Poor Enterprise Asset Management can silently drain your organization’s resources. From maintenance costs to unexpected downtime and compliance risks, the consequences are real (and expensive).
In fact, unplanned downtime costs the world’s 500 biggest companies a total of $1.4 trillion annually, according to The True Cost of Downtime 2024. And if that’s hard to wrap your head around, think of it this way: it’s 11% of their revenues.
In this article, we’ll explore what poor EAM looks like, the damage it can cause, and what you can do to avoid falling into its trap.
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6 risks of poor Enterprise Asset Management
Poor Enterprise Asset Management can seriously impact your bottom line, your compliance posture, and even your organization's reputation. Below are the most common (and costly) risks that come with neglecting Asset Management practices.
#1. Unplanned downtime
We've already said it, but here's once again: unplanned downtime is one of the most expensive consequences of poor Asset Management. When assets aren’t properly tracked or maintained, failures can happen without warning, disrupting operations and draining resources.
And it’s not just about broken equipment; it’s also about bad data. Incomplete maintenance records or outdated asset statuses are classic bad data Asset Management examples that make it harder to prevent issues before they escalate.
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#2. Increased maintenance and replacement costs
Improper Asset Management often leads to higher maintenance expenses and early replacements. When assets aren’t monitored closely, small issues get missed, until they become big, expensive problems.
Over time, these unplanned fixes and rushed purchases add up. Without a solid strategy in place, you're not just losing money — you're creating long-term Asset Management challenges that keep draining your budget.
#3. Compliance and audit issues
Missing records, inaccurate inventories, or untracked assets can quickly become a compliance nightmare. Poor Asset Management makes it harder to prove ownership, maintenance history, or software license usage — all of which are critical during audits.
For regulated industries, this isn’t just inconvenient — it’s risky. Failing to meet compliance standards can lead to fines, legal trouble, and reputational damage. It’s one of the most overlooked risks, but one that can have serious consequences.
#4. Inaccurate financial reporting
Without reliable asset data, your financial reporting takes a hit. From depreciation schedules to capital planning, everything depends on knowing what assets you have, where they are, and what condition they’re in.
Poor Asset Management often leads to discrepancies in valuations, incorrect write-offs, and budgeting errors. It’s a classic Asset Management risk — and one that can mislead decision-makers and affect long-term planning.
Recommended reading
Depreciation of IT Assets: Definition, Types & Calculation
#5. Cybersecurity vulnerabilities
Unmanaged or outdated assets are low-hanging fruit for cyberattacks. When you don’t have a clear inventory or real-time visibility into your devices, it’s easy for unpatched software or unauthorized endpoints to slip through the cracks.
This kind of improper Asset Management opens the door to serious security threats. Good cybersecurity Asset Management isn't just about efficiency; it’s a critical layer of defense.
#6. Inventory discrepancies and asset loss
Without proper tracking, it’s easy for assets to go missing. These inventory discrepancies often lead to duplicate purchases, wasted resources, and unnecessary downtime.
This is one of the most common Asset Management challenges, and it usually stems from outdated systems or lack of accountability. In the end, what you don’t know you have… still costs you.
ITAM Challenges | David Foxen
How to improve poor Asset Management
If poor Asset Management is slowing you down, the good news is: there are clear, practical ways to fix it. And there's really no need to reinvent the wheel, just focus on strengthening the foundations. Below are proven best practices to get your Asset Management back on track and reduce risks across the board.
#1: Use the right technology
One of the most effective ways to overcome poor Asset Management is to adopt a modern Enterprise Asset Management software, like InvGate Asset Management. These tools help centralize your asset data, automate maintenance schedules, and provide real-time insights into asset performance.
By reducing manual errors and enabling better decision-making, EAM platforms allow teams to respond faster and plan smarter. Plus, they help tackle Asset Management risk by making it easier to track, report, and optimize resources across the entire lifecycle.
#2: Conduct regular audits
One of the most overlooked ways to improve poor Asset Management is through consistent, structured audits. Regular audits help you identify gaps, outdated records, missing assets, and any mismatches between what’s documented and what actually exists.
They’re also essential for catching early signs of improper Asset Management before they snowball into bigger problems. Plus, audits strengthen your compliance posture and ensure your asset register is always ready for inspection.
#3: Train your team
Even the best tools won't help if your team doesn’t know how to use them. One common cause of poor Asset Management is simply a lack of awareness or training. When employees don’t understand asset handling procedures or the importance of accurate data entry, mistakes happen — and those mistakes can ripple across departments.
Investing in ongoing training ensures that everyone involved in the asset lifecycle — from procurement to disposal — knows their role and follows consistent practices. It’s a simple way to reduce Asset Management risks and keep your data clean and reliable.
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#4: Define clear Asset Management policies
Without clear rules, Asset Management turns into guesswork. Defining policies around acquisition, usage, maintenance, and disposal helps standardize processes and eliminate confusion. Everyone knows what’s expected, which reduces the chances of improper Assets Management slipping through the cracks.
Clear policies also make it easier to enforce accountability and align asset practices across departments.
#5: Monitor performance with KPIs
If you’re not measuring, you’re guessing. Tracking key performance indicators (KPIs) like asset utilization, downtime, maintenance costs, and return on assets gives you a real view of how your Asset Management strategy is performing.
These metrics help you spot trends, identify issues early, and make smarter decisions. Over time, they also help you avoid bad data Asset Management examples that can distort your reporting.
In short
Poor Enterprise Asset Management might start as a few small oversights. But left unchecked, it can grow into a major operational and financial burden.
The good news? By taking small, strategic steps, you can turn things around and build a more efficient, resilient Asset Management process.
Ready to see what modern EAM software can do for you? Start with a 30-day free trial of InvGate Asset Management and take the first step toward better visibility, control, and performance.
