Common Challenges to Asset and Risk Management

To maximize their physical assets, and to ensure that they deliver the best ROI, businesses need to have a solid grasp on their assets as well as the risks that come with it. Without a thorough understanding of the risk environment businesses can make rash decisions that ultimately harm their bottom line. A lack of a robust process for managing risk and assets could expose companies to costly fines from regulatory agencies or lost profits due to insufficient planning for the unexpected.

Management of risk and assets is confronted with a variety of issues.

Unawareness of what a company's assets can do – For example employees might not know that a specific piece of equipment is able to perform a function beyond the scope of its design or to operate it at the highest efficiency. This could result in under-utilization of the asset as well as a lower ROI over the course of its life. This can be reduced by ensuring that employees have sufficient training to be aware of the capabilities of the asset and how to use it effectively.

A lack of a comprehensive process to manage risk – The continuous stream of compliance requirements that have flooded the market since the financial crisis has left many companies with a lack of time to consider strategic risk considerations. This has resulted in inadequate risk management strategies, ineffective risk assessments, and missed opportunities to optimize the assets of an organization.

Third-party Risk – From cyber-security to integrity of data and reputational damage can have profound implications for an organisation. To mitigate the risks associated with this type of threat an effective vendor vetting process should be in place with failsafe protocols in place to ensure all vendors are properly approved.

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