To maximize their physical assets, and to ensure they yield the highest ROI, companies must have a firm grasp on their assets as well as the risks they pose. Businesses may make poor decisions without an accurate understanding of risks. This can end up affecting their bottom line. Insufficient risk and asset management process can expose companies to fines from regulators or lose profits due to poor planning.
The management of risk and assets is faced with a number of challenges.
Unawareness about the capabilities of the assets of an organization. For instance, employees may not be aware that an item could perform a task outside of its designed range or know how to operate it to maximum efficiency. This could cause the equipment to be underutilized and have an unsatisfactory ROI over its lifetime. This can be avoided by ensuring that employees receive proper training to understand the capabilities of the asset and how to utilize it appropriately.
Lack of a robust process for managing risk – The continuous demand for compliance that have flooded the industry since the financial crisis have left many companies with little time to consider strategic risk management. This has led to inadequate strategies for managing risk, faulty risk assessment methodologies and missed opportunities to optimize the performance of an organization’s assets.
Third-party risk from cybersecurity to reputational and data integrity Third-party risks can have serious consequences for organizations. To limit this kind of risk, a rigorous screening process that includes failsafe procedures must be implemented to ensure that every vendor has been accepted.