# Industry 4.0 and Organisations: Key Organisational Capabilities

Stefan Smuts, Alta van Der Merwe, Hanlie Smuts

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Stefan Smuts, Alta van Der Merwe, Hanlie Smuts. Industry 4.0 and Organisations: Key Organisational Capabilities. 20th Conference on e-Business, e-Services and e-Society (I3E), Sep 2021, Galway, Ireland. pp.423-438, 10.1007/978-3-030-85447-8_36. hal-03648145

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# Industry 4.0 and organisations: Key organisational capabilities

Stefan Smuts[0000-0002-2173-1780], Alta van der Merwe[0000-0002-3652-7512], Hanlie Smuts[0000-0001-7120-7787]

Department of Informatics, University of Pretoria, Pretoria, South Africa

sbsmuts@gmail.com; alta@up.ac.za; hanlie.smuts@up.ac.za

**Abstract.** The fast-paced evolution of digital technologies, termed the fourth industrial revolution (4IR), influences organisations to realise digital technology potential from a holistic point of view. In this context, organisational competitiveness relies on whether organisations' business value-creation capabilities are adaptable and flexible. The purpose of this study was to consider the 4IR key organisational capabilities that organisations require to ensure sustainability and to create business value. We identified 14 4IR organisational capabilities and operationalised these capabilities by mapping them to the dynamic capabilities sensing (strategic leadership, external drivers, data value), seizing (decision-making, technology features, software services and solutions) and transforming (business model, process optimisation, product efficacy, organisation, customer) as defined by Teece. Three 4IR organisational capabilities, namely employees, skills and expertise, as well as communication, are relevant across all three dynamic capabilities. By applying the 4IR organisational capabilities, organisations will be able to consider the end-to-end impact of 4IR on them and to address action plans to sustain value, or to create new business value.

**Keywords:** Industry 4.0, Organisational capabilities, Dynamic capabilities

## 1 Introduction

To remain competitive, organisations have to manage the significant evolution of digital technologies from two perspectives: firstly, the scope of the evolution and secondly, the pace at which it takes place [1, 2]. This evolution of digital technology, referred to as the fourth industrial revolution (4IR) [3, 4], is associated with aspects such as artificial intelligence, the internet of things, big data, robotics, cloud computing and augmented reality [5]. However, for organisations to realise the 4IR potential from a comprehensive point of view, 4IR-relevant organisational aspects such as an 4IR-relevant strategy, digital business model innovation, technology investment optimisation, workforce management complexity, digital eco-systems, technology-centric convergence, virtual model and physical environment linkage, value chain digitalisation and product portfolio innovation, must be considered [6].

While 4IR potentially offers great value to organisations, traditional business models struggle to meet and keep up with the demands of the new digital economy, potentially threatening their sustainability [7]. Furthermore, emerging technological implementation and transformation fail to realise the desired business value-creation intentions [8].
Organisational competitiveness therefore relies on whether organisations' business value-creation capabilities are adaptable and flexible [9]. Such efficacy of capabilities enables organisations to adjust organisational and technology strategies dynamically and to ensure sustained alignment between the organisation's capabilities and business value creation [9, 10].

This research study was conducted to understand the required capabilities better and to ensure that the identified capabilities enable business value-creation in the context of 4IR. The focus of this paper is therefore on contributing to the discourse on what 4IR organisational capabilities entail, by considering the following research question: “*What are the 4IR key organisational capabilities that organisations need to consider?*” We reflect on this research question by considering an overview of 4IR in an organisational context and how it affects key organisational capabilities required.

In this paper, we firstly provide an overview of literature in section 2, followed by the research approach in section 3. In section 4 we present a discussion on the data analysis and findings, while section 5 details the contribution of the study. Section 6 concludes the paper.

