To maximize their physical assets, and to ensure they provide the highest ROI, businesses require a thorough understanding of their assets and the risks they pose. Businesses may make poor decisions when they don’t have an adequate understanding of the risks. This can end up affecting their bottom line. A lack of a robust risk and asset management system could expose businesses to fines from regulators or lose profits due insufficient planning.
The most frequently encountered and significant challenges to managing risk and asset management are:
Unawareness of what an organization’s assets can do For instance employees may not be aware that a piece of equipment is able to perform a task beyond its original scope or to operate it at maximum efficiency. This can result in underutilization of the asset and decreased ROI throughout its lifetime. This can be avoided by ensuring that employees receive sufficient training to be aware of the capabilities of the asset and how to use it properly.
Lack of robust risk management procedures – Ever 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 risk assessments and missed opportunities to maximize the assets of an organization.
Third-party risk – From cyber security to reputational damage and integrity of data, third-party risks can have severe consequences for organizations. To minimize this risk, a thorough verification process involving failsafe procedures should be put in place to ensure that all vendors have been accepted.