The Evolving EHS Software Market



06_EHS_Adoption Curve ImageFor the past 25 years, organizations have made various investments in information technology projects in the hopes of transforming or significantly impacting environmental productivity, capability, risk, and performance. The market-which was first dubbed "EMIS," for Environmental Management Information Systems-arguably started in earnest in the early 1990s. Some companies implemented commercial solutions, including PlantWare® and OpsInfo™, that promoted automated solutions to help companies meet rigorous emerging regulations such as Title V, the Resource Conservation and Recovery Act (RCRA), and the Emergency Planning and Community Right-to-Know Act (EPCRA), whereas other organizations set out to build their own custom software to meet more specific needs and requirements. Regardless of whether they chose to build or buy, these organizations represented the innovators and early adopters that helped to shape an industry.

Fast forward to 2017: this market has significantly evolved and exploded. Appropriately, the software market has followed the trend within many organizations to combine complementary organizational functions: Environmental, Health, and Safety (EHS). Taking it a step further, some organizations have ushered in the integration of sustainability, quality, energy, supply chain, and other adjacent management systems. However you define it, there is no denying that the EHS software market is red hot with activity. But what does that mean for its current and potential future customers?

History Lesson

To first understand where we are headed, we must look back at where we have been. Using the widely accepted technology adoption curve, most people would agree that for most of the last 20-25 years, the industry has completed the innovation and early adoption phases and has entered the early majority phase of adoption.

The innovator and early adopter phases of EHS software deployments produced a mixed bag of results. There were certainly early successes, as highlighted by the adoption of centralized databases, elimination of redundant software, exposure of data quality gaps, and acceleration of the EHS professional's working knowledge and capabilities. Unfortunately, the successes were often overshadowed by the failures. There are numerous stories of multi-million-dollar software deployments that were ultimately abandoned or never reached their potential. The promise of "push button" reports and significant productivity gains was never realized. Regardless, the successes and failures of the innovation and early adoption phases were essential and produced the most valuable market resource of all: lessons learned. The lessons learned over the course of 20+ years are too numerous to list here, but some of the highlights are noted below.

  • Software will NOT eliminate staff
  • The easy button does NOT exist
  • Software deployment projects are hard, very risky, and full of potential
  • Deployment is a journey, not a destination
  • Careful planning is imperative, but should not result in deployment paralysis
  • EHS software projects are about accelerating people, process, and tools
  • EHS software is sold with shiny, slick dashboards and made successful by competent, determined, and relentless project teams.

Marketplace Activity

Next, let's look at the last 36 months of business transactions within the EHS software market to get a picture of the state of the EHS technology landscape. In a word, the activity is unprecedented. The sheer number of transactions and the amount of capital investment flowing into the marketplace is undeniable. One independent research firm has estimated that the EHS marketplace is approaching $1 billion.1 The table below highlights some of the major business transactions completed over the last three years.

06_EHS_Technology Chart

Expansion of Capabilities

Many EHS professionals have spent most of their career (or childhood) engulfed in the information age. As technology consumers, expectations are higher than ever with respect to using technology to obtain, analyze, and communicate information. Historically, EHS technology has significantly trailed behind broader state of the art capabilities. Recently, this trend has begun to reverse. The combination of Wall Street investment, early adopter feedback, and new, innovative players has resulted in useful technology features and expanded capabilities. Table 1 shows the breadth of technology features and functions as well as the coverage of EHS capabilities now in the marketplace.

EHS_Business Proceses Chart

Opportunity for EHS Software Customers

What does all of the investment and business activity in the marketplace mean for potential EHS software customers? Opportunity! For years, many EHS leaders have sought discretionary funding to invest in EHS information technology solutions. The business case necessary to secure this funding has not always been compelling, primarily due to the large price tag and the lack of specifics on the return value. So, how does this recent market shift change the game and create new opportunity?

EHS_Functions and Features Chart

First, the software market is now flooded, and heavy investments in EHS technology will be made over the next several years. While the marketplace is still crowded, the spirit of capitalism and competition is breaking down price barriers to these projects. As a result, the capital investment necessary to start and the operational costs to maintain these solutions have generally decreased for the buyer.

Second, the cloud-based and Software as a Service (SaaS) market solutions have become more mainstream with software providers and, more importantly, with IT departments within many organizations. SaaS/cloud solutions are generally cheaper to deploy and maintain over the long run; moreover, the time-to-value realization has decreased, allowing customers to reap the benefits of software faster than ever before.

Third, the explosion of available mobility tools and data analytics can have a major positive impact for organizations. Let's face it: slick mobile apps are pervasive and they are transforming the way we live (for better or for worse). As this extends into the workplace, mobile apps are the shiny new toy, providing appeal to organizations that would otherwise resist change. Further, capturing field data such as audio, video, and photos can have a great impact on audits and inspections. Real-time phone alerts can bring a new dimension to compliance task management, and the ability to initiate an incident or observation can transform the way safety is perceived and accelerate safety awareness campaigns. Advanced data analytics are no longer just for complicated business intelligence tools and geeky data analysts in IT. New data visualization tools are becoming standard; there is no longer a need to buy third-party software to process and analyze your data.

Finally, as with any maturing hot market, there will be winners and losers. It is still very important for organizations to do their proper due diligence when deciding to invest in EHS information technology. It is equally important to select a provider (or providers) that will be your partner for the long haul. Investments like these are not made every day; buyers must take the necessary steps to protect their investment and their interests.

1 http://www.verdantix.com/blog/booming-eh-s-software-market-will-break-through-1-billion-barrier-in-2017