When documents get involved in the workflow, all processes become more complex as participants need to manage the papers. But technology is here to simplify our lives and remove all the hassle. If you’re interested in how tech can solve existing problems related to document-heavy business processes, stay with us — this article will tell you about the ultimate tool.
What is a data room due diligence?
A virtual data room for due diligence is a service that allows companies to upload, manage, share, and collaborate on documents. This might sound like a generic cloud storage we’re used to, but a data room for due diligence is a more complex tool that’s suited for the needs of businesses when performing due diligence processes.
What are the advantages of a data room?
A data room for due diligence is an ultimate business instrument that can simplify not only due diligence but other document-related processes as well. Let’s take a look at the benefits you’ll get once you adopt this tool.
Security for your files
Holding due diligence in a data room assures you that your documents are safe. Leading providers use bank-grade encryption to protect files and data transfer. Vendors also usually provide two-factor authentication that will keep unauthorized users away and eliminate human mistakes. Additionally, most vendors will provide you with other tools such as watermarks and fence view for better protection of your information.
No data leaks
Both you and your provider will be defending your information from the leakage — the vendor protects it with encryption, while you can add two-factor authentication and use other safety functions. Also, since you have control over who can see and work with the files, you can be sure your information won’t get into the wrong hands. And as an administrator of a data room, you’ll see the activity of all users — therefore, you can spot any suspicious activity.
To begin preparing for due diligence in a virtual data room, you need to upload files. This is usually easily done with a drag-and-drop feature that allows you to upload documents in bulk. If you already have a structure of folders on your computer, you can preserve it by uploading files to your data room. Once all documents are in the repository, you’ll only need to do some final touches and make sure everything is organized. Then your data room is ready for other participants to join the process of due diligence. Simply invite them to the workspace — you will be able to control who can access, edit, share, and print files.
Most top providers make their data rooms suitable both for desktop and mobile devices. Therefore, you and other participants of the due diligence process will be able to access files even on the go — you’ll only need your smartphones or tablets and an internet connection. Data rooms don’t limit mobile users in features, so everyone will feel comfortable.
As all participants of the due diligence process have access to all the necessary files, and they can leave comments there to clarify details, the workflow becomes smoother as the communication gets better. Also, virtual data rooms offer tools like a Q&A section where sides can get answers to their questions and keep all the information in one place. Finally, you can set up notifications so that all users are alerted when some files are uploaded to the data room, or existing documents are changed.
Which industries can use data rooms for due diligence?
Any company can benefit from this technology regardless of the field of activity. However, you should check if the provider you’re going to choose offers the certificates and specific functions you might need. For example, Life Science firms will require a data room provider to have special certificates — that’s regulated by governments to ensure no crucial information gets out. But in general, any company should implement a data room into the workflow to simplify the management of files, protect the information, and improve the teamwork.
A due diligence data room checklist
Here are the key criteria you need to keep in mind when choosing a data room provider:
Companies from specific industries might require special certificates.
Make sure the data room offers all the functions you want to have.
The costs should fit your budget. The price usually depends on how advanced a data room is and on the popularity of a provider.
The best vendors make their software suitable for all devices, but you still should check this criterion.
Look for both professional and customer reviews to be aware of all pitfalls.
The best data room providers for due diligence
You don’t need too many features for this business process, so it’s better if the service is not overloaded with functions you won’t use anyway. Of course, each business has its unique needs, and, consequently, looks for different features when choosing a data room. Given all these, we can name some providers that can satisfy the expectations of most companies: