Managing environmental health and safety compliance has never been easy. SaaS is changing that.
– By Luke Jacobs, Co-founder and CEO, Encamp
“Entrepreneur” was not originally in my career plan. Environmental health and safety and protecting the environment was. The bridge between the two, for me, was finding out how maddening the reporting process to comply with EHS regulations could be. So, stick with the archaic manual methods organizations have used for decades, or change the thinking and find a better way?
Thank Software as a Service (SaaS) for the answer.
Some EHS perspectives first
In the United States, Environmental Health and Safety (EHS) regulations are broadly divided into program areas for Air, Hazardous Materials, Quality, Safety, Sustainability, Waste, and Water. Each program area is regulated under laws that establish federal EHS standards. These standards are administered by the U.S. Environmental Protection Agency (EPA) and other federal agencies, and companies must file scheduled compliance reports accordingly.
Two of the more critical reporting criteria for compliance are Tier II reports, a.k.a. Emergency and Hazardous Chemical Inventory forms, and reports for the Emergency Planning and Community Right-to-Know Act of 1986 (EPCRA).
Businesses with hazardous chemicals must submit Tier II reports (sometimes referred to as EPCRA Tier II reports) each year to help communities plan for and respond to emergencies. Tier II reports further help state and local agencies understand the risks posed by hazardous materials used or stored (or both) at a company’s various facilities. Similarly, EPCRA aids communities in planning for chemical emergencies, and requires industry to report on the storage, use and releases of hazardous substances. EPCRA applies to federal, state, and local governments.
All 50 states in the U.S. are permitted to apply their own additional regulations for compliance reporting. For the most part at this level, each state has its own requirements, schedules, and systems for submitting reports. Therefore, when companies maintain facilities in different states, they must meet the regulatory obligations in each state.
Standardization from state to state, however? It’s virtually non-existent, especially in the portals and systems companies use to submit compliance reports in each state. Such a reporting maze doesn’t just present significant costs, people-hours and stress. It raises the risk of noncompliance and makes it harder for businesses to function. And the more states in which a company maintains facilities, the worse the maze gets.
Right now, in fact, there are more than 4.2 million facilities throughout the U.S. that must comply with applicable EHS regulations. Globally, there are millions more. While some facilities must file only two or three EHS compliance reports every year, others file more than 100 EHS compliance reports a month.
The age-old way for EHS compliance
For EHS compliance management and reporting — and for nearly 40 years now — businesses have used dozens of point systems to maintain data. In the EHS world, this means information for facilities, chemical inventories, safety data sheets, permits, compliance due dates, sampling data, and more.
The problem is, these systems rarely talk to one another, if ever. In many cases it’s because organizations don’t have a central compliance management system to serve as the hub. What’s harder to understand is why most companies managing such information still use spreadsheets, paper binders, and endless copying and pasting to import and export compliance data. The status quo, as we say.
Setting a new course for managing EHS data
Call it innovative if you want, but it’s really practicality: Businesses and their facilities should have a single system for managing EHS data that unifies facility compliance applicability, reporting requirements and documentation.
Using this single source of data truth, companies can manage EHS compliance and reporting across their organization far more easily. By individual facility and state, the system can file compliance reports automatically, accurately, and on time — driving tremendous enterprise value and meaningful risk mitigation.
Again, thank SaaS.
More perspective. At this point for EHS compliance programs, the only other solutions companies can choose from are:
- Environmental Management Information Systems (EMIS) legacy software,
- the status quo of MS Office tools (Excel, SharePoint),
- or environmental consultants.
For legacy EMIS software, buy-in is relatively low in that many users admittedly dislike it. Status quo is also typically challenging to overcome. Using a spreadsheet someone created 15 years ago “is just the way we’ve always done it.” And few companies ever build long-term relationships with EHS consultants and their costly hourly services.
The notable, overriding dynamic of these solutions is that each one fits compliance management more narrowly than does SaaS. A SaaS platform effectively streamlines EHS compliance management and reporting from end to end. It introduces digital transformation for data, and automation for business and reporting processes. It gives organizations and their EHS teams a connected and intuitive environment in which to manage compliance for all federal regulations and in all 50 United States.
In this scenario, SaaS is both a significant improvement and a clear industry disruptor. Such complete functionality enables SaaS to deliver value across the EHS compliance value chain by reducing people hours and costs over multiple data systems, EMIS software, and consultants.
SaaS also puts EMIS companies and consultants in a classic innovator’s dilemma. To adapt and compete in the future, they would have to cannibalize their existing revenue streams, yet invest in the R&D required to innovate in SaaS. Conceivably, partnerships between the two entities could drive a new paradigm in EHS markets. But in the U.S. at least, it would still rely on SaaS as the system of record for all EHS data.
A promising future for EHS consulting
Near term, says an April 2020 industry report from ResearchAndMarkets.com1, the global environmental consulting services market is holding steady. “Steady” in this case being a projected decline from $31.3 billion in 2019 to $30.4 billion in 2020. But given the COVID-19 outbreak and its economic impact worldwide, we’ll take it.
