Safe and fast communication is the key to success in any kind of business. Whether it is internal or external communication, using secure channels has become the need of the hour, especially when cyber crimes have been a constant headache for businesses.
What’s more concerning for businesses is the vulnerability of traditional online communication channels such as emails. Once one of the most secure email services, Yahoo has been hacked multiple times in the last decade, affecting millions of users worldwide.
If email service providers are not safe anymore, what other options do the businesses have? How do corporations ensure smooth and safe correspondence? The answer is virtual data rooms.
Online data room software is one of the highly rated and accepted innovations of the 21st century. Today’s discussion is about virtual data room services and how they are shaping business communication practices.
What is data room software?
A virtual data room, also known as data room software, is a virtual cloud-based data repository with advanced collaboration tools. Virtual data rooms allow the data room users to store and share business data in a highly secure, controlled environment.
Furthermore, virtual data rooms are also virtual workplaces where businesses can ensure smooth and secure intra-organization and inter-organization communication.
You might ask, how are virtual data rooms different from other communication channels? Why should a business invest in virtual data rooms? How does a virtual data room make correspondence safer?
Here are all your answers!
Virtual data rooms can help businesses in so many ways, but we will mainly focus on how data rooms ensure safe correspondence.
1. Secure data storage and sharing
The ratio of cyber threats increased significantly as businesses switched to paperless document solutions. Virtual data rooms allow users to store and share information without worrying about data security issues, but how?
- Two-step verification. Virtual data rooms have multiple security layers that protect your business data at every step. For instance, the two-step verification feature makes sure that an authorized user doesn’t access the data room, even if the password is compromised.
- Data encryption. The users can share data in encrypted form. That means only the intended recipient can decode the message sent. Top virtual data rooms use 256-bit encryption.
- Digital watermarking. Digital watermarks help in tracking the originator or owner of any digital content such as documents, audios, images, etc. In short, digital watermarking prevents copyright issues.
2. Access restrictions
The virtual data room allows the management to set customized access restrictions for users. That means VDRs not only protect data from external threats but internal threats as well.
For instance, the VDR management can restrict any user or group of users from accessing a specific folder, document, or a part of that document. Moreover, the “view only” feature allows you to restrict any user from editing, modifying, saving, downloading, or printing a specific document.
3. Secure collaboration
Virtual data rooms are great collaboration tools from different aspects. Here is how.
- Collaboration between employees. As we mentioned earlier, data room software are virtual platforms where employees can safely collaborate. They can work on shared documents, arrange meetings through audio and video conferencing features, hold group discussions, engage in private conversations, share documents with each other, and whatnot.
- Collaboration with stakeholders and investors. Datarooms have made it a lot easier for the stakeholder and investors to stay in touch with the companies they have invested in. Depending on the scope of their relationship with the organization, they can access company documents, add notes to them, communicate with each other, participate in meetings, and monitor data room activities (depending on their access level).
- Collaboration with clients. Whether it is B2B or B2C transactions, virtual data rooms have been equally effective. For example, real estate firms can add their clients to the data room and communicate with them throughout the process. With high-end virtual data rooms, realtors can arrange visual tours of the property, share high-quality images with clients, and prepare and get the contract signed electronically.
4. Smooth and faster due diligence
Due diligence is an essential component of significant business transactions such as M&As, real estate deals, IPOs, partnerships, etc. Due diligence is not only overwhelming, but it is time-consuming as well, thus increasing the chances of human error.
However, the virtual data rooms have just made the due diligence process a whole lot easier, smoother, and safer. For instance, during the initial public offerings (IPOs), the data is made available to the potential investors for 3 to 6 months. Interested parties can access required corporate documents 24/7 under a controlled environment.
On the other hand, management can decide how much access should be given to any investor. Management can set access restrictions and monitor data room activities easily.
Similarly, sellers in M&A deals can add multiple buyers simultaneously, while buyers can access corporate files remotely at any time. The due diligence process, which used to take months, can now be completed in days or weeks at max. That is why the M&A industry uses virtual data rooms for due diligence to shorten the deal time.
5. Data room monitoring
Lastly, virtual data rooms allow the management to monitor all the activities in the data room. Management can keep track of who accessed what, when, and from where. Data room audit logs provide complete reports of users’ activities. This feature is very handy during data-sensitive deals such as mergers and acquisitions.
Want to know more about virtual data rooms and the best data room vendors? Datarooms.org provides the best information on data rooms.
With cybercrimes becoming more common, especially in the last decade, corporations have switched to more reliable and secure platforms, such as virtual data rooms.
Online data room software is secure, easy to use, simple, remotely accessible, and most importantly, it is an economical alternative to paper documentation.
Making your business data safer with a virtual data room is a decision you will be proud of in the future.