Calculating ROI for EHS Software – Can it Be as Low as 6 Months?
With any software purchase you make for your company there is a number of aspects to consider. Along with efficiency, accuracy, speed and reporting capabilities, you want to know how long it will take to get your investment back.
Calculating the ROI for Environmental Health and Safety software starts with getting an inventory of your current costs. You need to look at all of the procedures you currently do, how long each one currently takes, and at what cost.
For one of our customers, these are the procedures they use along with their yearly frequency, duration and average hourly costs:
With the help of our software, they were able to realize the following savings in time (as a %) and money over a year’s time:
The graph above gives you a visual representation of where the biggest savings can come from in terms of overall savings and savings vs costs.
How Much Can the Software Save You?
To find out the amount of time the software can save you in each area or each step, get in touch with one of our specialists. They’ve got a lot of experience with different types of industries to be able to give you a pretty good estimate.
You’ll also be able to get a price estimate of the software. That should give you all the information you need to figure out your savings per month and your estimated ROI. As long as your expected savings is greater than the yearly cost of the software, you’re getting a return on your investment.
Based on our client feedback, they get their ROI in less than 6 months using the CONFORMiT software. One of our mining and metallurgy customers said they amortized within 3 months. Another client in the pulp and paper industry said they get a savings of $6M per year using our software in all of their 80 sites.
Non-Monetary Benefits that Still Help the Company
Not part of the ROI calculations but still valuable benefits of the software are:
Without using EHS software, the data received in reports by management is always old. This is due to the time it takes to create the reports and their frequency. – usually once per month. With CONFORMiT software, reports are available almost immediately, as often as management wants them. Or whenever there is something to report.
Less Concrete ROI Calculation – Risk Assessment
If your software provider has a risk assessment component, it can greatly shorten your ROI. But it’s not as easily calculated.
This module helps assess, prioritize and manage all of the safety risks in your business. CONFORMiT has one of the best risk assessment modules on the market with a history of improving safety records and shortening ROI. It automatically calculates the risk urgency of each area with greater accuracy, speed and reliability.
With an accurate, objective assessment, management can make better decisions on which risks to manage first.
Reduction of Incidents has Its Own Rewards
With the management and reduction of risks, you will see a reduction of incidents. Less incidents mean:
In a sense, you’re double-dipping in your ROI calculations when you reduce the number of incidents. You’re not only reducing the time it takes to complete individual tasks, you’re eliminating some of them completely.
This kind of data is not something you can find on your own. But one of our reps can give you an estimate based on your company and market information. They can give you an idea of the percentage of incident reductions you can expect each year.
Increase production vs cost savings
And there’s one more thing to consider: increased production. With less incidents, and less downtime in the operations areas, production increases in the company. Your ROI also comes from increased revenue. Not just cost savings. But that’s also tougher to estimate. Call us to get a better idea for your company.
Figuring Out Your Next Step
As you can see, there’s some work you can do to estimate the ROI for EHS software before purchasing it, but there’s also a lot of assumptions you still need to make. Working with a CONFORMiT rep to see the average numbers for companies of your size and market will bring you a long way towards a good ROI estimate.
While you’re at it, ask us for a list of customers that would be happy to tell you of their experiences using our EHS software, and how quickly that software got their ROI back.
By the way, the ROI calculations in this article weren’t supplied by us. They were provided by our customers. They did the analysis and presented them to us. They are the ones telling us that their ROI was realized within 6 months of using our software.
It is good practice to estimate your ROI on any major purchase your company makes such as EHS software. But the added benefits of using that software are just as important. With CONFORMiT, the safety of your workers will improve as you realize cost savings, less incidents, greater moral and increased production.
It’s just good business!