The brighter side is that market for EHS consulting is expected to recover nicely and grow throughout 2021-2023. The compound annual growth rate (CAGR) is estimated at 3%, and spending is anticipated to reach $33.3 billion by 2023. Also as it has since 2019, North America will continue to account for more than half of the global EHS consulting services market.
These numbers tell us two things. First, the total market for EHS consulting remains large and will soon start growing again. And second, the market for consulting services is significantly larger than the one for EMIS legacy software. Collectively, we view this dynamic as an artifact both of the high costs for consulting and the siloed nature of the current software available in the EHS market.
Now with SaaS in the solutions fold, the opportunity to lead the EHS compliance management market is magnified.
How SaaS wins against EHS software and consultants
Historically, consultants have won the compliance management battle against EMIS software largely because they provide a complete experience for their customers. A skilled consultant can do everything from determining compliance applicability to filing all required reports, and no EMIS or other software product comes close to this. Even with best-in-class EMIS applications, a business can only expect an Excel export of raw data that must still be organized, submitted, and documented to meet compliance requirements.
But the market is tired of endless consulting fees and software that doesn’t complete the compliance process. In lieu of software that falls short of their needs, EHS professionals are taking note of other fields that have long used SaaS built for their jobs.
Or put another way, the EHS market is finally beginning to realize SaaS is a mature technology that’s been widely used in business for years. Recognized apps like SAP, Salesforce, Zoom, Slack, Workday, Microsoft Office 365 and others have paved a strong adoption path for SaaS and made it mainstream. The simplicity and versatility of SaaS has helped.
With its rapid cloud-based deployment, virtual capabilities, scalability, managed-cost subscriptions (per user or workgroup), and superior user, network, and data security, SaaS sells itself. Add the aspect of digital transformation, and SaaS continues to disrupt the business world some 20 years after it was first introduced.
Now transition SaaS to EHS compliance management. Currently, no EHS software competitors approach the problem of end-to-end EHS compliance management like Encamp’s SaaS platform. Nor is any consulting firm in the EHS compliance market a SaaS company.
With SaaS creating a powerful new path to tools like automation and digitized data for EHS compliance, the divide with EMIS software and consultants is broadening quickly. And decidedly. SaaS makes EHS compliance and reporting more efficient, more consistent, more accurate and more reliable.
Changing mindsets for SaaS adoption
Given where we are on the timeline of technology and digital transformation, innovation isn’t just about implementing things like the cloud and Software as a Service. It’s about improving processes and creating smarter ways to work and solve problems with automation and digital agility. And yet, the role innovation plays in some organizations still meets resistance.
For many people, it’s hard to change established work habits and learn new ways of completing tasks. Even when those new ways are easier and more efficient. This is one reason innovation has always required new mindsets, or at least open minds. Which the EHS compliance sector is now finding out.
People in compliance roles must be willing to accept new technologies such as SaaS, and then actually use the tools it affords them. It must be a matter of engagement overcoming resistance. Younger generations get this. They’ve been raised on technology and mobile devices and can’t wait for the next big thing. Older generations, however, sometimes need convincing. As users who don’t often take to new technology willingly, the trick is letting them see how much easier it makes their workday.
The perfect example for EHS compliance is the industry’s traditional use of spreadsheets and disjointed systems to manage data. (EMIS legacy software also fits this equation.) The process is disjointed and tedious. But what if a business adopted a SaaS-based single compliance platform and put automation to work?
EHS staff could easily create digital replicas of every spreadsheet and make data input and output intuitive and fast. Collecting new data would also become a real-time function. Critical data for Tier II reports, EPCRA reports, incident reports and others could establish historical trends automatically.
The improvement for reporting forms and submissions — for all 50 states in the U.S. — could be similar. As we pointed to earlier, state, federal and local agencies maintain their own portals and inconsistent forms and procedures for compliance reporting, with few standards. No stress. An end-to-end compliance platform, such as the one from Encamp, houses these forms and tells you when they’re due, in what format, and where and how to submit them.
Processes are streamlined because the compliance platform compliments them.
Final word… engage the right people for SaaS adoption
Realistically, few people on EHS compliance teams are tasked with deciding innovation initiatives. In this case, whether to implement a SaaS platform to manage compliance processes and activities. But in compliance circles, many front-line workers do have the technical knowledge, problem-solving abilities and communications skills to impact such decisions favorably.
Just as critical is executive leadership getting the right employees in place to lead adoption efforts at the development level. “Talent” means persons having both the right skills and the mindset to move agendas forward. This is where front-line EHS champions can make the push for SaaS adoption across their organization.
All told, one certainty about embracing new technologies like SaaS is that it requires testing new ideas. While the idea of using a SaaS platform to manage EHS compliance is new, SaaS itself is not.
Software as a Service is a proven technology. It’s reliable, adaptable, and easily administered. That makes SaaS the perfect vehicle for Encamp’s end-to-end compliance management platform… and for challenging the status quo.
1 “Environmental Consulting Services Industry Outlook 2020-2030: COVID-19 Impact and Recovery” report, ResearchAndMarkets.com, April 29, 2020.