Common Challenges to Asset and Risk Management
To optimize their physical assets and to ensure they yield the highest ROI, businesses need to have a solid grasp on their assets and the risks they pose. Without a strong understanding of the risk environment companies could make ill-informed choices that will ultimately hurt their bottom line. A lack of a robust process for managing risk and assets can expose businesses to costly fines from regulators or lost profits due to insufficient planning for the unexpected.
The management of risk and assets is faced with a range of challenges.
Unawareness about the capabilities of an organization’s assets – For instance, employees may not be aware that an item can perform a job outside its designed range or know how to operate it to maximum efficiency. This can result in underutilization of the asset and lower ROI over the course of its life. This can be mitigated by ensuring that employees are trained to be aware of the capabilities of an asset and how to use the asset in a proper manner.
Lack of robust risk management processes – Since the financial crisis, a lot of companies have had little time to think about strategic risk. This has resulted in suboptimal strategies for managing risk, faulty methods of assessing risk and missed opportunities to maximize the performance of the assets of an organization.
Third-party risk from cybersecurity to reputational damage and integrity of data Third-party risks can have serious consequences for organizations. To reduce this kind of risk an effective process for vetting vendors should be established with failsafe procedures in place to ensure that all vendors are properly approved.
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