, like multi-factor authentication, if you deem it appropriate.
With the right data room provider, you can rest easy knowing that your most important data is protected in a controlled environment, and only those who need to access it will be able to.