Virtual data rooms (VDRs) are the next evolution of enterprise solutions for securely storing and sharing confidential information and sensitive documents. Also known as deal rooms, these virtual spaces are often used to conduct due diligence for large business deals like mergers and acquisitions (M&A), major investments, audits, initial public offerings (IPOs), or even fundraising efforts.
VDRs are digital solutions that can largely replace the physical data rooms and bulky data centers of previous years. They provide complete access control for enterprises that need to share confidential documents with specific professionals, like accountants, lawyers, investment bankers, and more in a secure manner. Here are just three of the lesser-known benefits of working with an enterprise virtual data room.
Built-in DRM keeps Your Materials Safer Than Other Options.
While traditional file-sharing options like Dropbox and Google Drive might suffice for the average user, they won’t cut it for your enterprise organization. Relying on traditional options means that you’re taking a gamble on the cybersecurity of each individual who accesses or downloads your files. There’s also no way to tell what users are doing with your files once they’re accessed in such systems.
Most people know digital rights management (DRM) as a method for intellectual property owners and copyright holders to protect their works against piracy and other Digital Millennium Copyright Act (DMCA) violations, but it’s also become the new standard for enterprise document security. DRM is able to protect your documents with encryption, and only approved users with access to each document will receive the appropriate decryption keys. This protects your confidential documents from being accessed by inappropriate users in the virtual data room, and it also protects them against data breaches caused by malicious parties.
Security settings make it easy to choose which group members should have access to which documents and to enforce the decisions. For example, when you’re uploading information like financial reports, you’d probably prefer that they only be accessible to the accountants and financial advisors in the group. You’ll also be able to set individual preferences for each document regarding whether they can be downloaded, shared, or edited. You can even assign extra security features to each document, such as multi-factor authentication, for an additional layer of security.
You’ll Have Comprehensive Activity Tracking Capabilities.
An advantage of working with the best providers in the virtual data room market is that you’ll be able to track every instance of when a document is viewed, downloaded, edited, or shared, and you’ll be able to see which user completed the action. This makes it easier to judge the pace toward the completion of due diligence for complex deals. It also makes it fairly obvious which group members are actually interested in the deal as well.
Additionally, you’ll be able to gauge if a group member is struggling with their document review and reach out to them to try and guide the process a bit better. Naturally, you’ll be able to identify suspicious activity through document tracking as well, such as if a group member has access to files they shouldn’t or if they’re attempting to share documents with unauthorized members.
You Can Rescind Access to Files Whenever Necessary.
Speaking of observing suspicious activity, the best virtual data room provider will equip you with the ability to revoke access to files at any time. These revocations can be for individual users, or you can rescind all access to a file at once. You’ll need to do this at the end of your large deals anyway, but it’s good to be able to revoke access at any time if something seems off. This way, you’re the only one who keeps access to your files in the end.