What is the Return on Investment for purchasing a Health and Safety SAAS software solution?
Hint: It’s not just productivity enhancements
As I talk to dozens of companies across the globe, the discussion eventually turns to the value proposition. One of the challenges of getting a Quality Health Safety and Environment (QHSE) transformation initiative launched is helping the executive team understand the return on investment and the size of their enterprise risk exposure.
Here is what I have discovered to be the actual return on investing in an enterprise-grade QHSE Solution
1) Reduce Enterprise Risk: What is the exposure to fines, lawsuits, potential negligence claim events from having a suboptimal system? What is the cost to your brand when a negative PR event hits due to an incident making it into the news? Companies have millions of dollars of exposure and are too often attempting to manage it using technology from the 1980’s. Although Michael Jackson’s Thriller was a hit during the 1980’s you want your health and safety program to be as uneventful and predictable as possible.
Jim Haried, EHS Today
A well-designed sustainability and EHS management system that evinces a corporate culture committed to compliance may mitigate penalties in the event of an incident.
2) Reduction of safety incidents: The National Safety Council estimates that an average work related injury results in an average loss of $38,000 including wages, productivity loss and medical expenses. How many incidents does your company have per year and what are their average costs? What if injuries and accidents were reduced by just 5%? What if you could use predictive analytics to highlight where next safety events are most likely to occur, rather than always being in reactive mode?
Lost productivity from injuries and illnesses costs US companies $60 billion each year.
3) Opportunity for reduction of insurance premiums: Reduction of enterprise risk allows for negotiation of lower insurance premium. What if your company was able to reduce insurance premiums by just 5%?
Jeerd Hendel-Brackford, Enhesa
If a site or company has exemplary performance, it will go down. It is not rocket science! An investment in EHS is an added insurance policy and will keep your insurance policy costs down.
4) Lower Total Cost of ownership using a SAAS product: Once you calculate the cost of acquisition, implementation and maintenance/ support, a managed SAAS solution has proven to provide better value than both an on-premise solution or an IT internally made from scratch solutions.
5) Productivity enhancements: Yes, there are productivity enhancements from reducing the paper burden and manual processes. The time for a safety professionals to print out and scan paper forms, manual email follow-up, wrestling with excel documents and rolling up never ending metrics into powerpoint can be excruciating.
Often the business leads with productively enhancements in their value propositions presentations. Companies will create advanced spreadsheets showing savings modeling something like: Savings = $2.6 Million (2 hour per week *52 weeks * $100 * 250 employees)
However the reality is that productivity enhancements end up being an unquantifiable soft cost. Most companies do not end up reducing headcount as the result of the QHSE software transformation initiative.
The prime value in making the investment is in reducing enterprise risk, lowering the likelihood of safety events, driving down insurance premiums and lowering IT burden.