For any enterprise, data is the most valuable asset that needs to be protected from various cyber threats, the number of which does not stop growing for a second. To store and share your files in a secure environment, companies can use virtual data rooms – a modern solution that will help to solve many problems for companies in any industry and in this article we will tell what is the importance of VDR and how to use it.
Why are virtual data rooms important?
Virtual Data Rooms were created to make your company’s operations as efficient and secure as possible. They not only help your employees in doing business but also increase the trust and predisposition of your potential partners and customers to you. VDR is a cloud-based digital space that acts as secure storage and is used during various business transactions.
VDR guarantees the security of your data during negotiations with a third party because if your partners are negligent about your security, there can be many negative consequences. Everyone knows what a data breach can do, it can undermine your reputation, derail a deal and result in you losing a huge amount of money.
Below we take a look at the most popular applications of VDRs and how they can help improve the performance of your companies.
M&A Due Diligence
M&A Due Diligence is one of the most common cases where data room is used. Originally, the role of VDRs was precisely to provide profitable M&A transactions and then began to be used in a broader spectrum. So why data rooms for such use? The fact is that with VDRs, all those activities that involve face-to-face meetings: checking and analyzing data, signing documents, etc. can now be done remotely, in any place where there is the internet and from any device.
During the due diligence process, companies exchange large volumes of documents and during this exchange, they need to be sure that all this data is securely protected. VDR provides their must-have security by encrypting all documents within the program and automates many processes to speed up the transaction process.
For companies that frequently practice raising capital, the VDR space will also be able to contribute. They offer a secure space to store financial information over time. VDR is also able to simplify previews of all types of documents and images with a smart search function so you can find the information you need in seconds.
VDRs also offer great collaboration features, managers can distribute tasks to individual groups of employees and they can all work in real-time. VDR guarantees the transparency of schemes and activities within the program, which increases the confidence of investors and lenders.
Legal Records Management
VDR gives you the flexibility you need during document management. Since events happening around business documents can change rapidly you can have access to necessary information at any time of the day or night and edit it however you want. Take, for example, the case where two lawyers from different companies need to coordinate a large number of documents between them. They can interact with each other remotely and ask questions in real-time right in space. You can also use the data room to easily add and delete users and upload any files. The best VDRs support files in any format.