What is external file sharing? (2024)

Nearly everyone is familiar with the concept of file sharing. But did you know that businesses have different file sharing needs especially when it comes to external file sharing.

What is external file sharing? External file sharing occurs when organizations give external stakeholders—customers, partners, suppliers, regulators—access to, or transfer, digital files and documents. This type of file sharing typically occurs as part of larger, business-critical external collaborations.

We can see this when we look at typical examples of external file sharing:

• Service Delivery: Files are exchanged between an organization and their external partners, contractors, or clients during the planning, execution, and review phases of projects. This includes sharing project plans, design documents, progress reports, and feedback.

• Contract Negotiation: Businesses often share contracts, proposals, bids, and agreements (including NDAs or CDAs) with potential clients, partners, or suppliers during the negotiation or bidding process.

• Audit & Compliance: Companies need to share files with regulatory bodies or independent auditors for compliance purposes, including financial reports, compliance documents, audit results, and other required filings.

• Vendor and Supplier Management: Files are shared throughout each phase of the vendor management lifecycle. Examples include RFx (RFI, RFP, RFQ) packages, onboarding documents, operations and review reports.

• Financial Transactions & Accounting Documents: Sharing financial documents, such as invoices, receipts, bank statements, and tax documents, with external accountants, auditors, financial institutions, or tax agencies.

• Legal Proceedings & Matters: Exchanging legal documents with external legal counsel, courts, or other parties involved in legal actions or disputes.

• Presales Delivery: In B2B sales especially, this would include sharing sales and marketing content, along with customer engagement materials (e.g., go-live plans, demo requirements, PoC documentation) with potential customers.

Critical Capabilities for External File Sharing Platforms

When we consider the critical capabilities for external file sharing platforms, maintaining security and confidentiality takes center stage. The reason, as we pointed out above, is that external file sharing is frequently performed in the context of a business critical collaboration with another organization. These external collaborations are sensitive so ensuring that the files being shared are protected and private is important.

With that in mind, the critical capabilities for external collaboration would include the following a fair number of security and confidentiality protecting measures:

• Participant Management/Verification: It’s important to manage who has access to the files and verify their identity.
• Role Definition: Assign specific roles to users, enabling contributions from some while restricting others to view-only access.
• Information Compartmentalization: Segregate sensitive information to prevent unauthorized access. Interestingly enough, the use of a file-sharing tool, in and of itself, is a form of isolation if the file sharing platform is separate from the organization’s file management system (either local or cloud, e.g., Microsoft OneDrive or Google Drive).

• Ephemeral Storage: Mechanisms for content to expire or be securely deleted post-usage. The reality is that most external file sharing is done in the context of a business transaction. Once the transaction is complete the content should be removed and archived.
• Support for Document Retention and Archiving: Prepare for the secure retention or archiving of documents as per regulatory and business requirements. The file sharing platform should not permanent storage.
• Audit Trails: Maintain a full history of the files shared (and any new versions) if updates were made.
• Version Control: In the case of bidirectional file sharing (most filesharing is unidirectional) version control becomes quite important. Especially if the file sharing is being performed in conjunction with document collaboration.
• Integrated Communication Tools: Enable discussions around shared files to clarify, coordinate, and enhance collaboration. While everyone has access to a wide array of communication tools, being able to chat/message about the files where the files are is very useful.

Why you should consider external collaboration software for external file sharing

When we look at when organizations engage in external file sharing, what we observe is that they’re almost always in the context or part of a larger external collaboration.

Those capabilities would include, the ability to:

• Collect documents from the other team
• Exchange revisions (and manage versions) of those documents being shared
• Request actions, such as the review of a document
• Communicate/chat in the context of the collaboration, and finally,
• track everything for audit, control, or project management purposes

External collaboration tools can serve as a centralized hub for managing all aspects of collaboration efficiently and securely. Beyond mere file sharing, these platforms facilitate streamlined workflows, enhance communication, and offer comprehensive project oversight. By choosing an external collaboration tool, organizations can ensure that every facet of their collaborative efforts—from initial document exchange to final project completion—is executed with precision, security, and ease, making these tools an indispensable asset for any business engaged in external collaboration.