EM Feature

16 June 2002EM

EMEMFeature

INTRODUCTIONCompanies typically take one of two approaches when decid-ing to implement an environmental, health, and safety (EH&S)management information system (EMIS). Some companiessimply embrace the enterprise resource planning (ERP) ideol-ogy; that is, they integrate their EMIS solution with other busi-ness processes across the organization. Since EH&S datagathering is pervasive throughout the supply chain, these com-panies find that it makes sense to embed the EH&S processesand data collection within other business processes. Othercompanies use EH&S processes that are separate from busi-ness processes. In this case, the companies use point solutionsto gather data and interface with business processes. In bothapproaches, the companies employ an EMIS, but in the firstcase, the data gathering occurs within the business processes,while in the second case, the company collects data “after thefact” for a discrete part of the business.

In either case, companies can gain significant business ben-efit by implementing an EMIS. When an EMIS is used in con-junction with existing business processes, however, companies

by Lorie Buckingham

This article considers two

approaches companies can take

when choosing to implement an

EH&S management information

system: fully integrate EH&S

systems within the business supply

chain or leverage them as surround

point solutions.

will experience benefits related to improved product safetyand EH&S reporting. Integrating an EMIS into the overall busi-ness process will also facilitate EH&S decision-making, sinceEH&S data can be gathered and reviewed as business processesare occurring (i.e., in “real time”). Companies will experiencesimilar benefits if discreet EH&S practices are not integratedwith the overall business process, but the down side is thatthere will be a certain amount of lag time before the data canbe retrieved and reviewed. This article presents the businesscase for implementing an EMIS.

MAKING EMIS A PRIORITYWhen corporate managers choose to implement managementinformation systems, they naturally consider financial and otherbusiness goals, such as enabling growth, managing risk, im-proving quality, reducing costs, and improving accuracy andassociated decision-making. EH&S management often takes aback seat, although EH&S data overlaps into many other busi-ness practices and when utilized fully can offer true businessvalue. For example, safety information is used every day within

Making a

Case for

Implementing

an EMIS

Making a

Case for

Implementing

an EMIS

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18 June 2002EM

the supply chain. The purchasing staff orders hazardousmaterials and ensures that the company has the most recentMaterial Safety Data Sheets (MSDS). Employees who work withcertain hazardous materials need access to the MSDS and, byjob function, may be required to undergo annual physicalexaminations because they handle these materials. Hazardousmaterial exposure data require information, such as thechemical properties, the location where material is used in

Figure 1. EMIS with point applications.

operations, the personnel assignments, and the ap-plicable human resources data. Waste and emissionsmanagement is essential for reporting, but it canalso enable the business to predict problems andadjust production to the benefit of the overall en-terprise. With an integrated EMIS and proper datasecurity, companies can access hazardous material,waste and emissions, and safety data from one sourcerather than duplicating data in disparate systems.The enterprise can then effectively manage this datato the overall benefit of the company.

Whether organizations apply the ERP conceptacross much of the business and embed EH&S datagathering within these processes through an EMISsolution (see Figure 1) or use a variety of point ap-

plications interfaced to a central EMIS solution (see Figure 2),they can derive numerous benefits from EMIS implementation.

The benefits of implementing an EMIS with point applica-tions include

• capability to gather information in a central databasefor review and analysis, which enables the organiza-tion to determine problems and to react proactivelyacross the enterprise;

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• simplified reporting via inter-nal and external informationrequirements;

• company-wide oversight ofEH&S data to ensure appropri-ate compliance and cost avoid-ance; and

• flexibility to adapt to chang-ing regulatory reporting re-quirements.

The benefits of implementing a fullyintegrated EMIS with ERP include

• capability to gather and inputinformation at the source,thereby reducing the cost ofdata collection and enablingproactive decision-making andrapid error correction;

• real-time data reporting and de-velopment of forward-looking metrics to extend beyondcompliance into proactive responsible care management;

• reduced risk of data duplication and human error;• company-wide investment in and accountability for

EH&S oversight to ensure appropriate compliance andcost avoidance; and

• enterprise-wide flexibility to adapt to regulatory ororganizational changes.

Figure 2. EMIS with ERP.

