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The Business Case for RiskICE

Reduce operating costs – Occupational Illness, Claims, Insurance
Automation of the EHS function can achieve the following savings:
• The reduction in days lost through accidents has an annualised saving of £100,000 per annum.6
• It has been shown that workplaces that EHS systems can reduce their injury and illness rate by 20-40% and see a return of £4 on every £1 invested.7
• Defending one claim by proving efficient management of H&S processes would make investment in automation good financial sense.

Real life scenario of cost reduction
Introduction of H&S Management System in UK utility company is self financing within 2 years.

By implementing an effective accident reduction programme and thus reducing the rate of accidents per 1000 employees from approximately 140 to 55, a large utility company in the UK saved over to £2.5 million within six years.
The development & ongoing auditing of specific prevention programmes were shown to become self financing within 2 years, going on to achieve loss control savings of £19,300 per annum over the next 10 years.

The effectiveness of such a programme depends on a number of factors, such as how appropriate the accident prevention measures are, the commitment of top management to the programme, and most importantly how effective and water¬tight the monitoring and control method is. Automation enables an organisation achieve full control of H&S activities ensuring policy drives performance. 

Help achieve recognised standards of best practise
With an automated H&S system large organisations can more easily achieve international recognition such as OHSAS 18001 (Occupational H&S), ISO 9001 (Quality Management), and environmental standards such as ISO 14001 (Environmental Management) and Greenhouse Gas Emissions Verification.
Such standards are easier and less expensive to achieve through automation because a closed-loop audit and action tracking facility is put in place, ensuring EHS policies are not simply paper-based exercises, but established procedures embedded into day to day processes. Investment in automation can thus help even a large international organisation standardise procedures within each business unit, ensuring compliance with company and national standards alike.

Omega, UK

AIHA, USA 8 http://www.hse.gov.uk/costs/case_studies/case_studies_detail.asp

Comply with Corporate Social Responsibility requirements
Developing a safety culture and embedding it into day-to-day processes through automation of the EHS function improves the ability to deliver against established KPIs, achieving and maintaining standards of best-practise. Because issues such as environment, health and safety are linked closely with rates of external investment the bottom line of companies that fail to prepare is threatened. Thus automation of the EHS management system will help preserve the commitment of long-term investors concerned about the value of their shares.

Sample Scenario of how automation achieved massive savings
Take an example of a large utilities company working in the UK:
Problem

The company employs 450 people and employs 5 Environmental, Health & Safety Advisors on a full¬time basis, paid a salary of £36,000. The Advisors spend on average 5 hours a week on administration, amounting to approximately 990 hours a year.

In addition an EHS Clerk is employed on a full¬time basis, on a salary of £32,000.

Despite this large annual investment in EHS activities, accidents were increasing across the Group, and keeping control across several subsidiaries was proving too difficult for traditional processes.

Solution

On review of the H&S function, the company decided to invest in an automated solution to reduce the burden of administration on key H&S Personnel, and to improve statistical analysis presented to the board at review meetings.
Implementation of the automated system incurred a once-off capital charge of £50k for 25 users, and a charge of £10k annually from 2 years thereafter. The time resource required amounted to 50 hours to configure the software to the company’s needs.

Benefits
Three years later the implementation Project Team reviews the benefits accruing from the successful implementation of the software:

•  Morale has improved as less time is spent on number-crunching & red-tape, reducing stress related illness by 60%, producing annual savings of £4k.
•  Within 1 year an EHS Advisor became a part¬time floating supervisor; working from central HQ to ensure performance is in line with corporate objectives. This dramatically improved H&S and is producing annual savings of £16k.
•  Within 1 year four effective corrective action plans were devised and implemented as a result of enhanced trend analysis. These have reduced injuries in the workplace by 15%, producing savings over 2 years of £200k.
•  Within 1 year it became clear the E&S Clerk was no longer necessary, and has been moved to a different department within the company. This is producing an annual saving of £32k.
•  Within 2 years the organisation won a large government contract on foot of the demonstrated commitment to improving H&S in the workplace; recognised by OHSAS: 18001 accreditation. This will be worth £500k over 5 years.
It was clear to the Project Team and the Executive who championed the exercise that the software had paid for itself within 1 year, overall savings amounted to £325k over 3 years, and ongoing annual savings amount to approximately £90k.
Conclusion
Efficient management of EHS, risk and compliance requires knowledge to be available and shared across all departments within the organisation. Automation enables organisations to achieve this intelligent sharing of information through standardising, centralising and automating all processes relating to EHS.
Such automation increases profit margins through:
• Reducing man hours spent on manual administration, focussing staff on priority activities
• Standardized data collection to eliminate duplication, audit errors and inconsistencies
• Increased transparency of data; improving analysis and enabling responsive action plans to be put in place
• Supplying management with real-time updates on accidents or adverse trends
• Minimising accidents and related costs – help ensure a safer work environment through effective management and control of risk
• Helping achieve recognised standards of best practise
• Creating Closed Loop action tracking and workflow enabled auto¬notification

Demonstrably proving your compliance is crucial, showing your commitment to H&S to employees, regulators and investors alike. It is clear that employing H&S consultants can indeed be helpful in developing the processes and means to achieving compliance; however in a large organisation automation of these processes is necessary to demonstrate and prove this compliance in court.

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