To help companies maximize their physical assets and make them return the most, they need to have an in-depth understanding of their assets and the risks involved. Businesses could make poor decisions without a good understanding of the risks. This can end up affecting their bottom line. Lack of a solid process for managing assets and risk could expose businesses to fines from regulators or lose profits due to insufficient planning.
The most frequent and significant challenges to asset and risk management include:
Unawareness of the capabilities of the asset and risk management assets of an organization – For instance, employees may not be aware that a piece of equipment could perform a task outside of its designed range or know how to make it operate at maximum efficiency. This can lead to underutilisation of the asset as well as a diminished ROI throughout its lifecycle. This can be reduced by ensuring that employees receive proper training to understand the capabilities of the asset and how to utilize it appropriately.
Insufficient risk management system – since the financial crisis, a lot of companies have not had the time to think about strategic risk. This has resulted in inadequate risk management strategies, inaccurate risk assessments, and missed opportunities to optimize the company’s assets.
Third-party risk from cyber security to reputational and data integrity Third-party risks can result in serious consequences for organizations. To reduce the risk of this kind, a robust vendor vetting process should be in place with failsafe protocols in place to ensure that every vendor is properly vetted.
