A virtual data room (VDR) serves as a protected cloud-based space meticulously crafted for the secure management and sharing of confidential company documents. In this comprehensive guide, we’ll explore the reasons why businesses might consider partnering with data room vendors and the specific situations that warrant such collaboration. Let’s delve into these insights together.

Why use a data room?

In the last few years, the popularity of virtual data room software has increased considerably. Several reasons explain this trend.

Ease of use

It is important to opt for a reliable data room provider. You will then get all the advantageous functions and up-to-date solutions without specific training or instruction. Initiating work on a new virtual data room is a quick process, requiring no more than 15 minutes. Users can easily reach it from any computer, smartphone, or other devices. Additionally, inviting hundreds of other users to your data room is a swift task, taking just one minute.

Security

Virtual data rooms are tested, certified and totally secure. There is no reason to worry when uploading data to it as it is secured like physical data centers with the most innovative systems and technologies.

The price

This functional, modern and practical platform is also appreciated for its reasonable cost. High levels of security, optimal opportunities, technical support, simple access and a whole range of other features can be provided, all for a reasonable monthly cost. Keep in mind that the basic monthly plan includes only the essential features and security features. To benefit from more extensive options, you can select pro or business subscriptions, the cost of which will be adjusted individually.

For what activities and in which sectors can data rooms be used?

Any company, team, or person who wishes to apply a confidentiality to share and store their data will be able to benefit from the use of a data room. Most employees who collaborate on sensitive documents must know how to set up a data room that manages the security and easy access of all parties concerned. Here are the most common cases of VDR usage.

Data room M&A: the case of mergers and acquisitions

Merger and acquisition contracts can be simple and include only one seller and one buyer. But they can also concern much more complex transactions where dozens of stakeholders are involved. Regardless of the scale of the financial transaction, the stakes of a merger or acquisition are high.

Confidential documents that mark its path require the highest level of protection. Any information leak could disrupt or even cause the transaction to fail. The data room is a simple, safe and effective protection measure to centralize this confidential data, ensure its confidentiality and monitoring, and facilitate the smooth running of mergers and acquisitions.

Commercial contracts: framework contracts, calls for tenders, requests for quotes

Every day, organizations have to sign numerous agreements with suppliers and subcontractors. These contracts most often contain sensitive data: nature of the services exchanged, amounts of transactions or commissions, payment deadlines, conditions of the transaction, etc. These Documents must therefore be handled with care.

The data room can be used to receive responses to calls for tenders or requests for quotes safely. Its ergonomics allows each authorized person to track and work on the documents they need securely. A data room also makes it possible to create a personalized link for each stakeholder to submit their answers without the risk of interfering with other competitors. Thus, the company saves time by consulting and following all the answers in a single and secure place.

Confidentiality agreements

These are the standard contracts between two parties who are preparing to exchange confidential information. The data room allows you to create automated workflows to simply and efficiently manage the entire process of consulting, modifying and electronically signing these agreements.

Financial audit

A financial audit is a verification of the accuracy of a company’s financial statements, generally required once a year. Audits query all available information and data of the company, from sources of revenue to expenses incurred. It is therefore essential to secure confidential documents and sensitive information made available to auditors. The data room providers allow you to grant access to each file as the auditors request.

Employee integration

Recruitment is a crucial element of a company’s HR management. Integrating new employees is also a key process, as is the delicate moment of breach of contract. These three processes involve many sensitive documents to be protected. Good HR management can rely on data room security to protect and preserve all employee documents and contracts.

Commercial partnerships

Companies working with several partners often have a strong need for daily collaboration, to exchange confidential information, strategies, or projects.

Virtual data room services make it easy to manage multiple exchanges, notes, and modifications on documents without compromising their confidentiality, and to follow their evolutions.

Conclusion

Traditional VDRs have been designed for a small type of customer, most typically in the investment banking sector. However, the new generation of virtual data rooms is designed for a wide range of companies and industries. That’s why it is essential for the firms to get acquainted with the new features of Data Rooms and use them 100%.

About the author:

Elisa Cline, a marketing specialist at datarooms.org, believes that the virtual data room choice should be taken seriously and with the business objectives in mind.

Elisa Cline has carved a niche for herself in digital business solutions. With a background steeped in marketing expertise and a passion for technological advancements, Elisa has become a trusted guide for businesses venturing into the realms of virtual data rooms. With over 15 years of expertise in marketing, virtual data rooms, and cybersecurity sectors, Elisa developed hundreds of marketing campaigns and generated over $13 million in sales when working for mid-sized virtual data room providers.