Common Challenges to Asset and Risk Management

To help companies maximize their physical assets and help them provide the highest ROI they must have a an accurate understanding of their assets and the risks associated with them. Without a strong understanding of the risk environment businesses could make rash decisions that end up harming their bottom line. Insufficient process for managing risk and assets can leave organizations vulnerable to regulatory fines or loss profits due to insufficient planning.

The management of risk and assets is faced with a number of challenges.

Inadequate awareness of the capabilities of the assets of an organization. For instance, employees might not be aware that a piece of equipment is able to perform a function that is not within the scope of its design or how to make it operate at maximum efficiency. This can result in underutilization of the asset and a diminished ROI throughout its lifecycle. This can be avoided by ensuring that employees receive adequate training to comprehend the capabilities of the asset and how to utilize it effectively.

A lack of a comprehensive process for managing risk – The constant stream of compliance demands that have flooded into the industry since the financial crisis have left many companies with a lack of time to think about strategic risk management. This has led to inadequate risk management strategies, incorrect risk assessments, and missed opportunities to optimize an organization’s assets.

Third-party Risks – From cyber-security to data integrity, and reputational damage can have profound implications for an organization. To reduce the risk, a robust procedure for vetting with failsafe protocols should be implemented to ensure that all vendors have been recognized.

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