Common Challenges to Asset and Risk Management

To ensure that companies can maximize their physical assets and help them provide the highest ROI, they need to have a firm grasp on both their assets as well as the risks that come with them. Businesses can make poor choices if they don’t have an understanding of the risks. This could ultimately affect their bottom line. Insufficiently implemented asset and risk management process can also leave organizations exposed to costly regulatory fines or loss of profits due to inadequate preparation for the unexpected.

The most frequent and significant problems with asset and risk management include:

Unawareness about the capabilities of the assets of an organisation – For instance, employees might not be aware that an item could perform a task outside of its designed range or know how to operate it at its highest efficiency. This could result in under-utilization of the asset and a decreased ROI throughout its lifetime. This can be mitigated by ensuring that employees have adequate training to comprehend the capabilities of an asset and how to utilize it appropriately.

Lack of robust risk management procedures – Ever since the financial crisis, many companies have had little time to think about strategic risk. This has led to poor risk management strategies, incorrect risk assessments, and missed opportunities to maximize an organization’s assets.

Third-party risk from cybersecurity to reputational damage and data integrity Third-party risks can result in significant consequences for an organization. To reduce this kind of risk the need for a robust vendor vetting procedure should be implemented with failsafe procedures in place to ensure that all vendors are properly approved.