Compliance is a very important thing, but it’s far from the only thing when it comes to true Operational Excellence.
It takes a true integrated risk management strategy to ensure your organization is performing safely, efficiently and profitably. When properly planned and executed, an integrated risk management plan can appropriately balance all of these factors.
There’s a handy calculator on the U.S. Occupational Safety and Health Administration’s website that explains the direct and indirect costs of a workplace-related injury. Take a burn incident as an example. OSHA, as part of its “$afety Pays Program” estimates the average direct cost of a burn accident at about $40,000. It also lists the average indirect costs, which could include OSHA fines, legal costs, etc., at roughly an additional $44,000 for a grand total of about $84,000. And that’s only the beginning.
OSHA estimates the total costs at about $2.8 million when you add in things like wages paid to injured workers during absences, work stoppages and lost productivity.
That figure doesn’t even include the potential loss of reputational value that becomes a true operational risk should an accident take place at the workplace and the story winds up on the 6 o’clock news.
Much like healthcare’s evolving focus on preventive care, Environmental Health & Safety has been heading in the direction of preventing incidents through predictive and prescriptive analytics. To keep workers safe, products sustainable and operations productive, more and more companies have been turning to an integrated risk management approach that eliminates the siloed method of yesteryear that many businesses still rely on to track incidents and manage their operational risk.
Indeed, a recent Gartner report predicts that the market for integrated risk management solutions is set to hit $7.3 billion by 2020, and more than 50 percent of large enterprises will be turning to integrated risk management systems by 2021—up from 30 percent today.
As Gartner explains, “Integrated risk management enables simplification, automation and integration of strategic, operational and IT risk management.”
So why is Integrated risk management the wave of the future?
Simply put, it’s because it allows companies to use today’s state-of-the art technology to their competitive advantage by employing Internet of Things technology to track more data, mobile technology to give workers the ability to document incidents and near-misses on the spot and then uses all that information to create prescriptive analytics that helps businesses better understand the risks before they are transformed into actual incidents.
Ignoring the potential benefits of integrated risk management is a risk that’s not worth taking.