Data rooms have been used to secure confidential information and sensitive documents for decades. The original data rooms were physical rooms with file cabinets full of documents under lock and key. Of course, physical data rooms became less common once the digital age began, and they started being replaced with server rooms that stored confidential documents as files in computer systems. These days, it’s becoming more and more common for large organizations to rely on virtual data rooms (VDR) and workplus for their data security, time tracking that keeps all your critical operation in check and also enterprise file sharing needs.
A secure virtual data room is a great way to store and distribute confidential information that goes beyond the security of a cloud solution like Dropbox or Google Docs. Also frequently referred to as a “dealroom,” a VDR solution is perfect for the due diligence process during a merger and acquisition (M&A), to secure price information while planning an initial public offering (IPO), or to share legal documents. While they’re frequently used by investment banks, law firms, and intellectual property owners, a virtual data room can benefit most enterprises. Here are seven great reasons why you should be using one.
1. Better Security All Round
If you rely on a cloud solution like Dropbox or Google Drive, you never know how secure your documents or accounts really are. Do you know what kinds of devices are being used to access your sensitive data when relying on these solutions? What if a third party’s computer is infected with malware? Do you know how secure third-party passwords are? These are all concerns you won’t need to have with the advanced security of a virtual data room solution.
2. Document Tracking
Another problem with generic cloud solutions is that you can’t tell what a group member does with a document once they’ve accessed it. The best VDR vendors give you the ability to track any documents you upload to the deal room. This includes being able to see exactly when each document is accessed, and who by, as well as if anyone downloads them. Tracking user activity is critical for document security, as you never know how something might fall into the wrong hands.
3. Digital Rights Management
DRM is becoming a top concern for enterprises of all kinds. While the term is usually associated with protecting intellectual property like music and art, it’s also crucial for protecting secure documents. It gives the owner of confidential data the power to revoke access to it at any time, which is great for virtual data rooms once the due diligence process and any other concerns are taken care of. You can even revoke access to documents after they’ve been downloaded, and dynamic watermarks let you change a watermark even after an image or document has been published.
4. Multi-factor Authentication
In addition to the security features inherently included by a virtual data room provider, admins also have the ability to set up additional security, such as two-factor authentication (2FA). This requires a combination of credentials to get access to documents. For example, a two-factor authentication setup may require a fingerprint in combination with a username and password.
5. Legal Compliance
Keeping your enterprise documents safe using a good VDR also has the side effect of helping you ensure that you’re compliant with all regulations regarding data security and access to information. For example, biotech and pharmaceutical companies are under strict regulations regarding what kinds of data can be shared, and tracking document activity on a secure platform is the best way to protect against data breaches and leaks.
6. Easy Organization
Unlike some digital solutions, a reliable virtual data room boasts excellent ease of use. Folders for confidential files can be easily organized into templates, such as a template for due diligence, one for asset selling to interested parties, one for files from legal firms, etc. This, combined with full control over who can see any document, means that administrators can easily keep track of everything at any time.
7. No-Risk Trials
If you aren’t immediately sold on the benefits of a virtual data room, many providers will allow new users to participate in a free trial. This gives you a risk-free way to see how a VDR can improve your business processes, and you may even find that a collaboration platform improves your business relationships as well.