Data room software is a highly familiar term in the business fraternity nowadays. People know virtual data room technology for its remarkable services in the financial sector, dealmaking, healthcare industry, nonprofits, and other segment of the business world.
However, the cost-effectiveness of virtual data rooms is one of the least discussed factors. Apart from the highest levels of digital security and sublime automation of multiple administrative processes, hiring data room services can help businesses save thousands of dollars every year.
Here is a brief introduction to data room software, how it helps save money, and common virtual data room pricing methods followed by data room vendors.
What is online data room software?
Online data room software is a digital, cloud-based document management platform commonly used for sharing, storing, and managing data in financial transactions including real estate trades, mergers, and acquisitions, initial public offerings, fundraising, and loan syndication.
Apart from financial transactions, virtual data room software acts as a data storage platform for small businesses, nonprofit organizations, law firms, real estate managers, hospitals, and schools.
What's more, data rooms are highly used virtual collaboration platforms for corporate boards and business teams. They boast all current-day communication tools for online meetings, Q&As, group communication, and individual messaging.
Virtual data room pricing — everything you need to know
Data room pricing is a crucial part of data room comparison; a clear understanding of how VDR pricing works can help businesses save money. Here are a few data room pricing methods used:
Per-page pricing: A quite expensive option for high volumes of data storage as customers have to pay for every page uploaded in the VDR.
Per-user pricing: suitable for small teams because the vendor charges for every user added to the data room.
Fixed monthly charges: A highly common and cost-effective method for long-term usage and complex M&A deals.
You can read about virtual data room pricing methods, average costs related to different pricing models, and other crucial VDR pricing elements here: https://datarooms.org.uk/virtual-data-room-pricing/.
How do virtual data rooms help save money in the long run?
Data rooms are cost-saving options, but it is essential to know that it only happens if you are aware of how data room pricing works (discussed below) and employing the best data rooms in the market. Here are some major expenses you can minimize using a data room.
Paper and printing expenses
The average price of printer paper in the US is two cents which may vary from state to state. Two cents is not a considerable figure, but your reaction might change after knowing that an average office worker in the US consumes 10,000 papers every year.
Imagine the net figure when you multiply this number by the total number of employees in your company. Remember, printing expenses and other associated costs like distribution expenses aren’t accounted for yet.
Virtual data rooms are paperless data management solutions. Businesses can create virtual workspaces using data rooms where employees can use, access, and share digital documents anytime. It will greatly reduce the need for paper files.
Labor and storage costs
The problem with paper documentation is that a company not only has to bear paper costs and associated expenses, but they need to consider the labor costs of an in-house file manager. The average labor cost of an in-house file manager is $30,000 a year.
Moreover, paper documents need physical space. A business must have a dedicated physical data room where it can store all the documents. Extra space means extra expenses.
On the contrary, using data room software ensures that you can minimize or even eliminate the above-mentioned expenses.
Did you know that 1/4th of small businesses lose between $20,000 to $40,000 due to one hour of downtime? Downtime typically results in decreased employee activity, business disruptions, and hurdles in revenue generation.
Most importantly, downtime also makes the data management system vulnerable to data breaches, and the company may lose its private information. Not to mention, a data breach can lead to legal consequences and penalties.
Hiring reliable virtual data room providers like iDeals, Ansarada, Merrill Datasite, etc., can significantly reduce these risks as high-end VDRs have 99.5% uptime.
In-house IT department costs
Setting up an in-house IT department is an expensive venture, but it is mandatory if a business uses in-house or custom-made software. Even if a company only hires an IT support employee, it can expect to pay somewhere between $60,000 to $150,000 on a yearly basis.
Virtual data rooms give businesses the luxury to manage their data with minimal or no support from IT experts. The data room customer support service not only helps set up the data room but they provide training and instance assistance in resolving any technical or nontechnical issues.
Data room software is not only a secure and efficient data management tool, but it is highly cost-effective as well. By using a virtual data room, businesses can reduce paper and printing costs, file manager labor costs, data software downtime costs, and in-house IT support costs.