Common Challenges to Asset and Risk Management
For companies to optimize their physical assets and make them deliver the best ROI it is essential to have a an understanding of both their assets as well as the risks that come with them. Businesses could make poor decisions when they don’t have an adequate understanding of the risks. This can ultimately hurt their bottom line. A lack of a comprehensive risk and asset management system can expose companies to regulatory fines or loss profits due to insufficient planning.
Management of risk and assets is faced with a number of issues.
Unawareness of what an organization’s assets can do For instance employees may not be aware that a piece of equipment has the capability to perform a job beyond its intended range or to operate it at maximum efficiency. This could cause the asset to be neglected and thus have an unsatisfactory ROI over the course of its life. This can be prevented by ensuring that employees are trained to be aware of an asset’s capabilities and how to utilize them appropriately.
Insufficiently developed processes for managing risk – The continuous stream of compliance requirements that have flooded the sector since the financial crisis has caused many companies to have little time to consider strategic risk considerations. This has led to poor risk management strategies, incorrect risk assessment methods, and forgone opportunities to optimize the performance of the assets of an organization.
Third-party Risks ranging from cyber-security to integrity of data, and even reputational damage can have profound implications for a business. In order to mitigate this kind of risk it is essential to have a thorough vendor vetting process must be in place with failsafe protocols in place to ensure that each vendor is properly vetted.