Common Challenges to Asset and Risk Management

To optimize their physical assets, and to ensure that they deliver the highest ROI, businesses must have a clear grasp on their assets as well as the risks that come with it. Companies can make bad decisions when they don’t have an understanding of the risks. This can end up affecting their bottom line. A lack of a robust asset and risk management process could expose companies to costly fines from regulatory agencies or losses because of inadequate planning for the unforeseeable.

The most prevalent and significant challenges to asset and risk management include:

Unawareness about the capabilities of the assets of an organization – For instance, employees might not be aware that a piece of equipment can perform a function outside the scope of its design or how to operate it at its highest efficiency. This can lead to underutilisation of the asset, and a lower ROI over the course of its life. This can be mitigated by ensuring that employees are trained to understand the capabilities of an asset and how to use them appropriately.

Lack of a robust risk management process – Since the financial crisis, a lot of companies have not had the time to think about strategic risk. This has led to inadequate risk management practices, inaccurate risk assessments, and missed opportunities to maximize an organization’s assets.

Third-party Risk – From cyber-security to integrity of data, and even reputational damage can have significant implications for an organisation. To minimize the risks associated with this type of threat it is essential to have a thorough vendor vetting process must be implemented with failsafe procedures in place to ensure each vendor is properly vetted.