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EHS MANAGEMENT BLOG

5 Metrics to Measure EHS Software ROI

Whether you spend $5K or $500K, good EHS software should deliver more value than it costs.

The ability to measure this value — or return on investment (ROI) — is key to ensuring management buy-in and resources. 

It can also help you identify what's working and what's not, so you don't waste money on software that doesn’t yield results. (That's true whether you're making a new purchase, or evaluating the effectiveness of your existing system.)

So, how can you objectively measure EHS software ROI? Here are 5 metrics to consider:

1. Time savings

The most obvious benefit of EHS software is the time savings you’ll notice. Good software should make your team more productive. In fact, many organizations see up to a 50% reduction in time spent on common tasks when using Perillon.

To determine whether your software is delivering results, you need to know how much time you’re spending on various tasks. When you look back at your week, month, or quarter, you should notice a significant difference in the amount of time employees spend on tasks like data entry, QA/QC, assigning and following up on tasks, and creating reports.

An increase in productivity represents a positive return on investment, while no change or a decrease in productivity represents negative ROI.

2. Reduction in costs

Good software should also help your organization reduce costs through increased productivity and better performance.

Once you’ve determined how much time your team saves by using EHS software, you can track the cost savings related to these productivity gains. For example, let's say one of your core EHS team members spends 8 hours per month creating environmental compliance reports. Using software, they can do the same task in 4 hours per month. If you're paying them $35 per hour to perform this task, that's a cost savings of $1680 per year for each employee.

You can also track the cost of incidents, such as legal fees, medical and workers compensation expenses, fines, lost administrative time, and related travel expenses. These metrics can be captured right within the software.

3. Compliance performance

Another useful metric for many organizations is compliance performance. What percentage of compliance tasks are closed on time? Where are your busiest sites, and biggest issues?

Without knowing which tasks are due, who’s working on them, and any issues, it’s very difficult to improve compliance performance. With EHS software, these metrics can be tracked by site, employee, or date range, giving you full visibility into trends and patterns in compliance performance. Armed with this information, management can make decisions to improve compliance performance and get more value from their software investment.

4. Incidents/accidents

To be clear, EHS software alone won’t prevent incidents and accidents. However, when used properly, software can provide valuable insights that can help management take action to prevent unwanted events.

In turn, many organizations see a reduction in the number of incidents and accidents. By setting benchmarks and tracking the number of environmental and/or safety incidents, you can easily measure the ROI on your software.

5. Risk profile

Many organizations find that software can improve EHS risk management and reduce risks related to environmental, health, and safety performance.

Risk scoring is a useful metric to measure your organization’s overall risk profile. When risks are identified, they can be assigned a numerical value based on the severity and likelihood the risk will occur. These scores can be view in dynamic dashboards right within the software. 

Over time, you can use these scores to measure progress toward your risk reduction goals.

Your next steps

By tracking the right metrics, you can help your CEO and CFO feel confident that an investment in EHS software is money well spent. Many of these metrics can be tracked within the software itself, making it easy to measure your progress.

Most of our customers see a payback in under a year, and the ROI is typically greater than 5x the cost of the software. For more information, visit our business justification guide or let us perform a free custom ROI assessment for you.

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