## 2 Background

The aim of 4IR is to use technology to realise improved operational efficiency and productivity, to optimise business systems and to improve customer experience [11, 12]. Furthermore, human-machine interaction enables enhanced value-added services, automatic data exchange and communication, as well as analysis across value chains [13, 14] This contributes to business process efficacy and ultimately enables the creation of quality products and services at lower cost [7, 11].

In this section, we consider 4IR in the context of organisations, organisational capabilities and organisational capability theory.

### 2.1 Industry 4.0 and organisations

The evolution of digital technologies had a significant impact on organisations [15], altering organisational practices as 4IR technologies (e.g. the internet of things, robotics, etc.) replaced routine and repetitive jobs [16]. Process visualisation and machine learning techniques may be applied to detect flaws and to optimise outputs [15]. To allow organisations to manage these multiple internal and external factors to enhance business value and create a sustainable competitive advantage, 4IR horizontal and vertical integration alignment must be considered [16, 17]. The activities of a horizontally integrated organisation focus on its core competencies and build their end-to-end value chain through establishing partnerships. Alternatively, a vertically integrated company manages most of its value chain in-house, e.g. product development, manufacturing, sales, distribution and marketing [15-17].

Therefore, to allow organisations to manage multiple complexities introduced by 4IR, the development and application of new models and methods are required [18].
These models and methods need to consider complex systems, comprehensive infra-
structure consisting of a high-quality information network and internet connectivity,
security and privacy, data protection, work organisation and design, and the effective
use of resources [3, 17, 19, 20]. As these complex systems affect the roles of employees
and managing teams of highly specialised technical experts, organisational perfor-
mance needs to take cognisance of skilling employees to operate in the new technolog-
ical revolution, with specific profiles that are currently non-existent [21, 22].

## 2.2 Organisational capabilities and challenges

Organisational capabilities are intangible assets and refer to the “collective skills, expertise, and alignment of the people” in the organisation [23 : 119]. Capabilities span the whole organisation, as opposed to competencies that tend to be associated with an individual employee [23]. Such organisational capabilities represent the ways in which people and resources are combined to accomplish work [23, 24]. Capabilities therefore refer to the ability to take action (e.g. a decision), to carry out a set of strategic or operational activities, to accomplish a practised or routine activity, or to perform a collection of routines such as processes or procedures [25, 26]. In this context, the importance of management capability to adapt effectively to changing environments by “re-configuring internal and external organisational skills and resources” is highlighted [27].

However, scholars report many challenges with regard to organisational capabilities in the context of 4IR [8]. Some of these challenges include identifying which strategic technologies to focus on, considering multiple factors when complex requirements and their impact on business value-creation must be assessed and balancing market-pull and technology-push approaches to find new business value-creation initiatives based on new technology capability [7, 8, 28]. At an operational level, challenges include inconsistent business processes, duplicated software solutions, limited system capability to support operations and lack of end-to-end visibility and transparency [7-9, 29].

## 2.3 Organisational capability theory

As organisations initiate and execute transformation of their business, technology and operational aspects, they utilise capability maturity models and metrics to monitor the measurement of success [28]. Maturity models have proven to be a significant tool to guide organisations in improving their capabilities and process orientation [30], and several maturity models have been developed with the aim to evaluate progress of organisational capability improvement [31-33]. Maturity models, in the context of capabilities, track the improvement (maturing) of organisational and technological systems in order to increase their capabilities over time with the aim to achieve the defined future state [32]. Some examples of such capability maturity models include the capability maturity model consisting of a five-staged structure (initial, repeatable, defined, managed, optimising) [34], a maturity model for assessing organisational process capabilities consisting of nine dimensions (products, customers, operations, technology, strategy, leadership, governance, culture, people) [32], a quality management maturity grid consisting of 14 steps [35] and multiple project management maturity models [36].
For the purpose of this study and in the context of 4IR, dynamic capabilities were considered as defined by David Teece [37]. Teece's [27, 37] concept of dynamic capabilities presumed that organisations require the ability to navigate fast-changing markets by reshaping the organisation's asset structure and realise the essential internal and external transformation. The dynamic capabilities included three aspects: sensing (the capacity to explore and shape opportunities and threats), seizing (to take hold of opportunities) and transforming (to maintain competitiveness through improving and reconstructing the organisation's tangible and intangible assets) [27]. These three capabilities, sensing, seizing and transforming, were deemed key to ensure that an organisation may reach the next transformative stage [24].

