To maximize their physical assets, and to ensure they yield the best ROI, businesses must have a clear grasp on their assets and the risks that come with it. Without a solid 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 could expose companies to costly fines and penalties from regulators or lost profits because of insufficient preparation for the unexpected.
Management of risk and assets is faced with a range of issues.
Unawareness of the capabilities of the assets of an organization. For instance, employees may not be aware that a piece of equipment is able to perform a function that is not within its designed range or know how to operate it to maximum efficiency. This could result in under-utilization of the i thought about this asset as well as a reduced ROI throughout its lifespan. This can be minimized by ensuring employees are properly trained to be aware of the capabilities of an asset and how to use the asset in a proper manner.
Lack of robust risk management procedures – Ever since the financial crisis, many companies have not had the time to think about strategic risk. This has led to suboptimal risk management practices, inaccurate risk assessments, and missed opportunities to optimize the assets of an organization.
Third-party risk from cyber security to data integrity and reputational damage Third-party risks can result in devastating consequences for an organization. To minimize the risks associated with this type of threat the need for a robust vendor vetting procedure should be put in place with failsafe processes in place to ensure all vendors are properly vetted.