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Getting the Most Out of Environment Health and Safety Software

littlefield headshotIt’s always amazing how many large manufacturing companies still don’t use Environment, Health, and Safety Software (EH&S) effectively. It usually doesn’t matter the industry; leading companies across a broad spectrum of industries have big gaps in the use of this software, including: automotive, aerospace and defense, industrial equipment, electronics, oil and gas, chemicals, life sciences, food and beverage, and consumer packaged goods.

Status Quo in Environment Health and Safety Software

Leading companies today are definitely focused on environment, health and safety specifically, and sustainability more broadly, which is a positive. Trends in the industry and established best practices show these companies have incorporated environment, health and safety issues into high level strategic objectives. Executives take issues around employee safety, OSHA compliance, environmental spills and releases, product stewardship, and others very seriously. Often metrics around these areas are built into management compensation and companies have successfully established reporting structures that drive the importance of these issues all the way down to the grassroots of the company, with site-level leaders reporting into responsible corporate managers.

Despite all of these positive trends, the adoption of EH&S remains remarkably low, both in the overall adoption of the software and in the use of the software among those that have already adopted. Many companies, even those an industry observer would assume takes these issues seriously, do much of the heavy lifting required to effectively manage environment, health and safety issues with manual tools. These tools generally include paper based document management for compliance, spread sheets, email, and home-grown data bases, all of which can create inefficiencies, compliance risks, and maintainability nightmares.

Moving the Dial

In situations where manual tools are the norm, the benefits of adopting automated software tools are often immediate and easily documented. However, for EH&S, benefits are less visible, and there are two major challenges we see companies facing today.

First, EH&S significantly reduces the paperwork of current employees, increases visibility, avoids future costs, and reduces the risk profile of the company. Unfortunately, there are not necessarily immediate cost savings in improved operational efficiency or reduced head counts that can be pointed to in a one- or two-year ROI. Rather, changing corporate culture, reducing the OSHA injury frequency rate, and reducing the risk of environmental incident are all benefits enjoyed by companies that adopt EH&S, but the benefits may take five or ten years to be fully realized.

The second challenge is one specific to software in the industrial space and promoting the adoption of technology on the shop floor. For many companies, the actual culture on the shop-floor is not one of safety first; it’s to get the job done. Reducing risk, ensuring OSHA compliance, and documenting adherence to processes is not top-of-mind. In situations like this, it’s important to lead by example. Shop floor supervisors and managers need to be proactive in putting safety first and following standard procedures. They themselves need to use EH&S according to best practices, including consistently using the software to record near misses and other incidents. This level of commitment is necessary to change culture and foster the adoption of EH&S on the shop floor.

Key Take Aways

Many leading companies have an opportunity to move ahead of their competition with the adoption of EH&S. However, a successful deployment often hinges on addressing two key road blocks. First, companies should understand that adopting EH&S is a long-term investment in the company. It’s a tool to help reduce the long-term risk profile of the company and eliminate future costs associated with high rates of environmental and employee incidents. Second, the shop floor is a beast of its own and special attention needs to be paid to the culture of every site and management must lead by example in both attitudes around safety and the use of EH&S.

Matthew Littlefield is president and principal analyst of LNS Research. He covers sustainability, enterprise quality, manufacturing operations, asset performance and industrial automation. Click here for more information on this and other topics.

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2 thoughts on “Getting the Most Out of Environment Health and Safety Software

  1. Well put Matthew. As an EHS software vendor we can definitely attest to the ROI that can be attained from automating EHS processes. When we crunch the numbers with clients and look at the hard dollars that can be saved, there is a clear and long term impact on the bottom line. But as you mention many of the benefits of an EHS system are in the mitigation of corporate risk or damage to brand which is inherently harder to measure. To add to your comment about companies needing to use the software according to best practices and record near misses, if you put any weight on what OSHA is saying it looks like the pressure to put proactive EHS systems in place is only going to increase. It was just a month back when OSHA head Dr. David Michael’s said I2P2 would be a key focus of OSHA’s mandate and “I2P2 would require employers to have an ongoing, investigative, preventative process in place instead of being reactive and addressing problems after an accident occurs.”

  2. Part of the problem with adoption of EHS software is that consultants serving each facility usually control the process. Because of this, a “consultant-centric model” has dominated the field of corporate environmental EHS data management. This is primarily because, as author points out, environmental data is not integral to the daily functioning of a company, and because the quantities and complexities of the data produced are complex and enormous. Therefore, company managers are generally quite comfortable with letting their consultants do all the querying, analysis, reporting…and then storing the data.

