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| PHOTO BY: Huffington Post |
BY: MOHD EZLI MASHUT
SMART BUSINESS STRATEGY: A Term Virtual Data Room (VDR) is new for all of us. But it is important to increase efficiency in business, management and enable smart decisions and solutions.
Its technology allows negotiating parties in a business deal to exchange crucial information more rapidly, regardless of the distance between them.
What it is Virtual Data Room (VDR)?. As the name suggests, VDR is an online database in which companies can store and share confidential information, usually used during a financial transaction.
It is a tool which all businesses should consider using to increase efficiency of communication and data sharing.
As of April 2016, it was estimated that market revenues for VDR companies were more than $800 million, with annual growth rates for individual companies increasing by double digits.
Virtual data rooms eliminate this need since documents can be shared online, therefore offering users convenience and added security.
M&A due diligence is a common use case for a VDR. Merging with or acquiring other businesses involves a lot of research, and particularly the furnishing and review of volumes and volumes of documents.
For companies merely entertaining a purchase offer, it can be daunting to hand over the sensitive data that will be requested. Thus, companies heavily engaged in MA can still participate in negotiations and allow for the safe viewing of valuable, confidential data by relying on a purpose-built VDR.
And, in the event that a deal does not close, access to the data room can simply be terminated.
For financial transactions, virtual data room software has become the norm, replacing the once-ubiquitous physical data rooms. Physical data rooms had their limitations and were time consuming and inconvenient for the parties involved.
VDR is a more secure version of traditional cloud storage and in the past few years it has become even more popular as a digital document sharing system.
The main purpose of VDR is to advance corporate exchanges and online data transactions and this is observed in business deals where virtual data rooms allow negotiating parties to exchange information faster and more efficiently, regardless of proximity.
How Is VDR Useful For Business?
Due to its paperless function, VDR makes it easier to process legal documents because there’s no need to look through individual hard copies – which can be time consuming and extremely tedious.
The corporate world is currently improving on some of these features by adding verification protocols and access control systems to enhance security and data privacy.
As of late 2016, market revenues for VDR were estimated to be over $1 billion, with growth rates for individual companies increasing by double digits. Evidently more people are noticing the benefits of using virtual data rooms in today’s business world.
What Are Some Of The Benefits Of Using VDR Today?
VDR technology offers a number of benefits to businesses with regard to file sharing and securing private data. For example, the normal detection requirements and due diligence associated with corporate deals make VDR the perfect solution for holding private meetings and discussing business deals.
In addition, current IT deployment capacity and infrastructure are continuing to grow, which means that users can expect more advanced features over the coming months and years. This has the potential to enhance marketing, business networking, and boost sales, as some of the core business processes will be done faster.
Entrepreneurs prefer VDR to conventional forms of data exchange and the main reason is that it lowers the risk of valuable information falling into the wrong hands.
Data-sharing in the past involved land-based systems that were too laborious and inefficient, as all participants had to be physically present in order for any transaction to proceed.
Apart from corporate file sharing, VDR can be used in mergers and acquisitions because they provide features that facilitate efficient M&A processes such as searching for buyers, proceeding with due diligence, and even post-merger integration.
Other ways that VDRs can be useful is in project management, investor reporting, fundraising, intellectual property management, and financial auditing.
Benefits Of The VDR Boom To Entrepreneurs
Most entrepreneurs prefer VDR to traditional forms of data exchange mainly because it minimizes the risk of information theft by third parties not involved in a transaction.
In the past, data-sharing was done mainly via land-based systems, which proved to be quite laborious. It was also inconvenient, as all participants in a deal were required to be physically present for the transaction.
However, with the emergence of virtual data rooms, business processes can be completed much faster since most documents can now be shared online. The main reason why this technology is taking over land-based data rooms in 2017 is the convenience it provides to users.
VDRs are also commonly equipped with tools that aid in communication, which physical data rooms often lack.
Other benefits for entrepreneurs :
1. Accessibility from anywhere across the world.
2. Easy to navigate.
3. No space limits.
4. Easy duplication of files.
5. Only a single DVR is necessary.
REFERENCE:
1. www.securedocs.com
2. www.entrepreneur.com
KEYWORD: Virtual Data Room, VDR, Smart Business, Business Services
