The more you ask about opinions, the greater the confusion. That’s because everyone will share their experience from their perspectives. The same goes for virtual data rooms; people will review virtual data room providers differently. If you are seeking an opinion, you may end up gathering more confusion.
Then, how can or how should you choose the best virtual data room solution for your business? Of course, all the data room vendors will claim that their services are second to none, but can you trust everyone? No, and that is why we have prepared a detailed data room selection guide that will help you unfold different aspects of VDR selection.
The following are the factors to consider when choosing the right online data room software for your company.
Need identification: Why do you need a VDR
Virtual or electronic data room software is essentially a digital, cloud-based document repository that you can use to store, transfer, exchange, or share corporate data.
It mostly simplifies the data-sharing process in M&As, IPOs, real estate trades, asset trading, fundraising, licensing, etc. Other major uses include board communication management, meeting management, and remote work collaboration.
Now, the process starts with answering questions like:
- Why do you need a VDR?
- Is it more cost-effective than other alternatives? If yes, who will use it?
- What type of documents do you want to store in the data room?
- How much storage space do you need?
- Do you intend to use your data room for external transactions?
- Do you need it for regular data management or one-time deal management?
Answering these questions will help you determine how much budget you need and what type of features you must have in your VDR. A virtual data room for mergers and acquisitions is different from the one needed for board communication. Read more about M&A data rooms, their uses, and benefits at: https://data-room-software.org/mergers-and-acquisitions/
Make a list of VDR features you need
Need identification makes it a whole lot easier to define the features you should have in your data room. For example, an M&A data room must have communication tools like Q&A modules, due diligence checklists, task manager, data analytics, and advanced document protection features like fence-view mode.
However, some VDR features are mandatory, no matter how you intend to use the technology. Here are some of them.
Certifications
Any secure virtual data room would be at least ISO-certified (ISO 27001 preferably). Other vital regional certifications include FINRA, FISMA, HIPAA, GDPR, and SOC.
Basic security
Virtual data rooms must have basic security features like two-factor authorization, data encryption, audit logs, document access control, digital watermarks, and device purging.
Ease of use
Bulk uploads, drag and drop, full-text search, mobile access, multilingual interface, smart search, and built-in file viewer/editor are some handy features that save time.
Do some research on the data room provider
When you shortlist some service providers, do some research on them one by one. You can consider the following elements.
Vendor’s industry experience
Relevant industry experience is one of the commonly ignored aspects of the selection process. A service provider doing an exceptional job in the nonprofit sector may not be good enough in the commercial arena. Thus, make sure the vendor you are considering has decent experience in your relevant industry.
Customization
The good thing about modern-day virtual data room services is that they offer customized services to their clients according to their needs. It may include custom features and customized pricing packages.
Digital presence
It is highly suspicious if a data room vendor has zero or negligible digital presence. In addition to checking a vendor’s official website, search it on renowned software review platforms.
Data room review websites
Customer reviews are an authentic method to assess the true worth of a data room vendor. Again, don’t just rely on customer reviews given on the company’s website; they can be bogus. You can consult websites like dataroom.org, G2, TrustRadius, and Capterra.
Customer support service
Customer support service is one of the biggest defining factors in choosing a vendor. It is something that you will use again and again as long as you are using the services.
Some virtual data room providers have built a competitive advantage based on their customer care; iDeals is one such example that answers every call or query within 25 seconds.
Free trials
There is hardly a virtual data room provider that does not offer free trials. Some of them will extend the trial period to two months.
Free trials give you a preliminary experience of what you may have to deal with later. Use your trial period and determine if the VDR suits you.
Parting thoughts
Consider a virtual data room as an investment for your business. Start with identifying your needs and defining the budget for the services. Prepare a list of additional features that you need in your VDR. Run a background check on potential vendors, read online customer reviews, and do not forget to get your free trial.
