5 recommendations to smartly incorporate risk into your Asset Management strategy

August 29, 2018
Loc8 Insights 5 recommendations to smartly incorporate risk into your Asset Management strategy

When it comes to risk management for enterprise-level assets, planning an effective strategy involves a lot of moving parts, many of which have to be carefully controlled and adjusted depending on a variety of factors. Risk-based asset management is a universal requirement for any organisation, especially those with high-value assets. To properly ensure you have covered all the bases when integrating risk into your asset management plan, here are some pointers you need to keep in mind.

Opportunity, not a problem

One major change in thought process should be to view risk management as less of an uncertainty but more of an opportunity. While some risks may seem unavoidable, many can be carefully avoided as long as the proper precautions are in place.

For this reason, you should definitely invest heavily in ensuring you have complete knowledge of all possible risks that can impact your organisation on all levels. For this purpose, allocate a sizeable part of your capital investments into hiring an expert risk assessment consultant, at least for the initial stages.

Assess long-term effects

One common misstep many organisations make when crafting a risk-based asset management strategy is not properly assessing the long-term consequences of the plan. Sometimes decisions made for short-term risk assessment gains may not be feasible in the long run. Hence, before you zero-in on a risk assessment strategy for your organisation, try and chalk-out all the possible outcomes by performing a thorough analysis of the plan’s pros and cons.

Incorporate external factors

One of the major factors in any risk assessment plan is the steps you should take to manage losses that could be incurred from external factors, many of which are hard to predict. It may seem nigh-on impossible to predict the occurrence of all kinds of disasters; however, the effects of major ones can be mitigated by having the proper steps in place. Assess the probability of natural disasters occurring in your area and vicinity, taking into account environmental factors like climate, pollution, etc. Check if your local governments and administrative bodies have plans in place for threats or lock-down situations? By checking off all possible emergencies and risks, you can keep a set of tools ready to handle the effects quickly and effectively.

Communicate with stakeholders

Whenever you modify or create a new risk assessment plan, it is imperative to keep all relevant key stakeholders in the loop about the new changes, as well how and if it will affect the day-to-day operations of the organisation. Do keep in mind that these stakeholders don’t just include clients, customers, employees and senior management; depending on the steps involved, you might have to inform government officials, members of the legislature, and even media organisations. By sharing your risk management plans, these stakeholders are aware that your organization is doing everything it can to mitigate risks.

Get support from all verticals

Without the proper executive support, your organisation’s risk-based asset management plan is as good as useless. To create the perfect risk-based asset management plan, take the advice of the organisation’s top executives, especially the ones with the key decision-making power. Besides that, it is important to educate senior leadership on why they need to invest time in understanding the different aspects of risk-based asset management, so they can contribute their inputs for identifying and mitigating potential risks for your organization.

Risk assessment is a vast and at time complicated field, and there are many schools of thought on the best approaches to incorporating a viable and sustainable risk-assessment strategy into your asset management plan. By using the above pointers, you can take the first steps towards planning a more comprehensive and effective asset management solution.

If you found this article helpful, check out our other blogs including one about field mobility and one about the latest augmented reality trends changing the field service industry.

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