With gigantic amounts of data regarding products and/or services, sales, marketing, customers, etc. exchanging hands on a daily basis, data sharing is essential for an enterprise. Regardless of whether data is distributed within different parts of the organization or with other entities, doing so in a secure fashion is critical for carrying out an effective and efficient digital operation.
In other words – it’s crucial to enterprises’ future, especially when you consider the number of potentially vulnerable security points.
Secure data sharing is arguably an enterprise’s biggest concern. CIO.com’s 2020 State of the CIO study showed 31% of CEOs list upgrading IT and data security to boost corporate resilience as a top priority in leading digital initiatives. The same study showed one-third of CIOs saw security and risk management as the primary driver of overall IT spending at their organization.
A much-needed dose of flexibility and mobility
The increasing value of data and its ensuing safety gave birth to the virtual data room or VDR (also called a dataroom or a virtual deal room). Little by little, it evolved into a highly beneficial solution for troubles large companies are facing. With cybersecurity and data privacy and compliance becoming key responsibilities for the entire C-suite, one of the prevalent trends in the past few years was spending on security products, often leading to budgeting and security issues.
With a complex enterprise security environment where speed and agility are heavily relied on, a VDR is a step toward simplification – not to mention a fast way to improved corporate governance.
In a nutshell, a virtual data room is a cloud-based secure online depository for all the critical data an organization wishes to safeguard. Because it facilitates 24/7 access from any device and location in the world and boasts robust security features, a VDR is ideal for a variety of complex business operations and processes such as M&As, audits, interdepartmental file sharing, strategic partnerships, and others that call for disclosure and sharing of confidential documents in a controlled environment.
As such, one huge advantage VDRs have over the more traditional data sharing services such as Google Drive and pCloud is the centralization of data. When it’s siloed across an organization, data is inherently difficult to share and access. Its flow is interrupted, causing broken communication and fragmented information. Centralized cloud storage on a single platform allows a host of individuals across the organization, as well as to those outside of it to find the information they need with a couple of clicks and share it in a secure fashion.
Sharing files, not frustration
Speaking of security, it only makes sense to mention the key mechanisms that enable safe data sharing. Let’s start with encryption as every document and attachment, as well as connection to the VDR is encrypted, typically with 256-bit encryption – one of the most secure and widely used encryption methods. Furthermore, you’re bound to run into features such as:
- web fencing;
- multi-factor authentication;
- single sign-on (SSO) integration;
- suspicious login detection;
- digital watermarking;
- extensive activity tracking.
Part of the reason why security risks are minimized through a VDR is the granular level of control, which allows a business to set access permissions and retain the supervision of its own data. Document permissions and restriction settings protect against unauthorized use, granting access to only those users with proper credentials. Furthermore, AI-powered analytics and reporting offer a breadth of insights relevant to data governance: active users (e.g. in-house workers, external consultants, remote employees), recent searches, most viewed documents, access permissions, data transfers, audit trails, and so on.
One could even argue that operating within such a tightly governed environment reduces the chances of human error. Employees are perhaps the enterprise’s weakest link when it comes to data security, often engaging in careless practices such as sharing confidential information over an unsecured platform or sending it to a wrong person. With limited access to some users and documents (and even portions of documents), such scenarios are unlikely to happen.
Another advantage is one oft-repeated, yet still high in importance in the online business world: digitalization of all documentation. Digital management of financial and administrative documents and contracts has become fairly straightforward and more intuitive than ever before. Critical documents can be easily created, edited, shared, and signed. Files can be organized in different ways and coupled with enhanced search functionalities like meta-tagging and optical character recognition, for instance, so that everyone pertinent can find the information quickly and easily.
A VDR can also be a part of a more encompassing turnkey solution such as ContractZen, where multiple tools such as metadata-driven contract management, board portal (meeting management), company register, and others are bundled under one roof. Such integrated services bring together several governance solutions for easier and more efficient corporate governance.
Most VDR providers offer similar features packaged with compliance with major international security certifications. Some focus primarily on offering VDRs for different industries and speeding up due diligence processes. There are also services such as Box and Dropbox Business that offer similar solutions with less emphasis on security and enterprise-level collaboration.
Final thoughts
From data security and protection to board meetings, corporate governance covers many things. One tangible metric of good governance is how well a company takes care of its most important and valued data: financial information, contracts, legal documents, etc.
So, the role of VDR in enterprise-level data sharing is to act as a central hub for various data sharing and management situations. These include internal sharing to power organizational projects and decision-making, external sharing to nurture partner and client relationships, and preparation for a number of compliance and financial audits and due diligence processes regarding every aspect of the enterprise and its operations.
Instant and secure access from any device anywhere in the world via consumer-friendly technology makes data sharing innocuous, and a huge reason why a VDR is such an opportune solution for large companies. Not only can they integrate data on every organizational level but also gain insights that were previously unavailable due to the blocked flow of information. It’s a cost-effective way to improve corporate governance and business operations accelerating processes and minimizing risks. For enterprises that have historically struggled and continue to struggle to take complete control of their data, that’s as good as it gets.
Credit: Data Science Central By: Joydeep Bhattacharya
