For companies to optimize their physical assets and help them return the most they must have a an in-depth understanding of their assets and the risks involved. Without a solid understanding of the risk environment companies could make ill-informed decisions that could harm their bottom line. Insufficiently implemented asset and risk management process can expose businesses to costly fines from regulators or lost profits because of insufficient preparation for the unexpected.
The most prevalent and significant challenges to managing risk and assets include:
Unawareness of 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 intended range or how to use it to its maximum efficiency. This could lead to underutilization of the asset, and a diminished ROI throughout its lifecycle. This can be mitigated by ensuring that employees receive the proper education to understand the capabilities of an asset and how to utilize it in a responsible manner.
Lack of a robust risk management processes – Since the financial crisis, many companies have had little time to think about strategic risk. This has led to inadequate risk management strategies, incorrect risk assessments, and missed opportunities to maximize the value of an organization’s assets.
Third-party risk from cybersecurity to reputational and data integrity Third-party risks could have serious consequences for organizations. To limit this kind of risk, a robust screening process that includes failsafe procedures should be implemented to ensure that all vendors have been recognized.