Common Challenges to Asset and Risk Management

To ensure that companies can maximize their physical assets and help them provide the highest ROI it is essential to have a an in-depth understanding of their assets and the risks associated with them. Without a clear knowledge of the risks, businesses may make unfounded decisions that ultimately harm their bottom line. Insufficiently implemented process for managing risk and assets can also leave organizations exposed to costly regulatory fines or losses because of inadequate planning for the unexpected.

The most common and significant challenges to asset and risk management include:

Unawareness of what a company’s assets can do – For example employees may not be aware that a piece of equipment is able to perform a function that is beyond its original scope or to operate it at maximum efficiency. This could result in under-utilization of the asset, and a lower ROI over the course of its life. This can be reduced by ensuring that employees are educated to know the capabilities of an asset and how to use them effectively.

Insufficient risk management procedures – Ever since the financial crisis, a lot of companies have not had the time to think about strategic risk. This has led to suboptimal risk strategies, inaccurate risk assessment methods, and forgone opportunities to improve the performance of the assets of an organization.

Third-party Risk – From cyber-security to integrity of data and reputational damage can have profound implications for a business. To mitigate this type risk, a robust procedure for vetting with failsafe protocols must be implemented to ensure that all vendors have been properly approved.

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