Information is power. And if you want to stay ahead and maintain efficiency, it’s essential that you hold sensitive data close to your chest to give yourself an edge against your competitors. However, there are plenty of instances when you might need to share this information with other business. How do you maintain confidentiality in these instances, while limiting the restrictions that other businesses have?
If you’re involved in a merger and acquisition (M&A), this is a question you’ll have to answer to make the transaction run smoothly. In the past, companies would arrange to have representatives meet in pre-determined locations to present and discuss confidential business files. These were known as ‘data rooms’ and they would serve buyers and sellers during the M&A process.
Since the advent of cloud computing and online sharing, a more efficient alternative has all but replaced the physical meeting location. Virtual data rooms (VDRs) are arguably more cost-effective, convenient and secure, but how do they work?
A VDR is basically an online repository for information that’s accessed using a secure extranet connection. Specialist companies like Imprima can be hired to provide secure data rooms that your business can use during a confidential transaction. The VDR has strict security controls placed upon it to keep all sensitive information safe; the room can be set up to deny the ability to forward, print and copy documents too.
The best thing about this technology is that it’s incredibly intuitive and easy to use. Minimal training is required and the drawbacks of the convention physical data room are a thing of the past. Buyers and sellers can avoid sending potentially insecure emails and don’t have to travel around the world to negotiate. The confidential information can be made accessible all day and to businesses in different time zones. All they have to do is log in to the VDR using the secure password they have been provided with.
If the VDR is made accessible, it’s important that your confidential documents are hosted in relevant legal jurisdictions and covered by the respective data protection laws. ICO has an invaluable guidance index that can help answer any questions you have.