Determining the Value of SMS

Determining the Value of SMS


This document is for safety professionals who understand that the investment in safety interventions and Safety Management Programs are necessary to ensure safe operations. Safety professionals and their economic partners know the human and financial impact of a serious event or accident. Prevention of such loss is the return on the safety investment. However, return on investment is also impacted by operational savings like adherence to schedules, satisfied customers, healthier workplaces and employees, less engineering rework, and increased cooperation with authorities, to name a few examples. This document clarifies the steps needed for the safety professional to calculate return on investment. The math is simple; however, the complexity lies in balancing your costs with the value of events that did not happen—the intangible high value of safe operations. The document helps all parties better appreciate and calculate both the cost and the value of safety.

The term “Return-on-Investment” (ROI) or Cost-Benefit Analysis is more likely to be used on an economist’s spreadsheet than in a meeting of safety professionals. Today’s aviation business organizations do not have the option of separating finance from safety. Economics/profit and safety are mutually inclusive; you cannot have one without the other.

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