Common Challenges to Asset and Risk Management

To maximize their physical assets and to ensure they provide the best ROI, businesses need to have a solid grasp on their assets and the risks they pose. Without a strong understanding of the risk environment businesses could make rash choices that will ultimately hurt their bottom line. Insufficiently developed process for managing risk and assets could expose companies to costly regulatory fines or losses due to insufficient planning for the unforeseeable.

The management of risk and assets is confronted with a variety of issues.

Unawareness about the capabilities of the assets of an organization. For instance, employees may not be aware that an item could perform a task outside of the scope of its design or how to operate it to maximum efficiency. This could cause the equipment to be inefficient and suffer an inferior ROI over the course of its life. This can be reduced by ensuring that employees have adequate training to comprehend the capabilities of an asset and how to use it appropriately.

Lack of robust risk management procedures – Ever since the financial crisis, many businesses have had no time to think about strategic risk. This has resulted in inadequate risk management strategies, ineffective risk assessments and missed opportunities to optimize the assets of an organization.

Third-party risk from cyber security to reputational damage and integrity of data, third-party risks can have devastating consequences for an organization. To minimize this threat, a thorough vetting process with failsafe procedures must be in place to ensure that every vendor has been certified.