To optimize their physical assets, and to ensure that they deliver the highest ROI, businesses must have a clear grasp on their assets as well as the risks involved. Without a clear understanding of the risk environment companies could make ill-informed decisions that could harm their bottom line. A lack of a robust asset and risk management process can expose businesses to costly fines from regulatory agencies or lose profits because of insufficient preparation for the unexpected.

The management of risk and assets is faced with a number of issues.

Inadequate awareness of what an organization’s assets can do – For example employees might not know that a specific piece of equipment has the capability to perform a job beyond its designed range or how to use it at the highest efficiency. This could result in under-utilization of the asset and a lower ROI over the course of its life. This can be minimized by ensuring that employees are educated to know the capabilities of an asset and how to use the asset in a proper manner.

Insufficiently developed processes for managing risk – The continuous stream of compliance demands that have flooded the market since the financial crisis have left many companies with a lack of time to think about strategic risk management. This has led to inadequate risk management strategies, incorrect methods of assessing risk and missed opportunities to maximize the performance of an organization’s assets.

Third-party Risk – From cyber-security to integrity of data and reputational damage could have huge implications for a business. To minimize the risk of this kind, a robust process for vetting vendors should be established with failsafe procedures in place to ensure that every vendor is properly vetted.

https://expertalmanagement.de/2021/12/29/the-importance-of-asset-management