The data room Market size was estimated to be worth USD 1.6 billion in 2021 and is anticipated to rise to USD 3.2 billion by 2026. An increasing volume of business data and the shift toward remote work during COVID-19 are expected to drive the adoption of dataroom software and services.
What is a data room?
A data room also referred to as a virtual data room (VDR), is a secure online environment for storing and sharing confidential documents and project management during complex deals. Data room providers have different types of software that fulfill the needs of businesses in all industries.
Key benefits of virtual data rooms
VDRs have become an essential tool for the secure sharing of sensitive information. Let’s define VDRs’ main benefits:
- Security measures. Security is one of the primary concerns when sharing sensitive data. VDRs offer a range of security measures, such as authentication, document encryption, access control, etc.
- Document management and control. Using a virtual data room documents can be easily uploaded, organized, and indexed in a structured manner. VDRs also offer advanced control features, such as watermarking and printing restrictions.
- User-friendly interface and easy navigation. Intuitive interfaces, organized document folders, and advanced search capabilities ease the process of finding information and make it quicker.
Key steps to setting up a data room
Here are the steps involved in setting up a virtual data room that brings maximum benefit to your business:
- Choose an online data room provider.
Data rooms have the same setup procedures, but providers differ with extra features, cost, or customer support options. Users look for the best virtual data room that will suit their business needs. Some key points when looking for a data room provider:
- Your industry. Make sure that a data room has all the necessary features and all required certificates and can offer tailored solutions for your company.
- The function you need. Some businesses may use Google Drive data room and will be fine, while others look for a VDR with advanced features and specific tools. For conducting the due diligence process or during M&A transactions you can use special data rooms. Data rooms for due diligence or virtual data rooms for mergers and acquisitions have all documents involved in the process included in the data room setup. All parties involved in transactions will have different documents they need to store and view.
- Pricing. It is one of the crucial points when choosing a dataroom software provider. The price should suit your company’s budget.
- Reviews. Look for real reviews and customer testimonials to see whether a particular VDR is perfect for your needs.
- Prepare the documents.
If all your sensitive files are already digitized, just upload them to the data room. It is important to double-check whether some physical papers are left and if they are needed — digitize them. Make sure all the documents are up to date and check if all the information on the scanned files is perfectly visible.
- Upload and organize files.
With a drag-and-drop feature, you can move the whole file and folder structure hierarchy if you have one established on your device already. The VDR will then index files automatically and it will be a ready-to-use workspace. Thanks to the document viewer working with files will be swift and smooth. This allows to view text-based documents and Excel files directly on the structure in the VDR to organize and classify documents.
- Customize the interface.
Customize the virtual data room and invitation emails with corporate colors and logo. It will create a smooth experience for third parties and make a nice impression. Some providers offer features to customize watermarks with colors and patterns to your taste.
- Add users.
Depending on the VDR pricing, you can add a certain number of administrative users. Team members will be added to the workspace to have control over papers and work with them. There are file permissions including viewing, downloading, and editing.
- Invite third parties.
You can invite potential buyers, partners, or authorities to the data room while approaching a business deal. A set of permissions allows you to control the access level requested users have. According to users’ roles, admins can create groups and allow them specific features and access levels.
- Fill in the Q&A section.
With the help of this feature, you can answer all the frequent questions before the deal to create some kind of knowledge base. The assigned person can answer all the new questions from third parties to accelerate the deal.
Conclusion
To overcome possible challenges during setting up a data room, you should follow several key steps, as proposed above. These steps, combined with expert support from your vendor of choice assistance, will ease the process of data room setup and make it quicker and more efficient.