Fashion Accessories

Common Challenges to Asset and Risk Management

To optimize their physical assets and to make them deliver the highest ROI, businesses must have a clear understanding of their assets as well as the risks that come with it. Without a clear understanding of the risk environment companies could make ill-informed choices that will ultimately hurt their bottom line. Insufficiently developed asset and risk management process could expose companies to costly fines from regulators or loss of profits due to inadequate planning for the unexpected.

Asset and risk management is faced with a number of issues.

Inadequate awareness of the capabilities of the assets of an organisation – For instance, employees may not be aware that an item can perform a job outside its intended range or how to make it operate at maximum efficiency. This could cause the asset to be neglected and thus have an inferior return on investment over its life. This can be avoided by ensuring that employees have sufficient training to be aware of the capabilities of an asset and how to use it effectively.

A lack of a robust risk management system – since the financial crisis, a lot of companies have not had the time to think about strategic risk. This has led to poor risk management strategies, incorrect methods for assessing risk and missed opportunities to optimize the performance of the assets of an organization.

Third-party risk – From cyber security to data integrity, and reputational damage can have serious consequences for an organization. To mitigate this type risk, a robust verification process involving failsafe procedures must be implemented to ensure that all vendors have been properly accepted.

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