## 3 Research Approach

The objective of this paper is to present the 4IR key organisational capabilities that organisations need to consider. In order to achieve the objective, data collection was carried out in two steps. Firstly, a systematic literature review (SLR) to synthesise the existing body of completed and recorded work produced by researchers, scholars and practitioners was conducted to identify 4IR organisational capabilities [38, 39]. Peer-reviewed and academic sources such as technical reports, books and conference proceedings were selected for the SLR process [40, 41]. To include all references to 4IR and organisational capability, the search terms were chosen as: ("fourth industrial revolution" and "organisational capability") or ("Industry 4" and "organisational capability"). The initial research studies extracted (165) (Figure 1) were screened by applying specific criteria such as non-English studies, anecdotal or opinion-based papers and duplicate studies that formed part of the result set. Inclusion criteria consisted of peer-reviewed publications and technical reports relevant to the research question. After the initial search, as well as the application of inclusion and exclusion criteria, 153 publications were selected as shown in Fig. 1.

<figure><img src="image_3.png" /><figcaption>Fig 1. Total number of papers extracted and analysed</figcaption></figure>

We concluded a detailed screening of abstracts and analysis of the full text of the prospective papers, after which 83 papers were assessed in detail. Papers were excluded based on criteria such as studies not being associated with the research question, a keyword mismatch and irrelevance (e.g. about speech, about psychology, about racial analysis).
Secondly, semi-structured interviews were conducted in order to enrich the organisational capabilities defined through the SLR. A semi-structured interview guide was designed, guided by the SLR findings and consisting of two sections: the initial section captured respondent demographic information, followed by the second section containing the questions regarding key 4IR capabilities. Nine respondents were identified through purposive sampling based on their experience and knowledge related to the research study [42]. The profiles of respondents are summarised in Table 1.

<table><caption>Table 1. 4IR organisational capabilities extracted from the literature</caption><thead><tr><th rowspan="2">Organisational level</th><th colspan="2">Tenure at current organi-<br>sation</th><th rowspan="2">Industry sector</th></tr><tr><th></th><th></th></tr></thead><tbody><tr><td>Senior Management</td><td>1</td><td>9-12</td><td>2</td><td>Education<br>Communication and infor-<br>mation technology sector</td><td>1</td></tr><tr><td>Executive</td><td>4</td><td>16+</td><td>2</td><td>Financial sector</td><td>3</td></tr><tr><td>Middle Management</td><td>2</td><td>3-5</td><td>4</td><td>Aviation</td><td>2</td></tr><tr><td>Specialist</td><td>2</td><td>6-8</td><td>1</td><td></td><td></td></tr></tbody></table>

Seven of the nine respondents (78%) confirmed that they had undergone a digital transformation project in the past five years.

## 4 Data Analysis and Findings

The aim of this paper is to consider the 4IR key organisational capabilities. Themes and main themes were identified in the selected studies through a two-step process: firstly, descriptive codes were used to identify themes [43] and secondly, open coding was used to identify emerging main themes [44]. Table 2 depicts the extracted capabilities, identified themes, as well as the references.

