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For companies to optimize their physical assets and make them deliver the best ROI it is essential to have a an understanding of both their assets and the risks involved. Without a strong knowledge of the risks companies could make ill-informed choices that will ultimately hurt their bottom line. Lack of a solid asset and risk management process can expose businesses to costly regulatory fines or loss of profits due to insufficient plan for the unpredictable.

Asset and risk management is faced with a number of challenges.

Unawareness of what an organization’s assets are capable of For instance, employees might be unaware that a particular piece of equipment has the capability to perform a function that is beyond its designed range or how to use it at maximum efficiency. This can lead to underutilisation of the asset and a reduced ROI throughout its lifespan. This can be reduced by ensuring that employees receive adequate training to comprehend the capabilities of an asset and how to use it appropriately.

A lack of a robust risk management process – 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, inaccurate risk assessments, and missed opportunities to optimize an organization’s why not try these out assets.

Third-party risk – From cyber security to data integrity and reputational damage Third-party risks could have serious consequences for organizations. To limit this kind of risk, a thorough procedure for vetting with failsafe protocols must be in place to ensure that all vendors have been certified.