Modern business demands a modern approach to problem-solving. One of the most pressing issues is data storage. What is more reliable now – storing documents in an archive or using digital technologies? For those who have not yet had a chance to evaluate the possibilities of cloud storage, we tell you what a digital data room.
What is a digital data room?
Let’s start with the simplest thing – a definition. A digital data room is a cloud-based service, which provides the ability to store, use, and share documents. Most often these data rooms are used for transactional purposes (especially during a merger or purchase transactions), but also for conducting due diligence.
There are two types of digital data rooms:
- virtual data room is a repository whose main purpose is the preservation of documents (including confidential documents);
- physical data room – a platform where documents necessary for the compilation of transactions are placed.
Only registered users can access digital data rooms. But there is a difference between the two types of storage. A virtual data room can be closed to many users. Each user can, however, be given different types of access: for example, user 1 can only view documents, while user 2 can already move and print them.
The physical data room contains only those documents that are necessary for the transaction. It is, however, accessible to all authorized users for the pre-checking of the documents and to the parties directly involved in the drafting of the documents.
Features of digital data rooms
Cloud-based services for document storage have long been an established practice. However, digital data rooms are something new in the world of cloud technology. The key features of digital data rooms include:
- Provide a higher level of security. In order to access a digital data room, you have to go through a multi-level access procedure. The administrator of such a room can set a ranking of user access. Some may be given wider access, while others will only be able to view the room.
- They have a clearer internal structure. Documents that are transmitted to the digital data room can (and even should) be structured for quicker retrieval. The administrator is free to divide the documents according to the parameters that will be most useful for each individual company.
- Provide seamless access. A login and password are all that is required to access the digital data room, while a higher level of access is possible by means of additional authentication. No need to only use a work computer to access, any other device may be used from anywhere in the world.
- Higher cost-effectiveness. Buying, installing, and maintaining an enterprise digital data room is far more cost-effective than using cloud services for the needs of a specific department or employee. When it comes to assessing due diligence, there is no need to pay for the costs of an auditing party – simply granting them access.
There are quite a few provider companies on the market that provide digital data room installation and support services. Therefore, everyone can choose the platform that best suits their needs.