Common Challenges to Asset and Risk Management

To help companies maximize their physical assets and help them deliver the best ROI they must have a an in-depth understanding of their assets and the risks associated with them. Businesses could make poor decisions without a good understanding of the risks. This could ultimately affect their bottom line. A lack of a comprehensive risk and asset management system could expose businesses to regulatory fines or loss profits due insufficient planning.

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

Unawareness of the capabilities of the assets of an organization. For instance, employees may not be aware that a piece of equipment can perform a job outside its intended range or how to operate it to maximum efficiency. This can cause the asset to be underutilized and have an inferior return on investment over its life. This can be mitigated by ensuring that employees have proper training to understand the capabilities of the asset and how to utilize it effectively.

Lack of robust risk management processes – Since the financial crisis, a lot of firms have had little time to think about strategic risk. This has led to suboptimal risk management strategies, ineffective methods for assessing risk and missed opportunities to improve the performance of the assets of an organization.

Third-party risk – From cyber security to integrity of data and reputational damage can have profound implications for a business. In order to mitigate this kind of risk an effective vendor vetting process should be put in place with failsafe processes in place to ensure that each vendor is properly vetted.

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