    In addition, since the consultants derive increased billing hours from controlling their clients’ data, the ultimate incentive for them is a renewed or extended contract, an outcome that, though certainly not guaranteed, is optimized by their control of the data. It also works for corporate environmental managers (if not the company bottom line). Since corporate environmental departments really do not help, companies make a product or a profit, top management often perceives these departments as cost centers…and even potential liabilities. As a result, they have historically been severely underfunded and understaffed. Department understaffing results in co-dependent relationships between in-house managers and their hired consultants, who end up functioning as the environmental department manager’s “de facto staff,” performing the job assignments normally carried out by regular employees.

    However, there is also an issue with volatility in EHS consulting sector. Environmental Financial Consulting Group (EFCG) recently reported the staggering statistic that in the previous 12 years, 23 (58 percent) of the top 40 environmental consulting firms have gone bankrupt or disappeared, 17 (42 percent) have survived, 33 (84 percent) have undergone a major ownership change, and only 7 (18 percent) remain the same. The volatility in the EHS consulting sector is not just limited to the businesses providing these services. On average, U.S. corporations lose half their customers in five years, half their employees in four, and half their investors in less than one.” (Frederick Reichheld, “The Loyalty Effect”). What happens with institutional knowledge when company’s employees in charge leave or consultants change? Given these statistics, does any company have any other choice but to take full ownership of its own water, air, energy, and other EHS data?

    However, change is coming. The EHS information management practices of corporations and their consultants are undergoing a profound transformation as new cloud-based software provides a low-cost means of making available the critical information that organizational decision makers need not only to better understand and manage their overall environmental and H&S liabilities but also to improve their operations by analyzing the valuable data and in the process lower their operational cost. While companies collect EHS data primarily for compliance reporting, when mined with the right tools, the same data can also be used to point to weaknesses in data gathering and processing operations and provide valuable information on how to eliminate or reduce these.

    A new “company-centric” environmental data management model now offers a remote data repository situated in the “Cloud” and equally accessible in real time to all, including both the customer and its consultants.
    Some companies utilize commercial, client-server database management systems. Others have in-house designed databases, generally built on top of the Microsoft Access relational database management system. Surprisingly, though, the most common tool used to store and report data is the ubiquitous Microsoft Excel spreadsheet.
    Nevertheless, that humble application is giving ground to an emerging “green” software market that, besides EHS compliance management also includes jobs like managing greenhouse gas (GHG) emissions and industrial pollution, air, and water consumption, waste, energy conservation and other regulatory compliance requirements.

    The traditional “consultant-centric” approach to EHS is changing, albeit slowly, under pressure from smart companies and within the industry itself to adapt consulting practices to the new “company centric” or enterprise information processing realities of the Internet age, e.g., Software-as-a-Service (SaaS) and “Cloud” Computing. In summary, we are witnessing the early stage of the transformation from a highly distributed, unconnected, multiple platform silo systems to the centralized, single platform web-based Enterprise Environmental Resource Planning (EERP) systems. And my company, a Silicon Valley pioneer Locus Technologies, is leading this transformation (www.locustec.com).

    In the SaaS delivery model, the software vendor provides access to its software and functions remotely as a Web-based service. SaaS allows organizations to access business functionality at a cost typically less than paying for licensed applications, since SaaS pricing is based on a monthly rental fee. Instead of users buying software and paying for periodic upgrades, their use of a SaaS application is subscription based and all upgrades are provided during the term of the subscription. When the subscription period expires, all a client needs to do is to renew.

    This on-demand service provides measurable economies of scale and cost advantages because the more customers a SaaS vendor has, the less each customer pays for a subscription. This process continuously drives down costs while improving software quality as a SaaS application benefits from the “wisdom of the crowd,” i.e., its many users. When a large “network effect” is present, as is the case with SaaS-based software, the value of a product or service increases as more people use it. This effect, which originally described the rapid spread of telephones, and that has manifested itself more recently in the rapid adoption of social networking sites such as Facebook and LinkedIn, states that the value of a communications network to its users rises exponentially with the number of people connected to it.

    In EHS information management, Cloud Computing puts companies back in charge of their own data while at the same time offering individuals with the appropriate logon privileges unfettered access not only to relevant data, but also to tools needed to analyze these data. If one can find information on something he or she is looking for on the Web in seconds and free, why should one have to pay a consultant to dig into their own data to give them information they already own?

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