To ensure that companies can maximize their physical assets and make them return the most, they need to have an understanding of both their assets and the risks associated with them. Without a thorough knowledge of the risks, businesses may make unfounded decisions that ultimately harm their bottom line. A lack of a robust asset and risk management process could expose companies to costly regulatory fines or lose profits due to insufficient planning 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 can perform a function outside the scope of its design or how to use it to its maximum efficiency. This can result in underutilization of the asset, and a diminished ROI throughout its lifecycle. This can be mitigated by ensuring that employees have the proper education to understand the capabilities of the asset and how to use it effectively.

Lack of robust risk management processes – Since the financial crisis, many companies have had little time to think about strategic risk. This has led to poor risk management strategies, ineffective risk assessments and missed opportunities to maximize the assets of an organization.

Third-party risk – From cybersecurity to reputational and data integrity Third-party risks can have significant consequences for an organization. To mitigate this kind of risk an effective process for vetting vendors should be put in place with failsafe processes in place to ensure that every vendor is properly vetted.

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