In a move meant cut costs and to reduce the working time, many companies have turned to Virtual Data Rooms (VDRs) in order to allow many employees simultaneous access to confidential information and to enable centralized version control. Nevertheless, no technology is free of drawbacks. The VDR’s are no exception. The following are some of the challenges that are facing the usage of VDR’s today.
- Virtual Mistakes and Errors
It is impossible to review vast bulks of electronic material for long time periods. Viewing a computer for prolonged times leads to eye, neck, fatigue, back pains and other physical problems. As a result, associates make some mistakes when going through online electronic materials. It occurs mostly when reviewing bulk materials for prolonged times in front of a computer under tight deadlines. The cost that comes from making these errors greatly overweigh the designed cost-saving nature of VDRs.
The other mistake that commonly occurs is the omission of some files while uploading the files to VDRs. As a result, there are hard copies of certain information that could be present in the office and are not available to other workers online. It therefore, becomes difficult to perform certain tasks to the level best as there is missing information.
In the world today, most companies, especially large ones, are mostly interested in ensuring that their information remains private and confidential. After all, information is power. For this reason, they employ large sums of money into ensuring that their information remains confidential. The emergence of VDRs has posed a significant threat to the security of data. The reason behind this is:
*The VDR service providers have access companies’ information as they have to scan and upload the companies’ data.
*Potential buyers are given access information before the deal is completed.
The result of this is that more people have a lot of access to information technology that is considered private. Security concerns associated with sharing a company’s sensitive information with a single potential buyer becomes multiplied by the number of potential customers becomes increased. These security concerns include spying, misuse of shared information, threats and so on.
There is also no guarantee that potential buyers will not leak the information shared by competitors. The result of such an act could be damaging to the seller
3.Access to Non-digital Information.
VDRs make it impossible for buyers to obtain non digitalized information such as product samples. It becomes problematic especially where boarders are involved. The buyer is, therefore, forced to travel to the seller or the seller obliged to post the product, which leads to additional costs.
4.Costly to the buyer
In contrast to PDRs, buyers have to print and copy their work. In a VDR, most of the documents and information are outsourced to the buyer online who incurs an additional cost when copying and printing, these pose minor barriers in Mergers and acquisitions. Local customers tend to bear the highest incremental increase in terms of cost.
Compared to PDRs, buyers using VDRs take more time compared to read the documents. The physical review of documents is faster compared to online viewing. People using VDRs, therefore, end up spending more time in the long run compared to people who opt for PDR.