<table><caption>Table 2. 4IR organisational capabilities extracted from the literature</caption><thead><tr><th>Theme</th><th>Capability from the literature</th><th>References</th></tr></thead><tbody><tr><td>Leadership</td><td>Accountability</td><td>[23, 45]</td></tr><tr><td>Leadership</td><td>Co-created leadership/leadership</td><td>[7, 23, 45-49]</td></tr><tr><td>Organisation</td><td>Coherent brand identity</td><td>[23, 46]</td></tr><tr><td>Customer</td><td>Collaboration</td><td>[23, 50]</td></tr><tr><td>Product efficacy</td><td>Creativity</td><td>[46, 51]</td></tr><tr><td>Customer</td><td>Customer connectivity</td><td>[5, 7, 23, 45]</td></tr><tr><td>Data value</td><td>Data-driven decision support</td><td>[5, 28, 47, 48, 50-52]</td></tr><tr><td>External environment</td><td>Deal with external disasters</td><td>[45, 47]</td></tr><tr><td>Customer</td><td>Dialogue</td><td>[45, 46, 48]</td></tr><tr><td>Organisation</td><td>Diversity and inclusion</td><td>[45, 46, 48]</td></tr><tr><td>Product efficacy</td><td>Efficiency</td><td>[23, 46]</td></tr><tr><td>Employees</td><td>Employee voice</td><td>[46, 48, 50, 51]</td></tr><tr><td>Employees</td><td>Employee-driven improvement</td><td>[46, 47, 51]</td></tr><tr><td>Skills and expertise</td><td>Enterprising behaviour</td><td>[7, 46, 47, 51]</td></tr><tr><td>External environment</td><td>Environment and market</td><td>[7, 8, 53]</td></tr><tr><td>Product efficacy</td><td>Flexibility</td><td>[46, 51, 53]</td></tr><tr><td>Product efficacy</td><td>Innovation</td><td>[8, 23, 46, 51, 52]</td></tr><tr><td>Skills and expertise</td><td>Legal and regulatory</td><td>[8, 45, 51]</td></tr><tr><td>Organisation</td><td>Organisational culture</td><td>[7, 28, 48, 51, 54]</td></tr><tr><td>Organisation</td><td>Organisation design</td><td>[7, 46, 47, 54, 55]</td></tr><tr><td>Organisation</td><td>Organisational agility</td><td>[28, 52]</td></tr><tr><td>Organisation</td><td>Organisational knowledge and continuous learning</td><td>[23, 48, 51, 54, 55]</td></tr><tr><td>Product efficacy</td><td>Product and service personalisation</td><td>[5, 28]</td></tr></tbody></table>
<table><thead><tr><td>Theme</td><td>Capability from the literature</td><td>References</td></tr></thead><tbody><tr><td>Product efficacy</td><td>Process transparency</td><td>[8, 46, 47, 50, 51, 54]</td></tr><tr><td>Product efficacy</td><td>Quality</td><td>[45-47, 49, 53]</td></tr><tr><td>Leadership</td><td>Shared mind-set</td><td>[23, 45, 51]</td></tr><tr><td>Product efficacy</td><td>Speed</td><td>[7, 23, 28]</td></tr><tr><td>Leadership</td><td>Stakeholder relationship management</td><td>[28, 51]</td></tr><tr><td>Leadership</td><td>Strategic unity</td><td>[7, 23, 45, 51]</td></tr><tr><td>Skills and expertise</td><td>Talent</td><td>[7, 8, 23, 45-47, 51]</td></tr><tr><td>Technology</td><td>Technology (context relevance and efficacy)</td><td>[7, 23, 28, 45, 47-51]</td></tr><tr><td>External environment</td><td>Waste minimisation and green practices</td><td>[45-47, 49, 53]</td></tr></tbody></table>

We identified nine unique 4 IR capability themes, namely leadership, organisation, customer, product efficacy, data value, external environment, employees, skills and expertise and technology.

The qualitative data collected through the nine semi-structured interviews were analysed in order to identify 4IR capability themes. Major themes identified included customer, data, customer experience, employee, technology, external driver and business. Secondly, common themes highlighted in the interviews were collated and the frequency of the comment was noted, as shown in Table 3. The theme customer was mentioned 49 times (21%), while technology features and data value were presented 43 (18%) and 36 (15%) times respectively.

