Industry 4.0 and the Future of Digital Strategy: Pathways to Digital Value Creation

Abstract

The acceptance and addition of such progressive digital technologies into operational processes and decision-making platforms have totally redefined how businesses conceptualize strategy in Industry 4.0. This chapter explores how digital value creation (DVC), as a process, has been facilitated through Industry 4.0 technology, with digital strategy orientation (DSO) as the intermediary. For instance, employing a quantitative research strategy that focuses on theoretical constructs, the chapter integrates theories from dynamic capability theory, the resource-based view (RBV) and IT business value theory to explain how businesses achieve strategic and performance outcomes from their digital investments. Data collection entailed conducting surveys among managers whose business entities adopted Industry 4.0 technology. The examples given for Industry 4.0 technology were Internet of Things technology, artificial intelligence technology, analytics technology, automation technology and cyber-physical system technology. This chapter empirically explores Industry 4.0 technology and DVC and how Industry 4.0 technology influences DSO through structural equation modelling techniques. The results show that Industry 4.0 technology affects DVC both directly and through DSO. Digital strategy is an integral part of any business through which technology capabilities are actually linked with overall business goals. Organizations primarily benefit from the outcomes of a digital strategy by making their operations more efficient, starting new creative activities and gaining a competitive advantage in Industry 4.0. The findings quite clearly bring out that firms focusing on digital strategy are better positioned to achieve long-term value from their Industry 4.0 investments.