Business Monday

Create new profit margins by harnessing big data, real-time analytics

Dave Rath is the chief executive officer at ProcessMAP Corporation, a provider of cloud-based enterprise software solutions that has headquarters in Sunrise.
Dave Rath is the chief executive officer at ProcessMAP Corporation, a provider of cloud-based enterprise software solutions that has headquarters in Sunrise.

As today’s technology landscape continues to evolve and becomes more sophisticated than ever before, progressive companies are harnessing the power of big data and real-time analytics to strengthen its operations and improve their bottom lines. However, company leaders often overlook the inextricable link between health and safety and the bottom line, isolating it as an independent function. By prioritizing health and safety and integrating it with other programs across the company, business leaders can unlock hidden profit margins.

Protect profits by protecting people: Instead of waiting for a crisis to bolster a company’s safety culture, it’s important that CIOs lead their organization in taking preventative action now. The simplest way to achieve this goal is for CIOs to implement an enterprise software system to identify risk areas and prevent costly workplace safety incidents. CIOs and other key stakeholders, in turn, will be provided with greater visibility and insight into EHS performance — helping the company to avoid losing millions of dollars in penalties, fines and even shutdowns. Money invested now will inevitably translate into savings down the line. According to the National Safety Council, studies have shown that for every $1 invested in injury prevention, there is an expected return between $2 and $6.

Break down corporate silos: The corporate functions of risk, insurance and safety are often “siloed,” creating inefficiencies and limiting the ability for corporations to make decisions based on the complete informational picture. Companies are: 1) unarmed without tools to correlate data and derive actionable insights, 2) working across different, nonintegrated systems, and 3) are not effectively communicating with one another.

CIOs are positioned to integrate disparate data — both internally and externally — into actionable insights. Leveraging an integrated platform enables companies to connect what would otherwise be uncorrelated data, including claims information, employee demographics, incident root cause and financial information. Correlated data, enabled by real-time data and a robust analytics toolset, advances companies from proactive to reactive, which translates into improved profit margins.

Create new profit margins through decreased claims: Last June, the Florida 3rd District Court of Appeal dismissed Miami-Dade Circuit Judge Jorge Cueto’s ruling that the state’s workers’ compensation system is unconstitutional. And while arguably, Florida’s workers’ compensation benefits can be considered low, they still can take a large chunk out of a company’s profits. According to OSHA, “nearly 4 million workers are seriously injured on the job each year.” This number translates into an estimated $50 billion in workers’ compensation claims for companies — and doesn’t even factor in penalties, which can range up to $7,000 for each serious violation and up to $70,000 for each willful or repeated violation. What’s also important for CIOs to remember is that for every dollar in workers’ compensation claims, approximately $3 must be kept in reserves. So, for a company managing $20 million in claims, on average, $60 million will also be held aside. That’s $80 million not being utilized, taken away from a company’s profit margins. In industries with already low profit margins, like retail, this number can truly make or break a business.

Companies need to move beyond just capturing and reporting data, toward implementing an enterprise software systems that converts information into actionable insights that will help optimize risk mitigation, drive efficiencies and achieve safety excellence. With the help of big data, analytics and detail safety data such as cause of incidents, even a 10 percent decrease in claims can translate into millions of dollars in added profit margins. Moreover, by assessing the types and frequencies of injuries common to its business environments, CIOs can then use this information toward implementing proactive change, such as introducing behavioral modifications through ergonomics programs and conducting job safety risk assessments to fully analyze every job and their individual controls to reduce potential hazards and risk.

Dave Rath is the chief executive officer at ProcessMAP Corporation, a provider of cloud-based enterprise software solutions that has headquarters in Sunrise.

Have a ‘My View?’

If you have a point of view on a business topic you would like to share, consider writing about it for Business Monday. Pitch your idea to Guidelines: Submissions should be around 600 words; should state a topic clearly, with supporting examples; and use examples drawn from South Florida. They should also be accompanied by a photo of the writer, emailed as a jpeg. ‘My View’ submissions that are accepted are published as space allows.