The statement “Have a look in the data room, it’s all in there” can bring a cold sweat to many an engineer undertaking a due diligence review. How many of you, during a due diligence, recall being given FTP access to a data room that is full of highly disorganized folders and sub-folders, files with cryptic names, different updates of the same file in different folders?
It can be like looking for a needle in a haystack.
It can be difficult to determine which files are actually important and still relevant and which files have been simply dumped into the room. There is nothing worse than spending a day reviewing an Excel model only to find out that it wasn’t the latest version and a different un-related folder has the correct version.
Data rooms are generally created for due diligence exercises or during advanced engineering. Regardless of the purpose, it is helpful for all involved to have some type of a document control person who understands what is in the data room, what is important, and what is non-essential.
Large projects may often have an dedicated document control person to manage the data room. However smaller companies in a due diligence phase may tend to dump all the electronic files they have into the data room, including email transcripts, and sort them into different folders hopefully.
It’s still up to the user to dig through the files to find what they need. This can be a time consuming task, costing everyone money in wasted time.
Some type of organization to the data room is key
Comprehensive searchable document management systems such as Ansarada, Aconex, SharePoint, and others are available. They can be pricey and will require a team mindset to organize and catalog the information put into them. However a properly implemented system can make it easier to search for files, keywords, and the latest versions of files. “Properly implemented” means that the entire team takes time when putting information in to ensure it is properly tagged. However even such systems can become repositories for hundreds or thousands of files.
When using a cloud-based data room or FTP site, try to select one that allows bulk downloading of documents rather than only allowing one file at a time.
Some data rooms, for security and tracking purposes, require users to be online in order to open a document, even documents downloaded onto your computer. This makes it difficult to work when one doesn’t have internet access.
Some data rooms limit the cut & pasting ability of the documents. This can make it difficult to prepare your findings report and you wish to include copied images from the report.