If you think about the mission of enterprise resource planning software, in some ways it’s surprising the modules for environmental health and safety compliance weren’t integrated sooner. It is also interesting that at the same time as the major ERP vendors – Oracle, Microsoft, SAP, IBM, and others – were systematically integrating the major business information systems that had evolved, one company, Environmental Support Solutions, a 15 year old company based in Tempe, Arizona, was systematically integrating the environmental health and safety (EH&S) information systems that had similarly evolved as fragmented, tactical solutions.
In both cases, there were compelling reasons why these information systems needed to be welded into one set of compatible, interoperable tools, but while the enterprise vendors knit together software packages for accounting, sales force management, customer service and support, manufacturing logistics, etc., competing to deliver enterprise software products that have been highly visible and delivered explosive growth to their creators, ESS has quietly done the same thing with a host of EH&S systems, and they appear to be the only game in town.
THE INFORMATION CHALLENGE ADDRESSED WITH ESS SOFTWARE
Developing point solutions to regulatory requirements have
left companies with hundreds of small databases containing
data collected manually from multiple sources.
With the 21st century version of the green revolution in full swing, now tempered by a financial sobriety that will make every corporate investment more thoughtful than ever, ESS has put together an enterprise software package to manage EH&S that can be justified financially even in tough financial times. ESS’s integrated EH&S solution has attracted the attention of the major ERP vendors, all of whom now recognize the value of including EH&S modules as part of their comprehensive enterprise software products. Earlier today I had the chance to talk with the CEO of ESS, Robert Johnson, about why they have the right product at the right time.
“We have been doing internal market studies and see five areas of huge growth and interest right now,” said Johnson, “emissions monitoring, compliance assurance, corporate social responsibility, worker health, and safety and environmental performance management. The solutions are currently very fragmented – companies are using spreadsheets for a lot of this and that isn’t going to make it for enterprise reporting.”
Back in 1999 ESS saw this coming, as there was increasing demand from their customers to aggregate the EH&S data they were generating and managing with various ESS modules so they could report and manage the information at the enterprise level. They began development of the “Eco-Hub” which became the core of what is now a completely integrated set of modules. “BP, US Steel, DOW, and others were customers who we developed systems for which eventually led us to evolve this unified system. It takes years of work and millions in investment to develop these systems and to get them validated and tested by customers.”
The savings that accrue to companies who have standardized, automated environmental health and safety information that they can roll up to report and manage at a corporate level get bigger every year. Johnson summarized four areas where ESS software will deliver immediate savings:
- Investment funds now include in their investment criteria reporting on a company’s performance in environmental health and safety. How well companies manage EH&S is a good indication of how well they manage their financial controls as well as risk in general. There is now a direct connection between how a company manages EH&S and their ability to attract investors and capital.
- Managing EH&S means reducing events that cause injury and downtime. Unplanned events such as chemical or oil spills, plant explosions; these events can be prevented or reduced by putting in place best practice EH&S systems to lower risk. Accidents create immediate injury and harm but the financial costs continue during the shutdown and cleanup. EH&S systems reduce accidents and reduce downtime.
- When developing financial best practices, indirect costs often can only be explicitly evaluated using EH&S systems. For example, companies who buy chemicals for their operations historically evaluated these chemicals based on their raw cost. But by overlaying a toxicity index to this cost analysis, the costs of procedures to track, containerize and dispose of very toxic chemicals can be analyzed and added to the total cost, often delivering a different choice than what would have come out of a more primitive analysis.
- Just pure IT savings can be huge. ESS offers 14 different modules that cover the entire gamut of environmental health and safety issues, and they are all integrated. Most companies have addressed these tracking challenges at a tactical level. But there is increasing need for this information to be available not only for regulatory compliance at each plant, but in consolidated formats. Investors and Directors along with countless government agencies now require data that is totally rolled up for the corporation; aggregate emissions, total incident rates, and other corporate social responsibility indicators.
There are plenty of examples of clients purchasing ESS software and making immediate and substantial savings. In the largest installation ESS has done so far in North America, DOW Chemical replaced 160 different systems in 200 production sites with ESS solutions, after evaluating a variety of options to consolidate these systems. DOW saved over $2.0 million in the first year, just in direct IT expenses. They moved everything into ESS’s Eco-Hub; they literally poured all of the data from 160 different legacy systems into this single solution.
INTEGRATING THE ESS ECO-HUB WITH ORACLE’S ERP SYSTEMS
The interoperability of ESS software allows them to work with the
Oracle database, providing relevant data to existing Oracle ERP modules,
as well as integrate their own EH&S modules within Oracle’s ERP solution.
ESS’s largest installation to-date anywhere was for PetroChina, the largest company in China, with vertically integrated petrochemical operations throughout the country, from wells to refineries to retail outlets. As Johnson put it “they are using every module we’ve got, the entire integrated set, air, water, incident, hygiene, chemical inventory, incident tracking, all of them.” ESS’s software is the only application PetroChina has implemented across their entire organization, and they now have over 70,000 users on this system.
As EH&S has moved out of the individual manufacturing plants and onto the corporate center stage over the past few years, ESS has attracted the attention of major enterprise software vendors, and they work closely with most of the major companies, including Oracle, IBM, Microsoft and SAP. ESS software is platform independent and can run on any database.
Commenting on a recent announcement by ESS of “a unified applications platform for environmental sustainability” with Oracle, Johnson explained “we are tying in with their financial data, asset management, resource planning, and equipment monitoring [in addition to ESS providing their own 14 EH&S modules] because it is all related. EH&S is becoming integrated and critical to the overall IT infrastructure of companies.”