Rhenus CEO János Krégl: "One could almost say that we are beneficiaries of bureaucracy."
Top Manager in Discussion: János Krégl, CEO of document management company Rhenus Office Systems Hungary Kft.
The hall leased by Rhenus Office Systems Hungary Kft. in the ProLogis Park Budapest-Sziget near Szigetszentmiklós on Csepel Island is filled to the rafters with documents. Nevertheless the impression is one of impeccable order. This is the achievement of János Krégl, the CEO for almost six years. He spoke to The Budapest Times about the service he offers and the challenges facing the document management industry.
When did the document management service first come into being?
It’s relatively modern. The service has existed for around 20 years, essentially since the time that personal computers have been joined by printers on desks, making the printing of documents totally unproblematic. That led to a massive increase in the quantity of documents produced. As a result of the production of printed documents becoming so easy, far less thought is given to what really needs to exist in printed form. Earlier a credit agreement generally consisted of just two typewritten pages with not more than five carbon copies. Today such an agreement is many times more extensive. That has given rise to an incredible increase in bureaucracy, leading to a corresponding rise in the quantity of documents. While documents earlier could comfortably be housed within a company itself and kept in order, that has become impossible or too uneconomical. That created the need for our industry. One could almost say that we are beneficiaries of bureaucracy.
On the other hand the digitisation of documents and avoidance of printing out documents are gaining ground. There is talk of the paperless office. Isn’t the paper form slowly becoming extinct?
No, not at all. There will probably never be a paperless office. There are three main reasons for that. First, people simply prefer the printed form for certain documents for several reasons. Second, judges in Hungary tend to decide on the basis of paper documents in cases of dispute. And finally, if all documents exist only in digitalised form, then compatibility in terms of reader software must always be ensured so that the relevant documents can still be read in 30 or 40 years. It is far from certain, for example, that the PDF format, the most popular format for the digital storage of documents, will still be around in ten or 20 years. It is quite conceivable that the PDF documents of today will no longer be readable then. It is important to ensure that one always receives digitised documents in a readable version. Egyptian papyrus rolls from over 2,000 years ago can still be read today, but documents on diskettes that are not even 20 years old are now unreadable for almost all computer users. But of course we are not Luddites. We also move with the times and digitise certain documents as requested by customers. Sometimes they are stored in parallel with the paper version and sometimes only the digital version is stored.
To what extent does your company still play a role in the digital storage of documents?
Our key service is not the storage of paper documents but that of order, i.e. the systematic storage of documents in whatever form they may be so that they can be accessed quickly when needed. The relevant know-how is important both in the storage of physically existing documents and of digitalised documents. The key factor when digitalising documents is sorting and preparation so that they can be found at a later date. The documents are given meta files for that purpose. The digital documents are given the same archive list as the documents available in paper form, since without that it is very difficult to locate documents when needed within an acceptable timeframe. We can provide information at any given time about all documents stored with us and say where a particular document is located. That is crucial. After all, what use is a basement full of files if you cannot find a necessary document immediately?
Upwards of what quantity of documents does it make sense to turn to your company?
Even in the case of just one document. We do not set a minimum. We have some customers in fact who have just two filing boxes stored with us.
That really isn’t a lot. Surely there is room for two boxes of files in any office. Why do such companies decide to use your services?
The most important reason for these companies and all other companies is security, both in terms of quick availability at any time and protection against loss and misuse. Our security chain is seamless, from storage to the destruction of documents that are no longer needed.
What is the procedure for the destruction of documents?
In compliance with the relevant DIN (German Institute for Standardisation) norms, the destruction of documents is carried out in-house. We ensure and guarantee that documents are fully reduced to a form in which they can never be pieced together to obtain the originals. We use special shredding techniques for that purpose. The paper shreds are then pressed into large balls and delivered to the paper industry as raw materials. We do not burn documents, as people tend to imagine when thinking about their destruction. In addition to absolute security we guarantee a fully environmentally friendly approach.
How is business?
We set up in Hungary at the end of 2005. We have been making a profit for two years now. Currently we employ 21 people. Our storage hall with a ground area of 3,000 square metres and a capacity of 115 document kilometres is 93 per cent full. We can rapidly expand our capacity by leasing further storage room in accordance with the order situation. There is no lack of space here in our business park. Additional capacity in our central storage hall will also be created because we plan to move documents that are rarely or no longer moved into a low-cost storage hall that is being set up. However, we have not been totally unscathed by the economic crisis and we have felt its effects in the past one to two years.
Yet the fact the customers are more cost-aware could certainly have a positive effect on your business. After all you are helping your customers to save money.
Yes, customers save money by turning to us because we relieve them of certain costs. However, such cost benefits are only apparent if customers really take into account the full costs of storing documents. Often they mislead themselves by ignoring some less immediately obvious costs. For example, it is not simply a case of the costs of leasing additional storage space or purchasing filing cabinets, but about questions of security and quick availability, which all have their price. However, we also offer clear cost benefits when it comes to the more evident expenses. With us customers only have to pay for the hire of the exact storage area that they really need for their files. That’s significant because most companies that archive their own documents either have unused storage space, i.e. they have rented space that they are currently not using, or they store more documents than they have capacity for, which is detrimental to order, i.e. to quick availability. We also calculate the movement, scanning and destruction of documents etc. in a transparent way that ensures customers always only pay for those services that they have actually made use of.
Presumably your company also benefits from the fact that there are strict rules on document management at larger international firms.
Yes, exactly. Naturally our industry benefits from that. That also explains why 80 per cent of our partners fall into that category.
What ways do you have of staying profitable in these economically strained times?
For example, by entering new business fields. We now also offer the sorting of documents, including at the customer’s office if requested, and document retrieval. However, it is just as important to make use of existing internal possibilities to cut costs. The creation of the new low-cost storage hall that I mentioned also serves that purpose.
How quickly can customers have physical access to their stored files?
Essentially it functions as though the files were in the building of the customer. Customers can have a full view of their files via the internet at any time. However, they cannot simply go down to the basement and bring up a file. Instead there is a waiting time of two to a maximum of 24 hours depending on the agreement. Within that time the customer is presented with the desired document by a Rhenus employee and using a Rhenus vehicle. Both are very important to us because discretion and trust are among the basic principles of our business model. We have deliberately refrained from using external service-providers for getting documents to customers simply because it would be cheaper. It is also important in terms of security that while customers can request documents in spoken form, the documents will only be released by us in exchange for a written document.
What kinds of documents do customers tend to store with you with a view to potential use?
That differs greatly. We have customers with around 150 document movements daily. However, there are also groups of files that are barely touched any more. The problem generally is that it is never possible to say at the current time whether and if a document will become important again in the course of its life. As a rule all documents stored with us contain something that speaks in favour of their being preserved. Generally my experience is that in cases of doubt customers prefer to keep documents than to discard them.
Do you also advise your customers about what it is worth storing and for how long?
Essentially we store everything for the time periods prescribed by law. In the case of documents for which there are no such requirements we advise our customers. Naturally where we can help them to save costs by advising them against the storage of unnecessary documents we do so. In addition we give them a precise list each year of documents that can be destroyed because the mandatory time periods for their storage have expired. It is very important that every destruction of a document is documented in writing and takes place with the full agreement of the customer. As a result of destroying documents, essentially a large quantity of paper is reduced to an insignificant quantity of destruction protocols. We think long-term. We want to gain by having satisfied customers rather than by artificially raising the quantities of documents stored. Our partners can rest assured that on our part we will not store more files than absolutely necessary.
