EHS software can be inherently difficult to get budget for as many of the benefits are hard to measure. The current economic climate makes convincing executives even more challenging, but you’re still able to secure investment with a sufficiently persuasive business case.
There is plenty of evidence attesting to the value of EHS software. However, intangible results such as preventing “what-if” incidents are hard to quantify, meaning that even now, EHS professionals are tasked with convincing executives.
In this case, we can look at the other angles. Here’s how to create a winning business case for EHS software in 2024.
Why is a business case important?
All companies must rightly justify what they’re spending money on, with every department vying for budget. Therefore, you need a stand-out case to win executive support.
Furthermore, researching for a business case will help you choose the right EHS software based on functionality, IT, cost, and customer experiences.
A helpful approach to building a business case for EHS software is to use storytelling.
All good stories have a problem that gets solved. In addition, all good stories engage, motivate, and can change opinion—so storytelling is a powerful medium for your EHS software proposal.
In his book Lead With a Story, Paul Smith defined the C.A.R. framework for leaders to tell better business stories: Context, Action, Result.
For example, this could look like:
- Define your problem statement
- Propose your solution
- Set outcome expectations
Let’s look at how to put this into practice for EHS software.
Start your business case with the problem
First, define the problem. Consider questions like:
- Are data errors becoming commonplace?
- How much time is the EHS team spending on admin?
- Is a cumbersome process deterring employees from reporting issues?
- Does the current EHS management process align with the company mission?
- Are there things being missed because analytics is lacking or non-existent?
This will help you form your problem statement. In other words, your reasons.
After executives know there’s a problem, the next part of the story is proposing the solution.
Consider the cost of doing nothing
One alternative to implementing new EHS software is doing nothing. This is when comparing costs can get executives’ ears to perk up.
As much as EHS professionals know it shouldn’t be about the money, all companies have a bottom line – which means cold, hard cash numbers can help your business case.
For example, one safety manager I spoke to spent time calculating exactly how many hours the safety team spent on administration, copying information from paper into spreadsheets and other systems. This came to 5 days per month.
He then figured out this time was costing the company approximately $200,000 per year. This provided the means to compare the cost of EHS software, which was going to reduce if not eliminate the need for this kind of admin.
Over the course of 3 years, the company would save in excess of $400,000 in staff time. Ultimately, this number helped gain executive approval to deploy Pro-Sapien. The CEO themselves sponsored the project, which in turn won IT support.
Compare the cost of EHS software
Being able to compare the cost of doing nothing with the cost of new EHS software requires market research.
Typically, EHS software incurs an annual license fee, and the upfront cost to implement. There are many variables affecting these, such as:
- Employee count
- Required functionality
- Multilingual requirements
Therefore, year one cost can range anywhere from $70,000-$200,000. We recommend gathering pricing from 3-5 vendors which will provide a budget range to work with. Importantly, this also provides context to executives who may not be aware how much enterprise EHS software costs.
I once heard of a business case being struck down because the executive decision maker was not aware modern EHS software comes with an annual license fee. They expected a (now largely defunct) proprietary model. Therefore, know your audience! And if required, include information on the benefits of support and maintenance.
Include reasons from an IT standpoint
Chances are, IT will have a seat on the buying team. However, even if they don’t, EHS buyers should still seek IT input because they’ll be involved in deployment.
If IT give a thumbs up, the project is more likely to succeed—and therefore something executives can feel more comfortable approving.
Furthermore, IT can help you consider a technology perspective and frame this as a digital transformation investment.
For the first time in 2023, research firm Verdantix asked respondents to their EHS Global Corporate Survey about drivers for IT system consolidation. Specifically, the top driver among EHS professionals was making business intelligence (BI) more reliable, which was very to highly significant for 63% of respondents. In addition, 60% reported increasing worker engagement as a very to highly significant driver.
It’s for reasons like these more and more firms are choosing EHS software that integrates with their existing platforms like Microsoft 365, and is something you can consider for your business case.
Align with business value
Crucially, you must know what’s important to the business. This will let you demonstrate benefits in terms of business value.
In the Global Corporate Survey 2023, Verdantix found that demonstrating the value of total worker health is the most significant criteria to make the business case for EHS investment (73% very to highest significance), followed by highlighting the potential to decrease LTIs (63% very to highest significance).
These achievements require a long-term view of Return on Investment (ROI) and can be a little abstract, so it can help to think about KPIs. Does the board track absences, downtime, or production output?
Use this knowledge to pick what arguments to make.
Moreover, a strong business case interweaves EHS into overall business strategy. EHS should not be viewed as a siloed department, and neither should your EHS software. That’s why it’s important to pick a solution that will engage a range of stakeholders, from shop floor to top floor.
Prioritise to find quick wins
When aligning your case with business value, make sure you’re working with a diverse steering group.
Consult a range of stakeholders including IT, Finance, and Operations (including supervisors and frontline workers) to match up with priorities across the business.
However, to prevent your scope growing arms and legs, focus on quick wins. This might mean a phased approach – like prioritising what will make the biggest difference, the fastest. For example, starting with Incident Management.
In other words, don’t try to “boil the ocean!”
Share expected outcomes
To demonstrate projected value, follow up your claims with evidence from peers.
A good way to communicate expected outcomes is to look at case studies and gather statistics. For example, Pro-Sapien client LBC Tank Terminals was able to increase near miss reporting by 370% in the first year, and ASCO reduced time spent on monthly HSSEQ reports by 80% using Pro-Sapien. Quantitative results like these can help paint a picture of success to executives and help you define your own success criteria.
What tangible KPIs will you track to determine ROI? Include these in your business case to show you’ve thought about evaluation. This could be tracking things like:
- Number of near miss reports (an indicator of engagement)
- Time spent on monthly reporting
- Lost Time Injury Frequency Rate (LTIFR) – with a long-term view
- Inspection scores – with a long-term view
- Length of time between CAPA assignment and completion
Combine these with less tangible indicators such as how empowered the EHS team feels to make data-based decisions, how much more ownership Site Managers can take, and trust built with frontline workers.
Supercharge your EHS software business case
Putting forward your well-thought-out arguments around cost, IT, and EHS performance will help you convince executives to approve spend on your chosen EHS software.
The key is to position EHS software as an investment in digital transformation, intertwining EHS into overall business strategy—especially necessary in the age of ESG.
Don’t forget, this is your chance to captivate your audience with the EHS story!
Get even more tips in our Building a Business Case for EHS Software whitepaper.