To optimize their physical assets and to ensure that they deliver the highest ROI, businesses require a thorough understanding of their assets as well as the risks that come with it. Businesses could make poor decisions without an understanding of the risks. This can be detrimental to their bottom line. A lack of a comprehensive process for managing risk and assets could leave companies vulnerable to regulatory fines and loss of profits due to inadequate planning.

The most common and significant problems with managing risk and assets include:

Unawareness of what an organization’s assets can do – For example employees might not know that a piece of equipment is able to perform a task beyond its intended range or to operate it with the highest efficiency. This can cause the asset to be underutilized and have lower ROI over the course of its life. This can be reduced by ensuring that employees are trained to be aware of the capabilities of an asset and how to utilize them in a way that is appropriate.

A lack of a comprehensive process for managing risk – The constant stream of compliance demands that have flooded the market since the financial crisis has left many companies with no time to think about strategic risk factors. This has resulted in suboptimal risk management strategies, incorrect methods for assessing risk and missed opportunities to improve the performance of the assets of an organization.

Third-party risk – From cyber security to integrity of data, and reputational damage can have significant implications for a business. To minimize this risk, a rigorous vetting process with failsafe procedures must be implemented to ensure that all vendors have been properly accepted.