Common Challenges to Asset and Risk Management

To optimize their physical assets, and to make them deliver the best ROI, businesses need to have a solid grasp on their assets and the risks that come with it. Companies can make bad decisions in the absence of an understanding of the risks. This can ultimately hurt their bottom line. Insufficient risk and asset management process can expose companies to regulatory fines or loss profits due to poor planning.

Management of risk and assets is confronted by a range of issues.

Unawareness of the capabilities of the assets of an organization – For instance, employees might not be aware that an item can perform a function outside the scope of its design or how to operate it at its highest efficiency. This can cause the asset to be inefficient and result in an unsatisfactory ROI over its lifespan. This can be reduced by ensuring that employees are educated about the capabilities of an asset and how to utilize them appropriately.

Lack of a robust risk management process – Since the financial crisis, many companies have had little time to think about strategic risk. This has led to poor strategies for managing risk, faulty methods for assessing risk, and forgone opportunities to optimize the performance of an organization’s assets.

Third-party risk – From cyber security to reputational damage and data integrity Third-party risks could have severe consequences for organizations. To mitigate the risk of this kind an effective vendor vetting process must be in place with failsafe protocols in place to ensure every vendor is properly vetted.

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