Finding a virtual data room is not a challenge these days, as there are over 350+ virtual data room providers worldwide. In fact, you may easily find data room vendors in your state or country. The real challenge is to find data room software that fits your business needs.
Businesses from different industries have unique ways of doing things, and thus, their requirements also vary greatly. That is why modern-day data room services are more industry-specific. There are data rooms for real estate, life sciences, M&As, private equities, etc.
Apart from that, there is immense competition even in niche-specific services. So how would you know which online data room software is best for you? Here is a detailed guide on choosing the best data room vendor for your business.
Things to consider when choosing virtual data room software
A virtual or electronic data room is a cloud-based data management solution with advanced features for online business meetings, communication, and project management. What’s more, businesses utilize data room technology for different purposes, such as corporate data management, due diligence, board communications, data sharing, prospecting, etc.
How you intend to use data room software will help you assess what type of features you should look for in your purchase. Here are some important things to consider before and during the procurement process.
1. Need identification
Just as stated above, need identification is important. Why do you need a virtual data room, or what do you intend to achieve with it sets the base for the next steps. Do you want it temporarily for deal-making or data sharing? Or do you want to incorporate it into your data management system?
Also, it is important to assess the impact of data room software on your business. Will it make your business operations better? Moreover, is your workforce equipped with basic IT skills to use software with minimal training? Find the answers to questions like these.
2. Budget setting
Virtual data rooms come with different pricing models, and every model has its own benefits and drawbacks. Defining a budget will give you an idea about what types of services you can afford and which pricing model will work better for you.
3. Feature identification
Features in virtual data rooms can be categorized as basic and advanced. It is important to have a secure data room rather than a fancy one. Therefore, start with basic features and then move to advanced ones if you need them or your budget allows them. Advanced features will definitely cost you more as they bring more value.
Following are some necessary features for VDRs.
|Ease of use
|Two-factor authentication Digital watermarks Document access control Fingerprint login Document access revocation Document shredding Audit logs
|Mobile access Customizable dashboard Real-time notifications User-intuitive design
|Bulk uploads Drag-n-drop Document viewer Excel file viewer File format converter Video player Image viewer Full-text search Document sharing tools Annotation tools Editing/co-editing
|Chat messengers Meeting management tools Live polls Voting tools
Some advanced features include smart search, fence view mode, Q&A modules, data analytics, branded website, priority-based customer support service, etc.
4. Research of the market
Even if you find your desired features in a data room, it is necessary to dig up some facts and compare virtual data rooms on your own. For example, you can consider the following aspects.
- How flexible is your vendor? Although service providers have multiple packages for you to choose from, some vendors go a step further to develop customized solutions. It will be great to work with such vendors.[Text Wrapping Break]
- Is the vendor certified? It is the most important aspect related to a data room vendor. Look for ISO-certified service providers, as ISO is a globally accepted body. Second, choose a data room vendor that complies with local regulatory requirements based on your industry. For instance, data rooms for financial institutions in the US must be FINRA-compliant. Similarly, VDRs for healthcare and life sciences must be HIPAA-certified.[Text Wrapping Break]
- What do the customers say about the vendor? One of the best ways to determine the truth about a vendor’s services is to read online customer reviews. They will give you a better idea of what you should expect from the service provider. Most importantly, read customer reviews from trusted sources like G2, Capterra, and Software Advice.
5. Free trial request
Last but not least, always demand a free trial. A free test ride will give you practical experience, and this is when you will decide whether this service suits you or not.
As you can see, finding a data room that will perfectly meet your needs is quite a challenge. However, with the right strategy and tools you can find just what you’re looking for.
Below is a checklist for you to start with and get the desired outcome:
- Identify your short-term and longer-term strategic needs
- Allocate your budget for the data room software
- Identify the must-have and nice-to-have features
- Conduct some basic market research and comparison
- Request free trials and make your final opinion