Common Challenges to Asset and Risk Management

To maximize the value of their physical assets and make them deliver the best ROI, they need to have an understanding of both their assets as well as the risks that come with them. Companies can make bad decisions when they don’t have a good understanding of the risks. This can end up affecting their bottom line. Insufficiently implemented asset and risk management process could expose companies to costly fines from regulatory agencies or loss of profits due to inadequate plan for the unpredictable.

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

Unawareness of the capabilities of an organization’s assets – For instance, employees may not be aware that an item can perform a job outside its intended range or how to operate it at its highest efficiency. This can result in underutilization of the asset as well as a diminished ROI throughout its lifecycle. This can be reduced by ensuring employees are properly educated to know the capabilities of an asset and how to use them in a way that is appropriate.

Lack of a robust process for managing risk – The constant demand for compliance that have flooded into the industry since the financial crisis have left many companies with no time to think about strategic risk factors. This has led to suboptimal risk management strategies, inaccurate risk assessments, and missed opportunities to maximize the value of an organization’s assets.

Third-party risk from cyber security to reputational damage and integrity of data Third-party risks can result in severe consequences for organizations. To reduce the risks associated with this type of threat an effective vendor vetting process must be established with failsafe procedures in place to ensure every vendor is properly vetted.

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