The foundation of a strong safety culture begins with the commitment to invest in the necessary tools, time, and resources to unify the workforce around preventing incidents and adherence to quality standards. Leadership endorsement is essential for this initiative to take root. Too often though, the cost of investing in tools to help create this safer work environment is met with skepticism amongst other priorities and budget constraints. The results are too often to "maintain the status quo", which is usually the most expensive course of action for a business.
To avoid this "do nothing" scenario, often the best and fastest path to securing executive buy-in regarding safety software like SafetyAmp is a compelling return on investment (ROI). This paper summarizes the basic steps to calculating an ROI in an EHS environment utilizing the SafetyAmp platform.
We are confident that a SafetyAmp ROI for any business with EHS requirements will produce extremely compelling results.
Quantifying the ROI on any modern workplace health & safety management software platform is straightforward in the context of what set of variables to consider as to the cost savings. The difficulty lies in making baseline assumptions savings of the environment before and after the introduction of SafetyAmp software. The basic variables to be considered are:
Reduction in the number of incidents and the associated costs for lost work hours, property damage, insurance premiums, medical claims and fines.
Productivity gains via hours saved by the use of a highly configurable, scalable platform that reduces time spent on configuring apps, conducting audits, following up on action items, tracking training certificates, and interpreting data.
These assumptions vary by specific company, industry, size, and complexity of business, as well as current workflow processes. These variables also vary based on where the organization is starting from today: Paper process? Excel? A legacy software solution?
The data shown in the attached model is based on a use case of a 1000 person /5 site customer using SafetyAmp.
The actual ROI is a simple calculation: (Cost Savings – Investment Cost) / Investment Cost.
The Investment Cost is a fairly straightforward calculation and is simply the cost of licensing and onboarding the software, as well as any migration costs. SafetyAmp's architecture enables quick onboarding and simple migration of data.
The Cost Savings is a more complex analysis and requires a variety of assumptions. Variables to include in any cost savings analysis of EHS software include:
SafetyAmp helps companies simplify, standardize and control the incident reporting process, across all locations. It is highly configurable to meet specific requirements. It facilitates exporting compliance reports like OSHA 300, 300A, 301. It enables root-cause analysis and identifies corrective and preventative actions.
In general, better incident management will result in fewer incidents, which in turn will reduce the total costs associated with incidents.
Areas of savings within Incident management include:
Management hours saved: Using SafetyAmp's software platform for incident management will save a material portion of management's time, allowing them to work on higher value projects. The Management savings associated with these reduced hours spent on from incident management = (average hourly wage of management) * (estimated # of hours saved).
Worker hours saved: Even more material than management hours saved, are worker hours saved using SafetyAmp for Incident Management. With workers, there's an additional variable of adoption that will impact how effective any software will be in saving hours.
Due to its ease and configurability, SafetyAmp boasts a 99%+ worker adoption rate across our user's workforce. Worker savings associated with these reduced hours spent on incident management = (average hourly wage of workers) * (estimated # of hours saved) * (adoption rate).
Reduced Property damage costs: Property damage scales proportionately to number of incidents. A reduction in incidents through better incident management will produce property damage savings = (cost per incident) * (estimated # of reduced incidents).
Reduced Insurance premiums: Insurance premiums will decrease at a rate proportional to the decline in number of incidents. A reduction in incidents through better incident management will vary by carrier and type of industry, and is very company specific.
Reduction in Medical costs: Medical costs and associated claims correlate directly to the number of and severity of incidents. A reduction in incidents through better incident management will produce medical cost savings = (estimated medical cost per incident) * (estimated # of reduced incidents).
Reduced Legal Fees: Legal fees related to incidents will rise or fall directly with the number of incidents, and corresponding number of lawsuits. A reduction in incidents through better incident management will produce legal cost savings = (estimated legal cost per incident) * (estimated # of reduced incidents) * (percentage of incidents requiring legal defense).
OSHA Fines avoided: Not surprisingly, increasing compliance along with reducing incidents reduces probability of being fined by OSHA for a compliance violation. In addition to reducing Incidents, SafetyAmp improves general compliance across sites, and increases audit preparedness. Automated notifications increase the timeliness of reporting to regulatory agencies. Digital recordkeeping greatly reduces the risk of fines due to lost, inaccurate, or unreadable documents. A reduction in OSHA fines is very company specific and can be estimated by simply assuming some reduction based on past history of fines, better compliance adherence and reporting, and reduced number of incidents.
