How much time would it take to cross-check thousands of pages for compliance or regulatory requirements? If you do it manually, it will take significant human and financial resources, and still, there will be chances of error. On the other hand, what if you could have AI-backed data management software that could do the job in a matter of minutes?
It is now possible to scan and cross-check hundreds and thousands of documents within no time — thanks to virtual data rooms.
Many believe that digital data room software is just a document repository for storing or sharing digital information. However, in reality, data rooms are state-of-art business solutions that make data management, data analysis, and deal-making much simpler. Here is a detailed guide on data room software, its benefits, and the role of artificial intelligence in VDR technology.
What are virtual data rooms?
Virtual or digital data rooms are cloud-based solutions that businesses, professionals, nonprofit organizations, litigators, dealmakers, corporate boards, and even public institutions use for:
- Data management
- Digital communication or collaboration
- Project or deal management
Data management
Virtual data rooms are equipped to do anything that you can think about data management. You can use this solution to store, distribute, exchange, organize, or share tons of information with a large number of users with maximum ease. Data rooms have all the built-in tools for viewing and editing Word, PDF, and Excel files, and unlike emails or free tools, you can upload and share files up to 500MB or even 1 GB.
Virtual collaboration
In addition to a wide range of information management tools, a digital data room gives you the option to keep internal and external communication in one place. Using a data room allows you to manage meetings, Q&A sessions in financial transactions, and group or one-to-one communication.
Deal management
A high percentage of virtual data room consumption goes to deal management. Dealmakers use data management and communication tools to conduct financial transactions like IPOs, real estate trades, asset sale and purchase, fundraising, and mergers and acquisitions digitally.
Some first-rate virtual data room services for deal-making include iDeals, Intralinks, ShareVault, Caplinked, Ansarada, and Merrill.
The role of artificial intelligence in virtual data rooms
“Virtual data rooms today are way more powerful than ever. We have impeccable security systems, AI-backed tools for data management, and the communication is simply flawless,” says Ronald Hernandez, Founder of dataroom-providers.org.
Following are some AI-backed features (and their benefits) of digital dataroom software.
Better data organization
Virtual data rooms give you the option to upload and categorize the data manually or let AI do the job for you. For example, you can create folders or subfolders the way you want, or the documents uploaded in the VDR can be automatically categorized based on the content type.
What’s more, the automatic index numbering feature automatically allocates numbers to all the documents uploaded or moved into the VDR. It also automatically prepares an index list making it easier for the users to find any document. If you delete any file, the index numbers will update automatically.
Full-text search is another AI feature in the data rooms that makes it possible to find any document, even if you don’t know the file title. All you have to do is enter a keyword or phrase, and OCR (optical character recognition) system searches that keyword or sentence in the data stored in your VDR.
Data analytics
Many notable virtual data rooms come with advanced data analytics features. For example, you, as the data room administrator, can track all user activities. You can generate reports on users individually and see how much time they spent on a file, which files they opened, when they logged in, and how much time they spent in the data room.
These analytics are super useful during deal-making. For instance, a seller in an M&A transaction can assess the individual buyers’ areas of interest and restructure the documents according to that.
If a buyer is more interested in viewing profit and loss statements, the seller can create a new folder and upload all P&L statements in one place. What’s more, the data room also gives suggestions to the buyers according to their areas of interest. They can also assess if a buyer is serious about the transaction or not.
AI and future possibilities
Besides unprecedented advancements in virtual data room communication features, service providers are keen on introducing AI to improve the Q&A feature in VDRs. Managing Q&As in business transactions is a burdensome task for VDR administrators.
However, that day is not far when dealmakers will be able to automate the Q&A phase with the help of AI chatbots like Siri. These chatbots will be able to provide accurate and real-time self-generated responses, minimizing the human effort needed in Q&As.
Summing it up
Modern-day digital data rooms are more powerful because of the introduction of AI in VDR technology. They can organize or categorize files based on content type, make the file searching process faster, and provide insights to understand buyer behavior in a better way.
