Globalization is placing new demands on document management. The speed and security of data transfer, storage, and use are now a priority. This is why there is increasing interest in virtual data rooms. What is it, what are its benefits, and why do we need a VDR?
What is a Virtual Data Room?
A Virtual Data Room, or VDR, is a secure online space that is used as a repository for storing and transferring documents. They are created for the needs of each company or its divisions to share information faster.
A VDR looks like an extranet that is accessed by a certain number of external users. Each user can enter and use such an extranet with an individual login and password. The access mode for each user can be configured.
Where are VDRs most commonly used?
The flexibility of the frameworks that are used in virtual data room algorithms allows them to be used in any business sector. The most demanded VDRs are in the following areas:
- Corporate governance. Because of its design, VDR is a convenient platform for sharing and storing information among an unlimited number of users, which reduces the time for document flow between the main and subsidiary enterprises.
- Legal services. High-security standards ensure confidential information, which is often found in legal documents, is kept safe. There’s also no need to worry about document delivery times – your counterparties can receive them in a matter of seconds.
- The financial sector. In this area, it is no exaggeration to say that the use of VDRs is most popular. Virtual rooms are suitable for gathering and storing client documents, preparing documents for tax audits, internal and external audits.
- Industry. VDR functionality gives an opportunity to group documents according to their purpose as well as to store information about work results, perform deals, to keep accounting and tax reports.
The list of areas, where virtual data rooms can be used is not limited. And the scale of business need not matter – they are suitable for large companies as well as for small and medium-sized businesses.
Why do We Need a VDR – the main advantages
In addition to scalability and versatility, virtual data rooms offer some other important benefits. These include:
- A high level of security. We’ve already talked about multi-stage user access to storage, but what we haven’t mentioned is that this access is highly individualized. That is, users can only see the data to which they have been granted access. All other information, including sensitive information, remains intact.
- Use of advanced technology. The latest generations of VDRs are based on artificial intelligence and machine learning algorithms. These algorithms can be used to tailor the storage to the needs of each user, including at the corporate level.
- Convenient functionality. Documents within the data room can be grouped into different categories, a convenient search system can be created, and the content of documents can be checked out without having to open them.
- Adaptability. Thanks to its flexible software, the virtual data room can be used in different areas. And you can expand its space and add or remove functions as your needs grow.
A virtual data room is a step into the future. So don’t ask yourself why we need a VDR, but start using it today.