To maximize their physical assets and to ensure they provide the best ROI, businesses must have a firm understanding of their assets my site and the risks associated with them. Without a clear knowledge of the risks, businesses may make unfounded decisions that end up harming their bottom line. A lack of a robust process for managing assets and risk can leave organizations vulnerable to fines from regulators or lose profits due to insufficient planning.
The most prevalent and significant problems with asset and risk management include:
Unawareness of the capabilities the assets of an organisation – For instance, employees might not be aware that an item can perform a function outside its designed range or know how to make it operate at maximum efficiency. This could lead to underutilization of the asset as well as a decreased ROI throughout its lifetime. This can be reduced by ensuring that employees are educated to know an asset’s capabilities and how to use the asset in a proper manner.
Lack of a robust process to manage risk – The continuous demand for compliance that have flooded into the industry since the financial crisis have left many companies with no time to think about strategic risk management. 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 cyber-security to integrity of data and reputational damage can have significant consequences for an organization. To mitigate this type of risk an effective process for vetting vendors should be in place with failsafe protocols in place to ensure that every vendor is properly vetted.