<table><caption>Table 3. 4IR organisational capabilities extracted from the semi-structured interviews</caption><thead><tr><td>Theme</td><td>Description</td><td>Frequency count</td></tr></thead><tbody><tr><td>Customer</td><td>customer experience, customer value, customer; customer travel experience; seamless customer experience; customer touch point; word of mouth; level of customer experience; free customer experience; many new customer</td><td>49 21%</td></tr><tr><td>Technology features</td><td>digital technologies; latest technology; new technology; new tools; next generation technology; bespoke technological solutions; old-fashioned way; unique software features; new digital technology; technology</td><td>43 18%</td></tr><tr><td>Data value</td><td>data; analysis of data; scientific data modelling; appointment of data; data science capabilities; use of data; value of data; new data services; master data management; actuarial scientific data; data processing capabilities; big data</td><td>36 15%</td></tr><tr><td>External drivers</td><td>4IR criteria; i4.0 type solutions; current newest trends; external driver; biggest external driver; industry; thorough impact assessment; technology intelligence process; company image</td><td>18 8%</td></tr><tr><td>Product efficacy</td><td>efficient products delivery; products</td><td>17 7%</td></tr><tr><td>Employees</td><td>employees; healthy team culture; behavioural change management; massive organisational shift; electronic skills matrix; employees' entry; whole organisation; organisational culture</td><td>16 7%</td></tr><tr><td>Skills and expertise</td><td>continuous learning opportunities; digital training platform; digital skills; certain software professionals; high-quality skillsets; domain of expertise; software services company; use of technology</td><td>10 4%</td></tr></tbody></table>
<table><thead><tr><th>Theme</th><th>Description</th><th>Frequency count</th></tr></thead><tbody><tr><td>Process optimisation</td><td>process of innovation; internal workflow tools; exit process/invoice; way of work; many manual processes; internal process; way of working; business improvement opportunities</td><td>9 4%</td></tr><tr><td>Strategic thinking</td><td>strategic objectives; digital transformation objectives; much revenue; digital strategy; lockdown strategic initiative</td><td>8 3%</td></tr><tr><td>Organisation</td><td>business unit; elements of business; new business unit; digital business unit</td><td>7 3%</td></tr><tr><td>Software services and solutions</td><td>competitive software services; services provider relationship; use of services; solutions development philosophy; specific solutions development; system implementation project</td><td>6 3%</td></tr><tr><td>Business model</td><td>virtual company; new business model; business value; business case approval; approved business case; differentiated business model</td><td>8 3%</td></tr><tr><td>Decision-making</td><td>decision making; core pillar; significant focus</td><td>4 2%</td></tr><tr><td>Communication</td><td>internal communications tools; information sharing tools; personalised communication</td><td>4 2%</td></tr><tr><td></td><td><strong>Total comments</strong></td><td><strong>235 100%</strong></td></tr></tbody></table>

We integrated the 4IR capabilities extracted from the literature (Table 2) with the capabilities extracted from the interview transcripts (Table 3), as shown in Table 4.

