Evolution of data rooms
If we look back around ten years or so, we would actually be able to understand how far we have really come. This scenario is particularly true in the case of organizations, both large and small. This is because even after the introduction of commercial computers in the market, people still preferred using the old way of doing things. This is because they were not ready to accept change, much less take an initiative of learning the new techniques. So rather than using that electronic device, more commonly known as a computer for getting work done and storing all sorts of files, people preferred the option of getting all of this done in a manual manner. Even though it took days at a stretch, it is something which they were pretty content with.
During that time, there was another introduction in to the market. Known as electronic data room, or even virtual data rooms, as most people like to call it, it was something which was released in the late 1980s. Now upon hearing this, you might be thinking that this kind of a software probably had no use for the time that it came in to the market. This is because one of the main uses of an electronic data room was found for the underwriting of debt. Other than that, people really could not understand much about what area to put it into good use. It is because of this reason that it was found that despite this kind of a magnificent thing being available for everyone to use, it was not properly utilized. But that does not mean that it would not one day become one of the most sought after software system on the face of the earth.
In the current day and age, you will be able to see that an electronic data room has become more of a necessity in practically all sectors of business. Starting from medicine to law, and particularly business, you will be able to see companies adopting this electronic database system. Currently, this has become even more important because mergers and acquisitions seem to be on the rise. As a result of this, companies have found that the process of due diligence not only eats up a lot of their time, but it costs them a lot of money as well. As a result of reducing it to some extent, they decided to introduce virtual data rooms in their companies. Once that has been done, they were able to see the changes unfold right in front of their eyes.
The initial challenges faced with virtual data rooms
Even though an electronic data room has become quote popular in today’s times, it did not always enjoy the limelight that it currently does. This is because electronic data rooms were mainly used for financial purposes – nothing more than that. Even though some other uses were discovered, they were not that widely accepted. This brought the makers back to square one. In other words, despite its humble beginnings, people were slow to realize and accept the massive benefits that this software seemed to hold.
Some of the challenges which were faced as a result of getting the electronic data room introduced are as follows:
• Some of the executive clients such as lawyers, bankers, and corporate executives had to be convinced about the value which could be provided by virtual data rooms
• There was very heavy resistance regarding the option of shifting to a completely new way of storing files
• Since an electronic data room meant that the overall control and power would be given to an external vendor, people voiced their concerns regarding the safety and security of all the confidential information that their database contained. As a result, the introduction of virtual data rooms was met with resistance since the people did not want to hand over all the files to this vendor
• With the documentation process growing at each and every stage, it meant that more people and resources would need to be utilized. Even though this is something which is entirely not possible, people were still not willing to acknowledge the existence of virtual data rooms.
Even though these challenges regarding an electronic data room was something which was faced in the early stages, these no longer seem to exist. This is because people have come to realize that the benefits which can be provided by an electronic data room heavily outweighs the benefits which can be obtained from using a traditional database system.
How progress was made locally
One of the main challenges which was faced in the case of an electronic data room is to get it implemented in a global context. While it is definitely true that some form of resistance was being shown in the local areas, people were even more unwilling to understand how they would be able to put their business on the global map.
This is because back in the day, people were more familiar with the idea of conducting a face to face conversation. This is despite the fact that they very clearly knew about the existence of a virtual world. As a result, it was quite difficult to convince the bankers and lawyers that adopting virtual data rooms would work in the best interest in their company. So, even though it was quite difficult, it was definitely not impossible. After years and years of effort, an electronic data room has received the high mention that it truly deserves.
Benefits of implementing an VDR
As a result of introducing an electronic data room, there are undoubtedly several benefits which can be enjoyed. Some of the most common ones are as follows:
• One of the major benefits which can be highlighted is the reduced cost of operations. This is because the companies would no longer have to bear the additional expenses of purchasing papers and creating files. In addition, this also means that the executives would not be required to travel different locations to conduct their meetings. They would be able to do this from any corner of the world.
• With the help of an virtual data rooms, the users would be able to enjoy round the clock access. So whenever the need arises, they would easily be able to log on and work on it. This is something which was not possible in the case of traditional database systems. This is because each of the user was allocated a specific time within which they could access and view the documents.
• All the important documents and confidential information would be stored in a secure location with remote access. This means that no additional costs of storage would need to be borne. In addition, with high security measures, they would no longer need to worry about their confidential information being stolen or leaked.
Uses of virtual data rooms
An virtual data room was commonly recognized for being a software which was used for the sole purpose of calculating debt. Fast forward to the 21st century and you will be able to see that its needs have become diversified in almost all sectors. So, if you are wanting to know how far the virtual data rooms have come from their humble beginnings, look at some of the examples which have been listed below.
• Mergers and acquisitions
Everywhere you look, you will be able to see that companies are either joining together or are being taken over by another company. In that case, you might be wondering why that is really happening. This is because with the degree of competition increasing with every passing moment, companies have the pressure to outperform themselves. This is something which is not possible to accomplish on their own. Therefore, by teaming up, they would be able to share the ideas, cost, and resources.
So, thanks to an electronic data room, all the confidential data and business plans could easily be shared over the cloud network. This would allow multiple parties to access the documents and work on it.
• Financial and corporate institutions
In the current global economy, virtual data rooms have earned quite a name in the corporate and financial institutions. They tend to provide excellent storage solutions of critical information which seem to be used in financial records, contracts, as well as legal files.
• Human resources
Human resources is that department whose sole purpose is to deal with employees and all sorts of matters that are related with them. Even though it might seem quite mundane, you might be wondering about how virtual data rooms could be put to use in a human resources department. The thing is that confidential employee records seem to be stored with this department. Therefore, thanks to an electronic data room, they would no longer need to worry about these falling into the wrong hands.
Lastly, the marketing department would also require an electronic data room. This is because they would need to store all their important marketing budgets and campaign plans.