How To Back Your EHS Software Pitch With Data

Many organizations are hesitant to invest in health and safety software, either because they view it as an unnecessary cost, believe that current processes are sufficient or are unconvinced of its value. However, maintaining a functional health and safety program is not possible if it remains a labyrinth of communication tools, inefficient paperwork and has no single source of truth or centralized management.  

Justifying EHS software to an audience predisposed against investment is no easy feat. The good news is that with some preparation and research, you can do it. The first step to building your business case is laying a solid foundation of data to support your argument. Let’s take a closer look below.   

Step 1: Identify Areas of Improvement

Research and review your current health and safety processes to highlight the shortcomings of your current practices and show the value EHS software can bring. 

Start by collecting and analyzing historical data from incident reports, audit findings, inspection records, corrective actions and training logs. You may find that pulling this information is time-consuming, fragmented and prone to error if your processes are scattered across spreadsheets or inconsistent reporting formats. Take note of how difficult it is to collect this information and use those inefficiencies as part of your case. Are there any reporting gaps? Is the data incomplete or outdated? These are all areas where safety management software could make a measurable difference. 

Additionally, be sure to connect with individuals from all levels of the workplace. Use interviews, direct observation, surveys and group meetings to collect the necessary input. Collect information about past incidents and take into account feedback about how they could have been prevented or how effective the corrective actions were. 

After a thorough investigation, you should have enough data to identify the frequency, severity and causes of workplace incidents, as well as patterns and areas of concern from past inspection results and instances of non-compliance.   

Step 2: Choose the Right KPIs

Choose the right KPIs to highlight the performance gaps, risk exposure and weaknesses found through your investigation above. Choose both lagging and leading EHS indicators, such as the following: 

• Incident and near miss rate 

• Total recordable incident rate (TRIR)  

• Lost time injury rate (LTIR) 

• Training participation rate 

• Frequency of observed safe or unsafe behaviors 

• On-time action item closure percentage 

• Number of inspections and audits 

• Absenteeism percentage 

• Workers' compensation claims 

• Noncompliance fines 

• Time to close corrective actions 

Step 3: Quantify the Costs of Inaction and the ROI of Safety Software 

Using the KPIs identified above, emphasize the financial consequences of inaction. Leadership is often most persuaded by data that shows cost savings and return on investment (ROI), so calculating the return on investment of EHS software can help make a compelling case.  

The secret here is to make sure you have information on both the direct and indirect costs of workplace injuries and incidents. 

Add Up the Direct and Indirect Costs of Inaction 

Calculate the specific direct and indirect costs of your current health and safety processes to show the financial effects of EHS&S inaction. 

The direct costs of an on-the-job accident are the immediate costs of the incident. These include medical expenses, workers’ compensation payments, costs for legal services, noncompliance penalties and insurance costs. You may have already identified some of these costs in Step 2. 

While direct costs are more visible and often tracked, they represent only a fraction of the overall financial impact. A conservative estimate is that for every $1 spent on direct accident costs, an additional $3 is spent on indirect costs. Some studies even show that indirect workplace incident costs can be 20 times that of direct costs, stemming from the following costs:   

• Loss in earning power  

• Lost productivity  

• Time and expense of recruiting and training a new worker   

• Production losses  

• Equipment replacement 

• Failure to fill orders  

• Overhead   

• Mental health issues, such as PTSD or anxiety, that cause absenteeism or affect productivity 

Calculate the Return on Investment 

The good news is that for every $1 invested in health and safety software, an organization can expect to save $2-$6 in total direct and indirect costs, according to the American Society of Safety Professionals. With proactive insights, streamlined data management and improved reporting capabilities, EHS software helps prevent costly incidents from ever occurring and eliminates the need for costly payouts.  

Calculate an estimate of how much money your organization will save with an investment in EHS software. This will be a strong driving force behind your argument. 

Building the business case for EHS software doesn’t need to be daunting. With the right data, clear insights and a focus on financial outcomes, you can shift the conversation from cost to value and show leadership that investing in safety is investing in the success of the business. 

This is just the start of building your pitch for EHS software. For more information, consult our complete toolkit on How to Build The Business Case.