Bill Gates once said we overestimate the change that will occur in the next two years but underestimate the change that will occur in the next ten. As Pro-Sapien turns 10, we’re reflecting on how this is true in our industry: environmental, health and safety software.
Before Pro-Sapien began in 2012, like most software, EHS software was quite antiquated by today’s post-iPhone standards. It was largely on-premise, inaccessible to frontline workers, and data analysis was lacking.
However, ten years on, the industry has grown to $1.5BN. Much has changed, both in the market and at Pro-Sapien (remember SharePoint 2010?).
Here, Director Murray Ferguson will discuss what’s improved, why, and how that impacts the exciting journey ahead.
Murray, you were one of the founders of Pro-Sapien in 2012 and have seen not only the company but the whole marketplace evolve since then. In your experience, what are the most notable changes?
The EHS landscape has evolved in a lot of ways during the last decade—and not just from the software perspective. Nonetheless, technology has driven many of those changes.
An obvious one is the use of mobile devices, which has been a game-changer for frontline workers. On a larger scale, there is also the growth of cloud-based services, which has created a fertile environment for the expansion of some major software vendors.
EHS software had its humble beginnings in the 90s and is now a billion-dollar industry. In the last 10 years, the increased compliance need has also driven massive investment from venture capital and market consolidation through numerous mergers and acquisitions.
However, EHS departments were slower—compared to other business functions—to embrace Software-as-a-Service (SaaS). This may have been down to lack of investment, risk aversion, or other reasons. But now, organizations are realizing the benefits, which, according to Verdantix, is behind the recent increase in spend on EHS technologies.
Additionally, wider factors have impacted adoption. Compliance across the board is driving GRC software implementations, and the standard of welfare conditions required of employers has improved. Expectations will continue to rise, especially as we see ESG take the spotlight.
You mention mobile devices and SaaS as big changes in the last decade. How do you think technology will continue to shape the landscape of EHS in the next decade?
With disruptive technologies being… well, disruptive, making predictions beyond a couple of years is challenging. However, I’ll have a go!
Clearly, the pace of change is accelerating.
From our perspective, the need for closer integration with enterprise IT platforms (such as Microsoft 365) will continue to grow, because alignment with collaboration platforms makes it easier for businesses to ensure EHS is infused throughout company culture. Interestingly, independent analyst Verdantix has now picked up on the trend and acknowledged it’s here to stay due to ongoing demand for employee engagement.
Another area I hear a lot about is wearables, drones, VR and AI. In time, I believe these technologies will cascade down from those at the forefront, but it’s difficult to envisage universal uptake in the next 5 years, at least. Early adopters will pave the way but considering the number of companies still using spreadsheets to manage EHS, adopting more advanced technologies will be a stretch for many.
There, I’ve said it, and anticipate being proved wrong as we head into the 2030s!
Increasingly, EHS is included in the Environmental, Social and Governance (ESG) conversation. With this renewed focus, what trends do you think we will see continue to gain steam over the next few years?
In my opinion, firstly, we’ll continue to see the trickle-down effect of EHS processes initially developed by high-risk organizations become adopted by lower risk industries, widening their EHS focus.
Second, I anticipate a greater emphasis on environmental impact—by no means a new topic, but one that will gain steam. This will not just be driven by government agencies, but by a younger generation that must deal with the ‘sharp end’ of climate change.
As the climate heats up, environmental activism could become more mainstream, pushing businesses to be far more transparent on their environmental record. These requirements will surely translate into the need to capture and report on much more environmental information, as well as begin to affect share price, which will get the attention of CFOs.
Furthermore, expectations of employer social responsibility are going up (the ‘S’ in ESG). For example, mental health issues are now regular topics at EHS events, and I don’t believe this is simply a reaction to the pandemic. Fortunately, software is developing at a pace to accommodate this new norm, such as Microsoft Viva’s inclusion of meditation app Headspace.
The accessibility of EHS data analytics has been improving in recent years, with software vendors investing in their tools and integrating with business intelligence (BI) market leaders. How do you think this trend will progress in the coming years?
At Pro-Sapien we have been ‘banging the drum’ for years about empowering end users when it comes to Business Intelligence.
Notably, Microsoft’s introduction of disruptive BI technologies influenced end user expectation. Such technology is now ubiquitous and undoubtedly enables the vision of ‘BI for the masses’. Now, most employees are able to create a Power BI report regardless of role and IT skillset.
However, this doesn’t make every EHS manager a BI expert. The need for EHS software vendors remains to ensure the data and reporting model meet each organization’s requirements.
On the other hand, it also means that EHS departments can go into a report and amend it for their own purposes without relying on a third party. The technology for this is here and available now. For example, Power BI and Tableau, with Power BI being the obvious choice for Microsoft 365 businesses. It will likely take a few years for these technologies to reach their full potential across the EHS industry.
Earlier, you mentioned the EHS software market had become more consolidated. Going forward, what factors will determine differentiation among vendors?
I believe several factors will come into play. We discussed it before, but integration with core IT platforms will continue to be a focus of differentiation as companies seek to ‘democratize’ IT. This helps to empower staff and take a holistic approach to core activities such as training (LMSs), safety, compliance and environmental management.
However, I think a key aspect of differentiation going forward will be client-vendor relationships.
For example, the evolution of SaaS saw licensing models transition from perpetual to subscription based. This, along with increased competition, has raised the bar when it comes to better support for customers.
Clients are not looking for a quick purchase, they are looking for a long-term relationship built on trust, collaboration and reliable support—so I think this will become fundamental when choosing a vendor. In fact, a recent Salesforce report revealed that 82% of B2B buyers felt that a personalized approach strengthened their loyalty towards a business. Nurturing that relationship leads to better and more useful EHS software, so it’s something we wholeheartedly encourage at Pro-Sapien.
The EHS software marketplace has grown from being valued at $1 billion in 2017 to now being worth around $1.5 billion. Do you think the industry will continue to grow at the same rate?
The investment in EHS software companies is such that it will continue to spur innovation and better software. The current market size and predicted growth will drive progress.
In the past, EHS software was an industry many people hadn’t heard of, but now, there’s much greater awareness and it’s attracting top talent. People want to be part of the ESG solution working to protect employees, consumers, and the environment, and software has a vital role to play in that goal.
To meet this demand, which will continue to improve due to consumer pressure and market regulations, EHS software vendors need to nurture their staff to be the best, and that’s my vision for Pro-Sapien. To achieve our mission of making EHS as easy as email—something familiar, easy, and a big part of work culture.
So, to answer your original question, it’s clear the EHS software marketplace will continue to grow at pace. The market hit $1BN in 2017, five years ago, and predictions indicate it will take less than another five to reach $2BN. For us, that means Pro-Sapien must continue to work with a team of the brightest and most innovative individuals seeking to play a part in something special.
How would you sum up what we have discussed today?
In summary, EHS software has come a long way from its on-premise days. With the consolidation of the market and the adoption of SaaS, it has grown into the competitive billion-dollar industry we’re proud to be part of.
Driven by IT integration and easier-to-use tools, employee engagement will continue to take the spotlight in years to come. Of course, market consolidation will drive progress, but differentiation will rely heavily on client-vendor collaboration.
Importantly, attracting top talent is key not only for Pro-Sapien but for the industry as a whole.
We can only speculate, but if we are to believe Bill Gates, I have no doubt reality will exceed our expectations.
There are exciting times ahead for the EHS software industry. Be part of the ESG solution to keep workers safe and the environment cared for — find your role at Pro-Sapien today→