Common Challenges to Asset and Risk Management

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To help companies maximize their physical assets and make them provide the highest ROI it is essential to have a an in-depth understanding of their assets as well as the risks that come with them. Businesses can make poor choices in the absence of a good understanding of the risks. This can ultimately hurt their bottom line. Insufficiently implemented process for managing risk and assets can also leave organizations exposed to costly fines and penalties from regulators or losses because of insufficient plan for the unpredictable.

The most prevalent and significant problems with asset and risk management include:

Unawareness of what the organization’s assets can do For instance employees might not know that a particular piece of equipment has the capability to perform a task beyond its original scope or to operate it at maximum efficiency. This could cause the equipment to be underutilized and have an unsatisfactory return on investment over its life. This can be mitigated by ensuring that employees receive proper training to understand the capabilities of an asset and how to use it in a responsible manner.

Insufficient risk management procedures – Ever since the financial crisis, a lot of businesses have had no time to think about strategic risk. This has led to suboptimal risk management strategies, incorrect risk assessment methods and missed opportunities to maximize the performance of the assets of an organization.

Third-party Risks ranging from cyber-security to integrity of data, and reputational damage could have huge implications for an organization. To limit this kind of risk, a thorough screening process that includes failsafe procedures should be implemented to ensure that all vendors have been approved.

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