Information security in the realities of 2022 is at the peak of relevance. Interest in solutions for secure work with data against the backdrop of endless attacks and leaks is constantly growing. Сompanies are increasingly turning to virtual data rooms as a means for secure workflow.
We have already discussed data room software in our previous articles, but we offer to refresh our memory, as some of our dear readers may not yet be familiar with this technology. And for those of you who have already become an expert in this field, we offer a detailed look at the areas of the practical application of online data room software.
In this article, we will examine how an electronic data room can be utilized through the prism of five common use cases. Peeking ahead, we will give an example of this technology’s simple but often encountered application. A VDR can prevent data leakage regarding your website / online store – text and visual content, passwords for access to the admin panel, or the personal account of your web hosting provider, say vdrsolutions.org.
What is Virtual Data Room Software?
A VDR can replace a full-fledged archive; in this case, documents are stored in an electronic format. At the same time, access rights are strictly demarcated, and a document that several employees are working on concurrently can’t be viewed by those not granted permission. Such software can replace a classic meeting in a conference room, where old-fashioned edits are made to a printed version of a document using a red pen. There is no risk that this document will be left unprotected lying on the office table.
Working in a data room is relatively straightforward: you need to upload documents and set up access to them. When exchanging with external and internal counterparties, marked personal copies of documents will be generated for each interaction. If a leak occurs, using the expertise module built into the VDR, it will be possible to determine the source even from a photo or screenshot of a fragment due to invisible markings. Developers recommend using VDR for critical business events.
Total control is the most important advantage of implementing a virtual data room into your business practices. Neither FTP nor public storage can provide you with such an option. Using DRM protection technology, you have the power to revoke the right to access a document even after it is already outside the corporate network.
Using Data Rooms for Merger and Acquisition Dealings
Middle and large-sized business entities (companies, corporations, enterprises) and even NPOs understood the importance of utilizing data room software for M&As over a decade ago. The primary purpose of implementing this technology in M&A dealings was to facilitate and curtail the due diligence procedure. Virtual data rooms are identically helpful for the sellers and buyers involved in M&As. Namely, the buyers obtain access to the target company’s centralized data repository. Apart from that, they are able to access it from a distance, making it possible for the project teams to perform due diligence at their speed and comfort.
Sellers, meanwhile, have better management capabilities over their vital or confidential business documents. They have the power to regulate the extent of the buyers’ access and decide on which documents are subject to protection from unsanctioned use. Moreover, the sellers can create numerous data rooms for various buyers to acquire the most lucrative quote.
Using Data Rooms to Fundraise
Businesses often employ fundraisers to attract capital in their name. Fundraisers utilize virtual data rooms to communicate with potential clients, investors, and legal or financial consultants. Using VDRs, fundraisers are able to grant investors day-and-night access to business documents, answer their questions through Q&A modules, deliver presentations, and organize meetings with the parties involved. The coolest part is the administration can observe all actions in the data room.
Using Data Rooms for Legal Document Management Purposes
Entities involved in the legal industry are one of the largest customers of virtual data rooms. Legal advisors and attorneys have access to their client’s personal data and confidential information and are obliged by law to secure data integrity. Thus, law firms resort to electronic data rooms as their central online storage facilities. Virtual data rooms integrate the most progressive safety features known in the digital world, and this helps attorneys maintain that data is inaccessible to unauthorized individuals. In addition, VDRs allow law firms to communicate with the parties involved securely. Virtual data room providers such as iDeals include useful bankruptcy case management tools and extensive legal forms libraries.
Using Data Rooms During Initial Public Offering (IPO)
A public company is legally obliged to make the necessary corporate documents open to the persons concerned. That’s because investors and shareholders have the right to analyze the organization’s previous performance, present situation, and prospects. Giving access to confidential data to individuals not directly involved is risky as competitors can use the information for their benefit. VDRs allow companies to accomplish IPOs in a much more secure mode. They can require investors to sign NDAs or prevent data room users from duplicating or downloading documents. A data room user attempting to steal or misuse a document can be instantly identified and sued in a court of law.
Data Rooms and Real Estate
Firms in the real estate business operate data room software as their primary data storage unit to manage their legal documents, portfolios, architectural plans, clients’ details, and other confidential materials. Data rooms can also be used to communicate online and share data while conducting real estate dealings. Companies in this sphere use integrated HD video conference tools for secure online visual tours of properties. Another application is electronically signing purchase and sale documents within the data room.
Summing it up
Virtual data room software is definitely a helpful tool when dealing with sensitive information and can be applied in many types of business activities. We advise you to pay particular attention to this technology and consider its implementation in your business practices if:
- You exchange with contractors or customers any documents that have commercial value.
- You want to have control over a document even after it has already been sent and downloaded by a third party.
- There is a constant flow of employees in your firm, so you want to keep data discrete even from your colleagues/staff.
We advise you to compare virtual data rooms to determine the most suitable provider. For this purpose, you can refer to the data room comparison we previously compiled. And remember that the best data room services always put the security of your information and that of your counterparties in the foreground.