When you’re choosing a data room provider, making an extra effort to avoid five common mistakes will save you work down the line. It can also prevent financial losses and avoid compromising the integrity of your data. There’s risk involved in everything you do in business. Some risks can be mitigated more easily than others, and doing your due diligence when choosing your provider will minimize some potential problems.
Mistake #1: Thinking Price is Everything
Choosing the lowest price doesn’t mean you’ll get the best product or service. In fact, it usually means the opposite. It’s not that there aren’t data room providers in existence offering better rates than others. The risk lies in making price your primary criterion .The risk of overlooking hidden costs is a significant one. Unless you’re well-versed in the services offered by data room providers, you could miss the absence of issues such as:
- Technical support and training for staff
- After-hours Support
- Project management assistance
If you have to pay extra for any of these options, that low price could end up being not so low, after all! and You run the risk of being forced into choosing between unacceptably high pricing or migrating your precious data yet again, with all the risks and inconvenience of doing so.
Mistake #2: Overlooking Reputation & Stability
When it comes to background research, most people consider their work finished once they have checked the references of the company they are about to appoint. However it is also essential to know whether the potential virtual data room provider has strong corporate backing. The two additional steps you should take are to verify that the vendor is insured for risks, and to ascertain the company’s financial stability. This gives you reassurance that if your project extends beyond the expected completion date, you won’t find yourself in the unfortunate situation of having to change service providers at short notice.
Mistake #3: Skipping the Pilot
A test run of your chosen data room provider’s platform is vital before committing to a long-term relationship. Even if everything works perfectly during the demo, insist on a trial period. Whether it’s a free trial or a paid pilot project, know what you’re getting into before you sign the contract. Get a feel of the platform’s speed, functions and capabilities, its interactivity and ease of use. There’s nothing more frustrating than finalizing a deal to find that it doesn’t perform as expected.
Mistake #4: Foregoing Feedback
So you’ve found a data room provider who seems right for your company. You’ve seen the demo, done the trial and tested the services. You’re not ready to sign until you’ve obtained references from other existing clients, though. Just because you’ve used your preferred data room provider previously doesn’t mean you should skip this step. The “evil you know” thinking is as bad as the “we’ve always done it this way” thinking. It’s a new world and a new way, and your old service provider might have old, slow legacy systems and platforms. Get references. Phone them and ask for feedback personally before you decide.
Mistake #5: Underestimating Security Risks
In the age of hackers and compromised data security, your first thought when choosing a data room provider might be access control and virus protection. But that’s not the only security you need, a lesson Superstorm Sandy just taught the American business environment again. Infrastructure security includes the ability to withstand natural disasters as well as other risks, and having the necessary disaster recovery and business continuity plans in place to recover when one hits. With climate change precipitating a variety of interesting natural events, don’t think that just because it hasn’t happened before in your region that it never will.
To find the right data room provider for your business, look for vendors who have well-established track records, offer trial periods or pilot projects and detailed service level agreements. Conduct the due diligence necessary to make sure you don’t fall victim to any of these common mistakes.
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