Key takeaways
- Critical assets are resources that sustain the validity of a business.
- Critical assets vary among organizations based on their operations.
- They must be protected and properly cared for.
- Loss of critical assets can lead to a financial crisis.
What are critical assets?
Critical assets are the resources organizations own that are essential to their operations and in delivering their mission. These assets are necessary for an organization to function and be able to deliver on its core mission in whatever field/industry they are in.
Critical assets differ from organization to organization. The critical assets for company A can be totally different from that of company B. This is because they are determined by what’s essential to the organization.
Types of critical assets
Because critical assets are determined by different organizations, it is difficult to typify them. But a general way to group them will be;
- Tangible assets: These are assets that are physically accessible and accounted for e.g. buildings, laptops, documents, operational gadgets, etc
- Intangible assets: These are assets that are important but not physically tangible or accessible. e.g intellectual property, trademarks, reputation, company image, copyrights, data, information, etc
Some examples of critical assets
As stated earlier, critical assets vary from organization to organization depending on its operations, functions, and mission. Some examples in different industries including;
- Health: Emergency wards, surgery equipment, ambulance, emergency wards, drugs, patients’ information, etc
- Tech: Gadgets, hardware, copyrights/patent, data, reputation, etc
- Education: Books, boards, teachers, writing materials etc
Why is it important to identify critical assets?
1. Ensure smooth operation
Loss of critical assets may lead to organizational failure. It is important to identify them to ensure they are properly cared for and maintained in order to protect the functional operations of the organization.
2. Assets insurance
Asides from maintenance, the identification of critical assets makes it easy to get them insured in case of loss. That way, there is a guarantee that the organization will not be at complete risk of failure.
3. Financial plan
When the critical assets of an organization are known, the budgeting for them can be planned and accounted for as they require special attention. This way, a full-blown financial crisis can be avoided in the case of critical assets loss or mismanagement.
Critical asset risk assessment
A critical assets risk assessment identifies assets of the organization that puts it in a vulnerable position. The goal of a risk assessment is to know the level of risk the business is exposed to and how vulnerable it is in case of loss.
An asset manager in charge of this process gives advice on maintenance and ways to protect these assets from harm.
Critical asset protection
Critical assets protection can be done by;
- Identifying the critical assets
- Do a risk assessment and carry out regular checks.
- Keep a record of the assets
- Properly maintain assets
- Employ an asset manager
Bottom Line
It’s been established that critical assets are very important to the operations of the business. Loss or damage results in a high chance of an organization failure. This can come with unplanned financial expenditure. With this much importance, it is wise to properly maintain all critical assets and ensure their safety. As a business owner, you don’t want to lose your source of income or spend money on emergencies that could have been avoided.
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GLOSSARY
