Common Challenges to Asset and Risk Management

To maximize their physical assets, and to ensure that they deliver the highest ROI, businesses must have a clear grasp on their assets and the risks that come with it. Without a clear understanding of the risk environment, businesses may make unfounded decisions that end up harming their bottom line. Insufficient process for managing assets and risk can leave organizations vulnerable to regulatory fines and loss of profits due to poor planning.

The management of risk and assets is confronted by a range of issues.

Unawareness of what a company’s assets are capable of – For example employees may not be aware that a piece of equipment has the capability to perform a job beyond its intended range or to operate it with the highest efficiency. This could cause the equipment to be underutilized and have an inferior ROI over its lifespan. This can be mitigated by ensuring employees are properly trained to be aware of the capabilities of an asset and how to use them effectively.

A lack of a robust 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 poor risk management strategies, incorrect risk assessments and missed opportunities to optimize an organization’s assets.

Third-party risk – From cyber security to data integrity, and reputational damage can have significant implications for an organization. In order to mitigate this type of risk, a robust vendor vetting procedure should be established with failsafe procedures in place to ensure that all vendors are properly vetted.

the importance of asset management