A Virtual Data Room is a password-protected, browser-based cloud application usually used by companies to check financial, legal, and economic circumstances during M&A deals.
Data Room: convenient access to information in any place, at any time!
The problem of organizing the search and processing of documents arose with the advent of the first large organizations and since then has not disappeared, only passed from one form to another. Humanity is constantly evolving, so there is a need to process more and more information. Accordingly, new tools and methods of documentation processing appear, which optimize the existing work process or take it to a whole new level. Today, electronic document management is becoming increasingly important, but its implementation is slow. Taking into account all the advantages of electronic document management, the question arises, what prevents the transition to the last stage of evolution in the processing of information.
The term Data Room is mainly used in connection with due diligence checks and describes a collection of data and documents that are made available by a company to be sold to the buying company at a specific location.
Due to the increasing complexity of corporate transactions and the need to enable consultants and interested parties to access a Data Room across location and country borders, so-called Virtual Data Rooms (VDRs) are becoming more and more popular. The virtual data room is an internet-based platform or a cloud service that enables secure access and processing of confidential documents through specific access rights.
Virtual data room software enables you to close confidential transactions and make important, up-to-date sales decisions from anywhere while feeling secure. Users can be at home, in their own office, or away from those who can provoke information leaks, in fact, VDRs allow them to meet with a security guarantee. Data Rooms eliminate the need for physical space and the exchange of printed, written data in the form of folders or documents. They can be sent digitally and read on a device of the customer’s choice.
The users of VDR are given the opportunity to perform many different operations on files, for example:
- add new empty files to the database;
- insert new data into existing files;
- receive data from existing files;
- delete data from existing files;
- change data in existing files;
- delete existing files from the database.
Advantages of using a Digital Data Room
VDRs are profitable solutions for the company of the modern market, allowing to store all data of firm on a separate server. To access and work with the information, you need a personal computer with Internet access and log in with a password. Today they are the most convenient for the operation of all structures of the company.
The following advantages are inherent in the electronic Data Room:
- Prompt access to documents, speed in correcting papers.
- Effective document flow management.
- All structures of the company can work in a single information space – this allows you to speed up the coordination of documents and decision-making.
- Improving executive discipline (it allows you to determine the person responsible for the implementation of the document at any time), increases employee productivity.
- Security and preservation of documents – data encryption prevents attempts at unauthorized use of information.
- Reduction of financial costs for document management and office work.
- Improving the procedure of preparation, submission/delivery, accounting, and storage of documents, their authentication, integrity, confidentiality, and irrefutability.
- Fast and reliable exchange of electronic documents with partners, contractors, regardless of the distance of the recipient.
- Reducing the number of on-site inspections of regulatory authorities due to in-house inspections of electronic documentation