A powerful management and executive aspect of SafetyAmp is the ability to present analytics and dashboards across all departments.
SafetyAmp creates charts and graphs that help visualize the leading indicators and metrics from safety and quality data across locations and combine these into simple, role-based dashboards. This powerful, real-time business intelligence will enable management to gain new insights from EHSQ activities.
Specific to an ROI, areas of savings within enhanced business intelligence include:
Time saved on data entry for report generationTime saved on producing reportsTime saved on interpreting dataTime saved distributing reports based on role and responsibility
The savings generated from this reporting capability largely translates to hours saved in compiling, generating and interpreting data and dashboards. The cumulation of savings from this capability is = (Total hours saved on the 4 identified areas of data reporting) * (assumed hourly wage).
This ROI does not assume any additional quantitative benefit from the simple fact that management will be making better decisions with better data.
Users can configure apps quickly and easily in the SafetyAmp platform to capture data, integrate workflows, automate follow-ups and run reports for any EHSQ activity. This functionality saves internal developers time normally spent customizing specific applications to meet an organization's unique requirements or workflow.
The ability to rapidly develop apps creates savings = (estimated hours of developer time spent on app creation) * (hourly wage of software developer).
SafetyAmp streamlines and standardizes audit procedures with a mobile friendly, simple drag and drop inspection builder, configurable forms for plan inspections, and tracking of employee engagement across inspection programs.
Specific to an ROI, areas of savings within simplified audit workflows include:
Time saved on preparing and conducting auditsHours saved compiling actions / findingsHours saved on data entry / reportingFines eliminated from lost documents
The savings generated from simplifying audit workflows largely translates to hours preparing for, conducting, and follow up on audits. For the ROI, the cumulation of savings from this capability is = (Total hours saved on the 4 identified areas of audits) * (assumed hourly wage).
SafetyAmp simplifies action item management, providing close-loop processes and ensuring that tasks have the necessary corrective follow up.
Specific to an ROI, areas of savings from improved Action Item management include:
Hours saved on manual follow-upTime spent scanning or finding documentationHours saved waiting for updates
The savings generated from improved action item management largely translates to hours saved preparing for, conducting, and follow up on audits. For the ROI, the cumulation of savings from this capability is = (Total hours saved on the 3 identified areas of action item management) * (assumed hourly wage).
SafetyAmp's Learning Management System (LMS) platform and selection of courses enable more efficient management of certification programs through easy enrollment, configurable curriculums, certificate tracking, and compliance reporting.
Specific to an ROI, areas of savings a LMS system from SafetyAmp include:
Admin hours saved on reporting, tracking, and course creation: Material time savings can be achieved in the management and delivery of training programs through SafetyAmp LMS platform. Savings = (estimated hours saved) * (assumed hourly wage).
3rd-Party fees saved on course creation: Create custom courses within the platform or select from over 200 courses from partner training providers. Savings = $ spent on third Parties for course creation.
Fines avoided via automated compliance tracking: By ensuring staff have an appropriate level of training, managing renewals, tracking certificates, SafetyAmp helps eliminate fines for non-compliance. Savings are very company specific and are = $ associated with previous fines associated with training.
In addition to the tangible ROI detailed above, there are numerous intangible benefits to deploying an EHS software platform like SafetyAmp.
An effective EHS software will help differentiate an organization, and lead to quick payback. These benefits can be generalized as:
Improved brand reputation: Organizations brands are impacted by accidents and ESG. An effective EHS platform benefits both.
Safer workplace: In addition to ensuring OSHA compliance, these platforms ensure a safer workplace and reduced risk of injury.
Employee productivity and operational efficiency: Employers that demonstrate commitment to a safer workplace reduce employee churn and increase employee satisfaction. This in turn leads to an increased culture of responsibility, increased employee productivity, improved profits both in the short and long term.
Reduced business risk: The financial ramifications from a major incident trump any ROI analysis and could have material impact on financial viability of an entire organization.
SafetyAmp helps in improving the financial viability of your business, the productivity of your workforce, and the physical well-being of your team. Given the strong ROI of deploying SafetyAmp, unlike many other investments, the positive payback is measured in days, not months or years.
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