Common Challenges to Asset and Risk Management

To optimize their physical assets, and to ensure they provide the best ROI, businesses must have a clear understanding of their assets as well as the risks associated with them. Without a strong knowledge of the risks businesses could make rash choices that will ultimately hurt their bottom line. Lack of a solid process for managing risk and assets could leave companies vulnerable to regulatory fines or even loss of profits due insufficient planning.

The most prevalent and significant issues affecting managing risk and asset management are:

Unawareness of what the organization’s assets are capable of – For example employees might not know that a certain piece of equipment has the capability to perform a job beyond the scope of its design or to operate it with maximum efficiency. This can lead the asset to be inefficient and suffer a reduced ROI over its lifespan. This can be reduced by ensuring that employees are trained to be dig this aware of the capabilities of an asset and how to utilize them effectively.

Lack of a robust process for managing risk – The constant demand for compliance that have flooded the sector since the financial crisis have caused many companies to have little time to consider strategic risk considerations. This has led to poor risk management practices, inaccurate risk assessments and missed opportunities to optimize an organization’s assets.

Third-party risk – From cybersecurity to data integrity and reputational damage Third-party risks can have severe consequences for organizations. To minimize this threat, a thorough procedure for vetting with failsafe protocols should be implemented to ensure that every vendor has been certified.