Common Challenges to Asset and Risk Management

To maximize their physical assets and to make them deliver the highest ROI, businesses must have a clear grasp on their assets and the risks that come with it. Without a thorough understanding of the risk environment companies could make ill-informed choices that will ultimately hurt their bottom line. A lack of a robust process for managing risk and assets can expose companies to regulatory fines or loss profits due to poor planning.

The most common and significant challenges to managing risk and asset management are:

Inadequate awareness of the capabilities of the assets of an organization – For instance, employees might not be aware that an item could perform a task outside of the scope of its design or how to operate it at its highest efficiency. This could lead to underutilization of the asset and reduced ROI throughout its lifespan. This can be mitigated by ensuring employees are properly educated to know the capabilities of an asset and how to utilize the asset in a proper manner.

Lack of a solid process to manage risk – The constant stream of compliance requirements that have flooded into the industry since the financial crisis have caused many companies to have little time to think about strategic risk management. This has resulted in inadequate risk management strategies, incorrect risk assessments and missed opportunities to optimize the company’s assets.

Third-party risk – From cyber security to reputational damage and integrity of data Third-party risks can result in significant consequences for an organization. To mitigate the risk of this kind it is essential to have a thorough vendor vetting process must be established with failsafe procedures in place to ensure each vendor is properly vetted.

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