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The Complete Guide to Data Rooms and Other Collaborative Tools for Data Analysis

Being the Unsung heroes of M&As, and revolutionary data management solutions for the financial sector and investment banking, virtual data rooms are now an undeniable force in the global business fraternity. To start with, data room services are not limited to M&As or financial transactions anymore; they are now serving all business industries in different ways.

But, what is a virtual data room? What does it do? How does it help businesses? Who is using online data room software? Here is a comprehensive guide on data room software that will help you learn everything about this remarkable piece of technology.

Photo by Luke Chesser on Unsplash

What is a virtual data room?

A virtual or electronic data room is a central, highly safe, cloud-based document storage repository for businesses, professionals, firms, service providers, nonprofits, and government institutes to store, share, and manage confidential or daily-use documents.

In broader terms, data room software is a multi-purpose business solution that acts as;

  • Data repository hosted by certified virtual data room providers where businesses can store, share, edit, exchange, and manage their sensitive data. Certified data room providers are the ones that strictly comply with national and international data security standards. Also, virtual data rooms can store data in almost all globally used file formats.

  • Virtual collaboration place that is globally used for centralized business communications. Data rooms are cloud-based solutions which means the users can access them from anywhere. Businesses that use data rooms as collaboration tools make sure their employees communicate within the data room. In simple words, all the communications take place on a single platform.

  • Online deal room with advanced project management features that assists companies, private equities, and other mega enterprises in undertaking complex transactions like fundraising, asset management, real estate portfolio management, capital raising, initial public offerings, mergers, and acquisitions.

Who uses virtual data rooms?

Data room software is immensely popular in almost every business sector. Still, we are narrowing it down to some major consumers of virtual data rooms.

  • Legal industry
  • Healthcare industry
  • Pharmaceutical companies
  • IT firms
  • Service providers
  • Financial institutions
  • Corporate sector
  • Nonprofit organizations
  • Freelancers
  • Oil and energy sector
  • Education sector

Read more about virtual data rooms here https://dataroom-providers.org/.

The best data rooms: Top players

There are literally hundreds of virtual data room vendors in the market right now, and it can be very daunting to find a reliable one. So, here are some of the best virtual data room providers in 2022.

  1. iDeals Solutions — one of the industry leaders
  2. DealRoom — recommended for due diligence
  3. Google Workspace — best for online collaboration
  4. Ansarada — useful for freelancers and remote workers
  5. Merrill Datasite — handy for complex or large-scale transactions.

Other trustable names include ShareVault, SecureDocs, Firmex, Firmroom, and Digify.

What can you use virtual data rooms for?

1. Business collaboration

Virtual data rooms have the latest collaboration tools commonly used in the corporate world. For instance, video or audio conferencing tools are used by remote teams, directors, managers, stakeholders, investors, and other employees depending on their needs.

Real-time data sharing is another worth mentioning collaboration tool in virtual data rooms. Data room users can share hundreds of files with hundreds of users in the data room. They can edit, annotate, or alter documents in real-time.

The Q&A module feature is super effective in external dealing or unusual business transactions. Virtual data rooms provide users a separate space where they can ask questions and get answers immediately and vice versa.

2. Data analysis

Modern AI-based virtual data rooms help businesses with analyzing past data to make future projections. Based on past available data, VDRs can forecast future market trends, help with financial projections, and expected market changes.

Apart from that, artificial intelligence in data rooms can help the administration in identifying users’ data usage patterns. For example, during diligence or M&As, seller companies can assess which documents are being mostly used by the potential buyers, which ultimately helps sellers structure their folders in better ways. 

3. Secure and centralized data storage

It goes without saying that virtual data rooms are primarily popular for centralized and highly secure data storage. VDRs allow you to keep your business documents of different types (e.g., financial documents, tax records, HRM details, licenses, contracts, agreements, intangible assets, etc.) in one single place. Most importantly, you and the authorized users can access them from anywhere, anytime.

Apart from that, features like document access control, two-step verification, digital watermarking, remote device purging, document shredding, audit logs, and data encryption protects your documents from internal and external threats.

Final words

Virtual data rooms are highly safe and remotely accessible document storage platforms with advanced collaboration tools and deal-making features. VDRs are controlled and hosted by certified virtual data room providers without any interference from third parties. They are secure, easy to use, and of course, cost-effective.




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