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DEVELOPING THE BUSINESS CASE FOREMIS IMPLEMENTATIONSince EH&S management information solutions may not beas high-profile as, say, data management systems for otherbusiness practices, environmental staff must develop a strongbusiness case to demonstrate the benefits of implementing anEMIS to corporate management. The first step is to determinewho will develop the business case. Information technology(IT) personnel can provide valuable input about the company’sIT architecture and how to integrate an EMIS seamlessly intothat structure. However, IT professionals typically lack the en-vironmental background necessary to sell management on thefull benefits of an EMIS. The company’s EH&S staff certainlyhas the expertise to explain the environmental data that anEMIS can handle, but they generally lack broad exposure tothe supply chain. Without this knowledge, EH&S profession-als cannot adequately illustrate how an EMIS can serve as anenterprise-wide resource for sharing information and improvingregulatory compliance practices across the organization. Toeffectively develop a business case for implementing an EMIS,companies need to form a comprehensive team of stakehold-ers, which includes IT staff, EH&S staff, and business manag-ers. Companies may also hire an outside firm that specializesin EMIS development to help decision-makers understand thebenefits. Whomever presents the EMIS proposal, two mainpoints must be stressed: How EH&S practices fit within thebusiness operation and how EH&S practices fit into the supplychain. Demonstrating these two concepts, as part of a compre-hensive discussion of the benefits that an EMIS can provide,will help make a strong case for EMIS implementation.

When proposing EMIS implementation to management, thepresentation should include a high-level operating model withclear benefits points. In addition, a mock-up EMIS that is cus-tomized to the particular industry to which the company be-longs and personalized with the company’s mock data shouldbe designed. It can be difficult to visualize how an EMIS solu-tion will work once implemented; therefore, customizing thesystem with databases and other tools that are specific to theorganization will give corporate decision-makers a realistic rep-resentation of the system’s overall capabilities and benefits.

Finally, the business case for EMIS must include strategicand tactical components. The strategy may include concretegoals for EMIS implementation, such as to embed the EH&Sdata gathering in specific work processes. The strategy shouldalso indicate whether the company will take a phased or a par-allel approach to implementing the system. In addition, thestrategic component should consist of plans for how to growand nurture the EMIS over the long term. New or amendedenvironmental regulations will force changes to certain data-bases, as will changes in staffing, accounting procedures, andother business practices. The EMIS must be able to evolve withthe company. The tactical component should assess the

personnel, time, hardware, software, and other resources nec-essary to implement and maintain the proposed EMIS solution.Corporate decision-makers must be aware of the internal capi-tal that an EMIS will require. To help you decide if an EMIS isright for your business, a brief example of one company’s moti-vations for choosing an EMIS solution is provided below.

EXAMPLE EMIS IMPLEMENTATIONA major company sought to integrate its EH&S data systemsacross the organization. The company embraced the ERP con-cept and utilized enterprise-wide information management sys-tems for other business practices. Recognizing similar potentialin its environmental practices, the company chose to imple-ment an EMIS solution. This organization represents the typeof company that pursues an EMIS based on its determinationto have enterprise-wide solutions. As such, the company imple-mented management of its product safety data by integratingan EMIS within the business supply chain. For example, whencustomers ordered a product, the system automatically deter-mined if they had ordered it before and, if so, retrieved theMSDS. If not, the system sent the corresponding MSDS to thecustomer. In addition, if the MSDS had changed, or more thana year had passed since the previous order, the system wouldautomatically send a new, updated MSDS to the customer.

In another example, the same company implemented man-agement of its waste and emissions data as an enterprise EMISwith point application interfaces. The company interfaced EH&Sdata from plant-specific production systems with a central EMIS,which allowed the company to review and analyze data for eachindividual plant and enterprise-wide. The EMIS both improvedregulatory reporting efficiency and enabled proactive managementof emissions. As a result, the company achieved significant ben-efits by using the EMIS with ERP for product safety and an EMISwith point applications for waste and emissions management.

CONCLUSIONOrganizations will most likely have different justifications forchoosing an EMIS solution, based on the state of their exist-ing point or enterprise ERP solutions. Regardless of the rea-sons, EH&S staff and other stakeholders must present a strongbusiness case for implementing an EMIS to corporate deci-sion-makers. Armed with comprehensive information aboutthe benefits that an EMIS can provide, corporate managementwill be able to make an informed decision about how to stream-line and automate EH&S data across the organization and im-prove the overall business competitiveness.

About the Author

Lorie Buckingham is director of enterprise software solutions atVisteon Corporation, a global automotive supplier with headquar-ters in Dearborn, MI. Buckingham has led several major enterpriseimplementations of ERP and EMIS solutions.