Common Challenges to Asset and Risk Management

To maximize their physical assets and to ensure they yield the best ROI, businesses must have a firm grasp on their assets as well as the risks involved. Without a clear knowledge of the risks companies could make ill-informed decisions that could harm their bottom line. A lack of a robust process for managing assets and risk could expose businesses to fines from regulators or lose profits due insufficient planning.

The most prevalent and significant issues affecting managing risk and assets include:

Inadequate the importance of asset management awareness of what an organization’s assets are capable of For instance employees might not know that a specific piece of equipment has the capability to perform a function that is beyond its designed range or how to operate it at the highest efficiency. This can result in underutilization of the asset as well as a lower ROI over the course of its life. This can be minimized by ensuring that employees are trained to understand an asset’s capabilities and how to utilize them in a way that is appropriate.

Lack of robust risk management process – Since the financial crisis, a lot of businesses have had no time to think about strategic risk. This has led to inadequate risk management strategies, inaccurate risk assessments, and missed opportunities to optimize the company’s assets.

Third-party risk from cybersecurity to data integrity and reputational damage, third-party risks can have devastating consequences for an organization. To minimize this risk, a robust verification process involving failsafe procedures should be implemented to ensure that every vendor has been certified.