<table><caption>Table 4. Integrated 4IR organisational capabilities</caption><thead><tr><th>Theme</th><th>4IR capabilities from the literature</th><th>4IR capabilities from semi-structured interviews</th></tr></thead><tbody><tr><td>Business model</td><td></td><td>virtual company; new business model; business value; business case approval; approved business case; differentiated business model</td></tr><tr><td>Communication</td><td></td><td>internal communications tools; information sharing tools; personalised communication</td></tr><tr><td>Customer</td><td>Collaboration, Customer connectivity, Dialogue</td><td>customer experience, customer value, customer; customer travel experience; seamless customer experience; customer touch point; word of mouth; level of ex; free customer experience; many new customers</td></tr><tr><td>Data value</td><td>Data-driven decision support</td><td>data; analysis of data; scientific data modelling; appointment of data; data science capabilities; use of data; value of data; new data services; master data management; actuarial scientific data; data processing capabilities; big data</td></tr><tr><td>Decision-making</td><td></td><td>decision-making; core pillar; significant focus</td></tr><tr><td>Employees</td><td>Employee voice, Employee-driven improvement, Shared mind-set</td><td>employees; healthy team culture; behavioural change management; massive organisational shift; electronic skills matrix; employees' entry; whole organisation; organisational culture</td></tr><tr><td>External drivers</td><td>Deal with external disasters, Environment and market, Waste minimisation and green practices</td><td>4IR criteria; i4.0 type solutions; present newest trends; external driver; biggest external driver; industry; thorough impact assessment; technology intelligence process; company image</td></tr></tbody></table>
<table><thead><tr><th>Theme</th><th>4IR capabilities from the literature</th><th>4IR capabilities from semi-structured interviews</th></tr></thead><tbody><tr><td>Strategic leadership</td><td>Accountability, co-created leadership/leadership, Stakeholder relationship management, Strategic unity</td><td>strategic objectives; digital transformation objectives; much revenue; digital strategy; lockdown strategic initiative</td></tr><tr><td>Organisation</td><td>Coherent brand identity, Diversity and inclusion, Organisational culture, Organisation design, Organisational agility, Organisational knowledge and continuous learning</td><td>business unit; elements of business; new business unit; digital business unit</td></tr><tr><td>Process optimisation</td><td>Efficiency, Speed, Process transparency</td><td>process of innovation; internal workflow tools; exit process/invoice; way of work; many manual processes; internal processes; way of working; business improvement opportunities</td></tr><tr><td>Product efficiency</td><td>Creativity; Flexibility; Innovation; Product and service personalisation; Quality</td><td>efficient product delivery; products</td></tr><tr><td>Skills and expertise</td><td>Enterprising behaviour, Legal and regulatory, Talent</td><td>continuous learning opportunities; digital training platform; digital skills; certain software professionals; high-quality skillsets; domain of expertise; software services company; use of technology</td></tr><tr><td>Software services and solutions</td><td></td><td>competitive software services; services provider relationship; use of services; solutions development philosophy; specific solutions development; system implementation project</td></tr><tr><td>Technology features</td><td>Technology (context relevance and efficacy)</td><td>digital technology; latest technology; new technology; new tools; next-generation technology; bespoke technological solutions; old-fashioned way; unique software features; new digital technology; technology</td></tr></tbody></table>

Where a particular 4IR capability was not present in the review of the literature or the interview data, we indicated that cell with a diagonal line. It may be observed that the enriched dataset shown in Table 4 consists of 14 4IR capabilities; the capabilities identified from the literature were enriched by four capabilities highlighted in the interviews, namely business model, communication, decision-making, and software services and solutions.

The technology features capability focuses on context relevance and efficacy of the 4IR digital technologies and how these technological opportunities translate into business value. The business model capability refers to the opportunities 4IR provides to organisations to differentiate their business models or create new business models, with the aim to increase or add business value. This capability is also informed by the external driver capability enabling the organisation to understand 4IR criteria and solution types (technology intelligence) deeply in order to inform differentiation. Strategic leadership capability combines these aspects into coherent strategic objectives, creating strategic unity and ensuring that all stakeholders are managed in this process. Commu-
*nication capability* is important from two perspectives: both internally in the organisa-
tion and externally to customers. Communication and knowledge-sharing internally in
the organisation empower employees to make sense of the 4IR strategies, while com-
munication with customers is personalised, based on the particular customers’ profile
and engagement with the organisation. *Customer capability* means the management of
a seamless customer experience and all the capabilities in the organisation required to
achieve it. Such personal customer experiences are possible through the *value of data
capability*, where large datasets are analysed using different techniques to enable data-
driven decision support, not just as it relates to the customer, but also generating busi-
ness value insight for the organisations. This highlights the *decision-making capability*
that enables actionable insights through a process of factual analysis and learning, ra-
ther than based on intuition only.

