Definition of Obsolescene Risk

It is the risk that a process, item or technical innovation used or generated by an organization to make money will become Obsolete, and therefore no longer aggressive in the market.

Obsolescence risk is most significant for technology-based organizations or organizations with products or services centered on technical advantages. Obsolescence can grind an organization in an almost no time by which makes it uncompetitive.
Obsolescence risk is an aspect for all organizations to some level, and is a necessary complication of a successful and impressive economic system. This risk comes into play, for example, when a organization is determining how much to spend in a new technical innovation. Will that technical innovation stay excellent long enough for the investment to pay off, or will it become obsolete so soon that the organization drops money? Obsolescence risk also means that organizations seeking to stay aggressive and successful need to expect to make large investment expenses any time a major item, service or aspect of manufacturing become Obsolete. This is complicated because it can be difficult to calculate obsolescence and to budget accordingly.

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