To maximize their physical assets and to make them deliver the highest ROI, companies require a thorough understanding of their assets as well as the risks involved. Without a strong knowledge of the risks businesses can make rash choices that will ultimately hurt their bottom line. Insufficiently developed asset and risk management process could also expose companies to costly fines from regulators or lose profits due to inadequate preparation for the unexpected.
The management of risk and assets is faced with a range of issues.
Inadequate awareness of the capabilities of the assets of an organisation – For instance, employees might not be aware that an item is able to perform a function that is not within the scope of its design or how to make it operate at maximum efficiency. This can cause the asset to be inefficient and result in an inferior ROI over the course of its life. This can be mitigated by ensuring that employees have proper training to understand the capabilities of an asset and how to utilize it in a responsible manner.
Insufficiently developed processes for managing risk – The continuous demand for compliance that have flooded the market since the financial crisis has left many companies with little time to consider strategic risk considerations. This has led to suboptimal risk management strategies, inaccurate risk assessments and missed opportunities to optimize the company’s assets.
Third-party risk – From cyber security to reputational and data integrity, third-party risks can have serious consequences for organizations. In order to mitigate this type of risk an effective vendor vetting process should be implemented with failsafe procedures in place to ensure that every vendor is properly vetted.
