Virtual data rooms are the most important business solutions used in modern mergers and acquisitions. Clients, lawyers, investors, business owners, and professionals from other fields use data room software for storing and sharing business-critical files and documents. Therefore, it is imperative to choose the right virtual data room vendor as the safety of your important business depends on this.
There are hundreds of virtual data room providers in the market, and the selection process can be very overwhelming. But, with the right approach, this process can turn out to be easier than you imagine.
Here are some important things to consider before choosing your virtual data room vendor.
7 Important things to look for when choosing a virtual data room provider
The security of the virtual data room always comes first; no compromise on that. When you compare virtual data rooms, always consider these aspects:
- Data security. A high-end virtual data room provider makes sure your data is safe from external and internal threats. Make sure the vendor offers data security features like protection against unauthorized users, network firewalls, virus protection, data encryption, etc.
- Physical security includes protection against natural disasters, industry-grade data centers, data backup features, data redundancy, and biometric access.
- Feature security. It is probably the most important part of the security section. Try to look out for as many security features as possible. Common examples include two-step verification, inactivity timeouts, access control, etc.
2. Document access control
Data room management and users must be able to control the documents in the data room. To ensure this, here are some boxes that must be ticked:
- Can the data room admin or file originator restrict a user or group of users from altering, copying, editing, downloading, or printing any document?
- Can the file creator or administration limit someone from accessing any document?
- Does the data room have the digital watermarking feature?
- Is it possible to revoke document access at any time?
- Can the data room management set time limits for user access?
Some features in virtual data rooms can be generally categorized as standard ones, e.g., two-step verification, document access control, digital watermarking, etc., and there must be no compromise on them.
However, some businesses need tailored data room services, customized according to their needs. Let’s say a data room provider has three different pricing plans based on the number of features, but none of those packages suits your needs. Is your service provider willing to offer a custom solution?
It is important to note that sometimes additional but unnecessary features may complicate things, and you may have to pay for benefits you don’t even need. So, look out for a vendor that can make adjustments according to your requirements.
In fact, a data room vendor that understands your needs and gives useful insights and recommendations will be a much better choice. Last but not least, go for a service provider that appreciates innovations and keeps adapting according to industry standards.
Monitoring tools are a must-have in any online data room software. You need a virtual data room provider that gives you the freedom to monitor every activity in your data room. Although monitoring tools are important, keeping an eye on everything becomes mandatory if you use your data room for complex transactions.
For that reason, the data room you choose must:
- Generate second-by-second audit reports; who accessed or changed what, when, and where.
- Provide the screen recording feature so that you can record important conversations, transactions, or meetings.
5. Customer support
An electronic data room with all the features you need is still of no use if the vendor doesn’t have good customer support service. Customer service is not just about setting up your data room or providing basic training to your employees.
Businesses intend to work with virtual data room providers that can collaborate in the long run. It is highly possible that you may face technical difficulties from time to time. Can you count on the customer support service to help you in all possible ways?
6. Track record
Checking the previous track record of vendors should be a mandatory section in your data room comparison. Moreover, it is important to note that different data room vendors provide solutions crafted for a specific industry.
For example, some VDR providers such as Intralinks, DealRoom, Firmex, etc., specialize in M&A data rooms, while data rooms like iDeals are suitable for small, medium, and enterprise-level businesses.
Therefore, to make sure your data room review process is efficient, do the following:
1. Go only for those solutions that have decent expertise in your industry
2. Read online reviews from trusted websites such as G2, Capterra, https://datarooms-review.com/, etc.
3. Get professional advice from industry experts
7. Pricing and free trials
Free trials are a must; no exceptions. They give you practical experience to assess whether a data room suits your requirements or not. Lastly, go for virtual data room providers that can offer you transparent and customizable pricing models — as well as subsequent free trials, lasting from 14 to 30 days.
Summing it up
Online data room software is basically a business asset that will help you achieve your goals in the future. So, consider it an investment and do proper research and planning. Choose a virtual data room provider that makes long-term collaboration easier. The tips mentioned above can make your selection process easier.
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