The quick answer is: Yes, good environment, health, and safety (EHS) management software can pay for itself. This can happen in many ways, from reducing safety incidents to avoiding regulatory compliance fines and legal fees to fixing inefficiencies that drain resources. A common pitfall, however, is the underutilization of the EHS tools, which in turn inhibits their ROI potential. EHS management software provides practitioners and EHS leaders the opportunity to go beyond surface-level convenience to meaningfully provide company-wide solutions that can streamline and optimize everything from auditing and corrective action workflows to real-time health and safety monitoring.
In this blog, we explore the specific ways EHS software provides both quantitative and qualitative ROI and answer the following:
- In what ways does EHS management software provide ROI
- Downstream Effects of EHS Management Software
- Future Considerations and Tertiary Effects of EHS Software
How EHS Management Software Provides ROI to Organizations
There are several benefits of implementing EHS management software that will come as no surprise – but they shouldn’t be discounted. All these attributes pay dividends on your investment.
Minimize Safety Incidents: Effective EHS management software will decrease the likelihood of accidents and injuries, in turn lowering the organization’s medical costs, time-lost due to injury, legal fees, and workers’ compensation claims. Automating hazard identification and safety incident tracking and reporting allows quicker responses to potential risks. EHS tools can also provide real-time data and analytics, enabling proactive measures to prevent accidents and ensure a safer work environment.
Lower Labor Costs: Automation and standardization of EHS workflows saves time and reduces labor costs associated with a manual process, which can have a considerable positive impact on an organization. It’s also proven that digitizing and streamlining processes can improve employee engagement and retention, which in turn have tangible benefits for companies.
Centralization of EHS Data for Realtime Access: Creating and maintaining a central space for all EHS data allows administrators to assess their data in real-time. These actionable insights can enable organizations to proactively tackle risks such as upcoming training expirations or outdated hazard specifications. Additionally, with centralized data, administrative staff can create reports more efficiently. Centralized data further allows for quick access to critical information, ensuring accurate tracking of risks and compliance without time lost searching through multiple sources.
Reduce Operational Downtime: Many may be surprised at just how time-consuming ineffective EHS processes can be. By improving incident response times and minimizing disruptions, EHS management software reduces overall operational downtime and keeps operations running smoothly. The efficiency gained through faster, more effective responses directly contributes to a more productive and resilient organization.
Downstream Effects of EHS Management Software
Even today, EHS teams can be overlooked by their organizations, either until they look to implement larger enterprise-level change, such as their impact within the space of ESG, or due to severe failures, such as industrial fines, or even human casualty. However, a welcome surprise for organizational leaders is that there are several common downstream effects of implementing EHS management software beyond the obvious ones listed above.
Automated Reduction in Compliance Costs: EHS software can implement automated alerts related to compliance tracking and reporting, ensuring key stakeholders are aware of critical metrics, thereby reducing the likelihood of costly fines and penalties. While this may be one of the key reasons for purchasing tools – it can also change the day-to-day actions and attitudes of staff that interact with the relevant assessment or compliance data.
Proactive vs Reactive Risk Management: While not always the initial primary objective for organizations moving from paper-based systems into digital EHS management, identifying and proactively preventing risk helps to prevent costly incidents and disruptions instead of taking action after an event occurs. A survey by LNS Research revealed that 75% of organizations using EHS software effectively identified operational risks, compared to only 34% of those relying on paper records.
Data-Driven Decision Making: To put it simply; providing real-time analytics and reporting enables better resource allocation and cost-effective strategies for often overstretched EHS teams. Moreover, putting real-time data in the hands of employees that have direct impact upon the numbers being presented on their EHS dashboards increases their engagement with EHS programs – democratizing strategies and improving overall employee engagement.
Facilitates Efficient Regulatory Audits: Another aspect of democratizing EHS is the simplification and efficiency boost seen within auditing processes, reducing the costs associated with preparing for and undergoing regulatory inspections. Users can follow configured workflows for whichever regulation they are being asked to work within – not only saving time from an administrative point of view but preventing astronomical costs by avoiding fines for failing inspections.
Supports Sustainability Goals: While some organizations will know what’s expected of them within ESG, many do not. However, there’s no escaping the inevitable rise of ESG. Whether it’s streamlining compliance tracking, reducing environment or an impact, improving resource efficiency through data-driven insights and automated reporting – organizations many begin their sustainability journey through the implementation of EHS software.
Direct Financial Savings: By bringing in an enterprise level EHS management software platform that also contains capabilities to track, understand, and develop ESG practices, organizations open themselves up to the potential for achieving sustainability targets, potentially unlocking incentives, rebates, or tax benefits.
Future Considerations and Tertiary Effects of EHS Software
If the wealth of potential presented above isn’t enough to convince even the most hard-to-convince CFOs on how EHS management software pays for itself – then there are a few benefits to consider that exist further down the road. These actions may not appear quickly; but when organizations embrace EHS management software, there are several benefits that can have seismic impacts upon company culture:
Boosts Employee Productivity: EHS management software has a direct impact on employees engaging with key business metrics, such as overall number of incidents, near-misses, or successful audits – which, in turn, can enhance employee morale and productivity. Providing a safer, more organized work environment is a powerful factor in making employees feel valued, contributing members of their organization.
Reduces Insurance Premiums: Demonstrating a strong safety record to insurers can potentially help in lowering premiums and other insurance-related costs. Depending on the industry and activities related – showing significant improvement and reduction in safety incidents can be truly transformative from a financial point of view, especially when paired with limiting industrial fines.
Future-Proofs the Business: In the right hands, and configured correctly, EHS management software can help organizations adapt to changing regulations and industry standards, reducing the risk of future non-compliance costs. While difficult to measure – the potential for transformation cannot be understated – and it all begins with simple but effective tweaks to EHS processes.
In summary, EHS management software goes beyond compliance and safety—it’s a smart investment that pays for itself through cost savings, improved efficiency, and risk reduction. By streamlining processes, centralizing data, and enhancing workplace safety, the software boosts operational performance and lowers expenses like fines and insurance premiums.
