The use of virtual data rooms has taken much of the personal interaction out of the deal process. Far from reducing effective communication between parties, however, this gives data room providers the chance to improve it.
The world revolves around communication, and in the context of mergers and acquisitions and other high-profile business deals it can make or break the success of the initiative. You don’t have time for lengthy discussions and any errors in communication can be a costly experience, or lead to non-compliance with required protocols.
By making use of system features you can reduce the need for emails, phone calls and other basic communications and replace them with automated, streamlined procedures such as:
Most reputable virtual data rooms offer a question and answer feature that mirrors the workflow of a similar physical process that facilitates organised interaction between the various parties. Buyers and sellers can ask questions about specific documents, which are relayed to team leaders for review before submission. This prevents irrelevant questions getting though and saves time-wasting on both sides of the deal.
The flexibility of the feature allows you to reply to more than one question at a time and notify users of answers using email. You can link existing documents in the virtual data room to a particular reply, and export the full list of questions and corresponding answers to an Excel file. This enables you to easily gather the information you need when you’re preparing reports or management documentation.
Keeping abreast of developments is vitally important during sensitive negotiations and a quality virtual data room provider knows this. Real time notifications keep all parties up to speed on the status of the deal:
- Alerts generated by the system can notify you each time a question is asked or answered or a new document is uploaded to the virtual data room. This eliminates delays in answering queries, and ensures everyone has immediate access to documentation for review.
- Daily and weekly updates are available to keep all participants informed about uploaded documents and changes in status.
Users can set up personal viewing preferences such as recent uploads, a given date range or unread documents only.
3) Compliance Readiness
The importance of compliance in business deals simply can’t be overstated. It’s critical to have a traceable record of all interactions relating to documents, because in the event of a dispute either party may be required to provide evidence of questions asked and answers given. While virtual data room support tickets also offer this type of compliance, the process is lengthy and awkward and can involve multiple attempts before the right answer is received. A comprehensive Q&A module is easy to download as a user-friendly report, which can be retained for record-keeping purposes to comply with the legal requirements of the deal.
These are just some of the ways in which virtual data rooms can improve deal communication, facilitate legal compliance and save participants time and money. The secret to selecting the right service is having a clear understanding of the features offered by the vendor, the resources and capabilities of the project team and the services included in the virtual data room sales agreement.