Common Challenges to Asset and Risk Management

To maximize the value of their physical assets and make them yield the highest ROI, they need to have a firm grasp on both their assets as well as the risks that come with them. Businesses could make poor decisions without an accurate understanding of risks. This can end up affecting their bottom line. Lack of a solid process for managing risk and assets could expose companies to costly regulatory fines or lost profits due to insufficient planning for the unforeseeable.

Asset and risk management is faced with a range of challenges.

Unawareness of what an organization's assets can do – For example employees may not be aware that a specific piece of equipment is able to perform a function that is beyond its original scope or to make it operate at its the highest efficiency. This could cause the equipment to be underutilized and have a reduced return on investment over its life. This can be mitigated by ensuring that employees have adequate training to comprehend the capabilities of an asset and how to utilize it appropriately.

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, inaccurate risk assessments and missed opportunities to optimize an organization's assets.

Third-party risk – From cyber security to reputational damage and data integrity Third-party risks can result in significant consequences for an organization. To mitigate the risk of this kind it is essential to have a thorough vendor vetting process should be in place with failsafe protocols in place to ensure all vendors are properly approved.

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