Industry 4.0: What it means for your business

Industry 4.0 challenges and risks


Industry 4.0 technologies are evolving fast, helping businesses to become 'smart' and more efficient. To remain competitive, companies should look to embrace - or at least acknowledge - these changes.

Making use of digital transformation tools is not always straightforward. Industry 4.0 adoption can present certain challenges and risks for many businesses.

Barriers to digital transformation

According to recent research, five common barriers to digital transformation include:

  • lack of skills or talent to manage complex Industry 4.0 structures
  • concerns regarding cyber security
  • other priorities for capital expenditure
  • lack of appropriate digital infrastructure
  • lack of knowledge of digitalisation and how it can help the business

Source: BDO digital transformation report.

Lack of skills

Access to skills is often cited as the biggest barrier to digital transformation. Technology adopters report difficulties with finding, training and re-skilling staff, particularly around the areas of user interface, data science, software development and machine-level controls. Problems also sometimes occur around the accessibility of technology, with people not willing - or finding it too difficult - to use new digital tools and applications. If this is a concern in your business, it may help to conduct a training needs analysis to determine what training your staff may need. See how to identify staff training needs.

Data and IT security

IT security can pose substantial risks in Industry 4.0 setting. Online integration of processes, systems and people potentially give room to security breaches and data leaks. Bear in mind, IT security is not limited to cyber attacks. Other prominent threats include network misconfigurations, erroneous commands, and software or device failures that can potentially disrupt business operations and production. Your IT infrastructure will also need to be up to the task of coping with the extra connectivity required for your digital transformation. See more on IT risk management.

New business models

Another common hurdle faced by businesses adopting Industry 4.0 is the lack of internal alignment about which strategies to pursue. With the advent of digital technologies, new business models are emerging requiring companies to rethink the way they do business. Without a consensus on business strategy, or the right people in place to drive it, it can be difficult to overcome these internal challenges.

Culture change

Managing culture change is a vital part of Industry 4.0 success, as well as a potential hindrance if not executed well. If your workers aren't ready for the changes, they can be unwilling, resistant or unable to adapt. Preparing them for the technology shift and gaining their buy-in is critical to the success of your digital project. Leadership and leading from the top can play an important role in bringing about the cultural change needed for digital transformation. Read more about change management.

Capital investment

Depending on what you're looking to change, Industry 4.0 adoption sometimes involves high upfront costs. However, a large investment is not always required to transform the business. You can think big, but start small. Begin with a simple scalable solution, perhaps a smart section of lighting, and see how it works. You don't need to commit a huge investment to make a significant step forward.

Read about the business benefits of Industry 4.0 and check out some examples of digital innovation in business.

Help with Industry 4.0 implementation

Support is available to help you overcome some of the key challenges around Industry 4.0 adoption. For help with skills development, you can consider:

For technical support with technology solutions, you can look at:

You can also find innovation advice, inspiration and support via InnovateNI website or browse our range of innovation, research and development guides.

How to assess your digital readiness?

If you're keen to invest in digitalisation but not sure what will work best for your business, there are resources such as online tools to help you assess your digital readiness. For example, you can use the 4Manufacturing tool that helps manufacturers to deploy digital technologies. 4Manufacturing was developed in partnership with the industry by the Knowledge Transfer Network and Innovate UK.