Virtual Data Rooms | Understanding Virtual Data Rooms

A virtual data room (or "dealroom") is an online repository of information that is used for the storing and distribution of documents. In many cases, a virtual data room is used to facilitate the due diligence process during an M&A transaction or loan syndication. This due diligence process has traditionally used a physical data room to accomplish the disclosure of documents. For reasons of cost, efficiency and security, virtual data rooms have widely replaced the more traditional physical data room.

An alternative to the physical data room involves the setting up of a virtual data room in the form of an extranet to which the bidders and their advisers are given access via the internet. An extranet is essentially an Internet site with limited controlled access, using a secure log-on supplied by the vendor /authority, which can be disabled at any time, by the vendor/authority if a bidder withdraws. Much of the information released is confidential and restrictions are applied to the viewer’s ability to release this to third parties (by means of forwarding, copying or printing). This can be effectively applied to protect the data using Digital Rights Management.

In the process of Mergers & Acquisitions, the data room is set up as part of the central repository of data relating to companies or divisions being acquired or sold. The data room enables the interested parties to view information relating to the business in a controlled environment. Confidentiality is paramount and strict controls for viewing, copying and printing are imposed. Conventionally this is achieved by establishing a supervised, physical data room in secure premises with controlled access. In most cases, with physical data room, only one bidder team can access the room at a time. This becomes time consuming.

A Virtual Data Room has exactly the same strengths as a conventional Data Room viz controlling access, viewing, copying and printing as well as setting time limits on viewing and logging. It has none of the disadvantages of being in a standard location, needing couriers to move documents or transporting of key staff and personnel back and forth. It is also accessible 24/7 over the allowed period. With a Virtual Data Room, documents reach the regulators and investors in a more efficient and timely manner. Due to improvements in efficiency and speed, a Virtual Data Room typically pays for itself in a single M&A transaction.

A Virtual Data Room is quick to set up. Scanned data and existing electronic files can be mixed, information can be added or eliminated at any time (the changes could be logged if required) and any or all information can be restricted to any or all registered viewers at any time.

Virtual Data Room and Virtual Assistance

Well, this is undoubtedly true that virtual data room or virtual assistance these kind of services are making your business easier and making your business more efficient. Previously you were only able to provide service to your customer only at the time when your office employees were at your office.

But right now you can provide your service through out the clock. Because you are outsourcing your business. When you are sleeping at that time the other part of the world are in full swing and they are doing their duty to provide the full satisfactory service to your customers. You are outsourcing your job also with low payment. So, you are increasing efficiency and also making a lot of profit by spending less money on that project.

But now the question comes whether this virtual assistance kind of thing is secured or this has a threat to your business or the personal data? Well from my experience, i will tell you that this is not 100% percent secured and there is always a chance to get your data leaked. If the companies are dealing with the data which is very much confidential then it is not that easy to tell that the data is secured in the hand of third party.

I want to share one experience which i had read in a newspaper. The story is about one third party company who used to deal with the data from financial institution. The company used to call all the clients who are having loans or having other issues. So, in that company a lot of personal and confidential data were stored. Like bank account numbers or residential address etc.

So, what is the story? The story is a person managed to get one persons all bank details from his girlfriend who used to work in that third party company who were dealing with the data. Then the person changed the address of that person and sent one notice to bank about changing the address. As the bank account was active for a long time the person choose that account.

Also able to manage one credit card in the new address and used all the money which was in that account. So, this is the way through which your confidential data gets leaked.

Also virtual assistance is not that much efficient. The assistance like call center or customer service , if this kind of thing gets outsourced then the third party company does not concentrate that much on your business. Last week i made a call to Paypal as i was having issue with my account name. One Indian caller agent handled my call and told me that he will call me back after 30 minutes with the solution but i waited for 30 minutes but still no call from their side. So, this is a process to skip the problematic all or to avoid call for which he does not have any solution.
So, i want to conclude with the sentence that though the virtual data room or virtual assistance is increasing our efficiency  also they are making our personal data more open to the world. So, we need to be very cautious while selecting one third party service.