To optimize their physical assets and to ensure that they deliver the best ROI, businesses must have a firm grasp on their assets as well as the risks associated with them. Businesses can make poor choices when they don’t have an understanding of the risks. This can ultimately hurt their bottom line. Lack of a solid process for managing assets and risk could expose businesses to regulatory fines and loss of profits due to poor planning.

The most common and significant challenges to managing risk and asset management are:

Unawareness of the capabilities the assets of an organisation – For instance, employees may not be aware that a piece of equipment can perform a job outside its intended range or how to operate it to maximum efficiency. This could cause the equipment to be inefficient and suffer a reduced return on investment over its life. This can be avoided by ensuring that employees have adequate training to comprehend the capabilities of the 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 poor risk management strategies, ineffective risk assessments, and missed opportunities to optimize the assets of an organization.

Third-party risk – From cybersecurity to reputational damage and data integrity Third-party risks can result in serious consequences for organizations. To limit this kind of threat, a thorough verification process involving failsafe procedures should be put in place to ensure that all vendors have been properly certified.