Pros and Cons of Virtual Data Rooms

The advantages of data room software are saving labor and material resources and significantly reducing the time spent creating, storing, and processing business documents. But is everything so good and economical in virtual technologies? Learn from the article about the pros and cons of data room solutions.

Why is a data room a valuable tool for business?

No matter how we get used to working with paper, the realities of our life force us to delve into the intricacies of virtual technology. One of the elements of such technologies is electronic document management which is widely used in business collaboration. The virtual data room is designed to automate work related to creating and approving contractual documents and visual control of the approval process. The system’s main purpose is to automate the work on the preparation and approval of contracts, acceleration of the approval process, and provide employees with complete information about the status of the approval process. In this case, the contract can be created by employees of the organization or received from the counterparty.

The data room vendors ensure many valuable pros for modern companies:

    • Remote work with documents: on vacation, business trip, sick leave. The data room service is available 24 hours a day, and the mobile application makes the work even more convenient and fast. Such systems contain templates for most personnel documents, and their relevance is automatically ensured.
    • The status of each document is tracked in real-time. The responsible employee needs to know who is working on the document. The system shows who and when opened and edited the document and who delayed it. It increases the effectiveness of management control over business processes and improves the discipline of employees.
    • Reducing the human factor. The ability to generate and process electronic documents in the data room allows not only to reduce labor costs but also to avoid errors at all stages of creating and processing documents. The program will not allow you to make a mistake or immediately identify it.

Data room cons

Modern IT companies that implement electronic data room systems conduct surveys to determine the consumer loyalty index (Net Promoter Score) among their customers. From this, we can see that the introduction of the data room in some cases, contrary to the fears of some managers, does not change the usual work of the company. Data room management’s potential shortcomings are solved easily and do not complicate business processes.

For example, among the minuses are such problems of transition to data room platform:

      • It is necessary to develop regulations for working with the system and making changes to the accounting policy. But these documents are typical, so working with them will not take much time.
      • Its timely update will require a competent employee to maintain the system; technical software support solves most technical issues. It works around the clock.
      • You will have to manually configure roaming to interact with counterparties using another data room vendor. But more and more operators are connecting to automatic roaming with the software. So to work with counterparties, you only need to send an invitation.
      • After implementing the system (in the process of maintaining electronic document management), constant monitoring of the implementation of established regulations and rules, software updates, etc., is required.

However, electronic document management’s disadvantages will not prevent a business from fully automating work processes and abandoning paper office work.

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