Using several analytics tools, Bain & Company discovered several challenges organizations face today in terms of collaboration. This includes an overwhelming volume of e-communications, a notable increase in meeting times, and a rise in dysfunctional meeting behavior.
To address these challenges, companies use data rooms. What they are and how they can be helpful is described below.
What is a Virtual Data Room?
A virtual data room is a secure online repository used for storing, sharing, managing, and collaborating on confidential information during various business transactions and processes. They include mergers and acquisitions (M&A), initial public offerings (IPOs), fundraising, legal proceedings, restructuring, and bankruptcy.
A data room offers numerous benefits, among which:
- Cost savings. Meeting partners, colleagues, and clients offline incur expenditures on things like travel, venue rental, accommodation, and meals. In fact, on average, a large organization spends about $80,000 on meetings per employee per year. About 30% of those gatherings turn out to be unnecessary. A data room eliminates the need for face-to-face meetings, decreasing their cost.
- Time efficiency. Data rooms are available 24/7 from anywhere, so you can access and manage documents, leave comments, and ask and answer questions in a few clicks, significantly speeding up all business processes and accelerating decision-making.
- 24/7 support. Generally, data room solutions are so intuitive that even less tech-savvy users can start using them right away. In case of questions or issues, 24/7 support ensures users have access to immediate assistance. Moreover, providers usually have a dedicated manager who helps customers with onboarding and explains how to structure a data room and make the most use of it.
The Need for Secure Collaboration Tools
To get their work done, company workers should collaborate and other parties regularly. While office employees can do that right onsite, remote workers need special tools to communicate, participate in group meetings, share files, and engage in other collaborative activities.
That’s why the need for secure collaboration solutions is increasing. Its first significant rise occurred during the pandemic. “While consumers and early adopter businesses had widely embraced collaborative applications before the pandemic, the market saw five years’ worth of new users in the first six months of 2020,” said Wayne Kurtzman, the research director at IDC.
Today, the collaboration software market continues to grow. It’s expected to reach $53 billion in 2032, three times more, in comparison with $16 billion in 2022.
The collaboration software products range from simple messaging apps to more advanced video conferencing solutions to full-featured communication and collaboration tools with cutting-edge features and top-notch security. A data room belongs to the latter category.
Let’s explore how exactly this software can be useful for businesses.
Key Data Room Features for Secure Collaboration
Here’s what data room providers offer for secure and effective collaboration.
#1. Security Features
- Two-factor authentication requires users to provide a code sent to their phones as the second form of authentication, adding an extra security layer.
- Granular access controls allow data room administrators to modify the access permissions according to users’ roles and responsibilities, minimizing the risk of data exposure.
- Dynamic watermarking adds an extra layer of security by embedding a semi-visible mark to the document, demonstrating who and when viewed the document. This prevents data leakage or helps to track the source of leaked information.
#2. Collaboration Features
- Q&A sections provide a secure space for users for real-time collaboration and communication. Several virtual data rooms offer such functionality as auto-assignment of questions to experts, which eliminates the need for manual processes and makes collaboration more efficient.
- Notifications keep users informed about relevant activities within the data room, such as updates on document changes or new discussions.
- Commenting allows users to discuss document-related questions right within the document.
#3. Document Management Features
- Bulk upload and drag-and-drop features allow users to upload documents fast and easily, which saves a lot of time.
- Labels like department (legal, financial), region (America, Europe), and status (draft, approved) help to classify files and folders on various parameters, which simplifies their organization, search, and management.
- Advanced search allows users to find documents easily by applying search filters or entering keywords.
How to Choose a Virtual Data Room Provider?
Here’s a short four-step guide on how to select a provider that will suit your needs most:
- Define your needs. While some providers offer just basic features for storing and sharing documents, others have various tools for communication, collaboration, analytics, and reporting.
- Define your budget. On average, a data room costs from $400 to $1000+ per month, depending on the number of users, data storage volume, features, level of support, and additional services.
- Compare virtual data rooms. Look through the virtual data room review websites like Capterra, G2, and Software Advice to learn what other users think about specific data room solutions.
- Test a data room. The majority of providers offer free trials, so don’t miss the opportunity to test a platform you’re interested in for a few weeks. This will help you decide whether to invest in the software.
Plenty of companies choose a virtual data room as a secure and efficient tool for collaboration. Try yourself and take your business to the next level!