*Employees as a 4IR capability* refer to the management of the key impact on em-
ployee-driven improvement enabled by 4IR technologies, the significant organisational
shift required towards a transformational culture and the impact on employee skills to
deal with the new organisational and technology landscape. This capability is strongly
associated with the *skills and expertise capability*, where an organisation must invest
in continuous learning opportunities and a digital training platform to foster these high-
quality skillsets. Organisational culture, organisational design, organisational agility
and the establishment of new/revised business units based on the business model choice
all form part of the *organisational capability*. The *process optimisation capability* re-
fers to efficiency, process transparency and innovation, as it influences and relates to
business improvement opportunities and ultimately the new way of work in an organi-
sation. The *product efficacy capability* underpins two key aspects. The first is the cre-
ativity, flexibility and innovativeness of product design and service personalisation, and
the second the efficacy of product delivery. A *software services and solutions capabil-
ity* refers to competitive software services, whether an organisation follows an internal
solutions development philosophy, or whether a service provider relationship and use
of services are considered.

In order to report and operationalise the findings presented in Table 4, we mapped
these to the dynamic capabilities sensing, seizing and transforming as defined by Teece
[37] and present the detail in the next section.

5 Key 4IR organisational capabilities

The aim of this paper is to consider the key 4IR organisational capabilities. Fourteen
4IR organisational capabilities were extracted from the literature and from nine semi-
structured interviews, whereafter the findings were operationalised by mapping them
to Teece's 3 [37] dynamic capabilities depicted in Fig. 2. The definitions of dynamic
capabilities theory informed the association to the particular 4IR organisational capa-
bility.
<figure><img src="image_4.png" /><figcaption>Fig. 2. 4IR relevant organisational capabilities (mapped to Teece's dynamic capabilities [37])</figcaption></figure>

For an organisation to create business value in the 4IR world, it must constantly explore opportunities and be aware of potential threats in order to navigate fast-changing markets. To achieve this, through strategic leadership organisations must constantly scan (sense) the environment, consider external drivers that could have a potential impact on their concerns and obtain data-driven insights. Through this sensing dynamic capability, organisations may then seize opportunities, i.e. decide which opportunities to implement or which threats to address. These decisions will be informed by the technology features, software services and solutions to which the organisation has access. The next step is to implement these decisions and transform the organisation through business model changes, process optimisation, product and organisational capabilities – all to the benefit of the customer and ultimately to create value for the organisation.

Three 4IR organisational capabilities, namely employees, skills and expertise, and communication, are relevant across sensing, seizing and transforming. Employees and their skills and expertise are applied throughout the process, and this process will be affected by transformation. Communication – internal and external – will also take place across all three activities of sensing, seizing and transforming and will play a significant role during transformation. We have therefore placed these three 4IR capabilities across sensing, seizing and transforming.

## 6 Conclusion

Organisations must deal with significant evolution of digital technology (4IR) to remain competitive. While 4IR digital technologies potentially offer great value to organisations, traditional business models struggle to keep up with the demands of this new digital economy and require digital capabilities to sustain or create business value. In this study we considered the 4IR key organisational capabilities that organisations require to navigate the 4IR digital technology evolution. We identified 14 4IR organisational capabilities based on an SLR and nine semi-structured interviews. To operationalise the 14 4IR capabilities identified, we mapped these to the sensing, seizing and transforming dynamic capabilities defined by Teece [24]. By applying the
4IR organisational capabilities, organisations will be able to consider the end-to-end impact of 4IR on the organisations and to address action plans to sustain value holistically.

As the study proposes 4IR organisational capabilities in the context of dynamic capabilities, further research may be conducted to test the proposal in a real-world scenario in an organisation.

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