/Industry 4.0 And Digital Risk (via Qpute.com)

Industry 4.0 And Digital Risk (via Qpute.com)


“Industry 4.0” embraces a view of a new industrial revolution through smart, autonomous technologies. It strives to marry the digital world with physical action and thus blur the boundaries between worlds as we know them. With the help of connectivity, it is a fusion of advances in artificial intelligence (AI), robotics, the internet of things (IoT), blockchain, 3D printing, quantum computing and a host of other technologies.

The consensus is that the Fourth Industrial Revolution builds on the previous iterations. However, two factors make it different:

• The rate of change is exponential.

• The significantly expanded scope disrupts all industry sectors and impacts them deeply.

However, Industry 4.0 is much more than just technology and technology-driven change. The real opportunity lies in unlocking digitization’s full potential, going beyond the tech and harnessing it to positively impact all of society.

Digital Transformation, Digital Maturity And Digital Risk

To capitalize on Industry 4.0 opportunities, organizations must incorporate new digital technologies and capabilities into their business and legacy assets. This is commonly known as digital transformation.

Digital transformation is not new. As a society, we have been through a few digital transformations, roughly one every decade.

Digital Risk: One consistency that has grown with each transformation is the growth of digital risk, which is risk associated with digital business processes. More importantly, digital risk is a business issue, not just a technology issue, and the board and C-suite need to own it.

Understanding digital risk and how to manage it begins with understanding what creates it. We have the process of digital transformation to thank for this. The next time someone wants to talk about managing risk, ask if they have experience performing risk assessments or qualifications in risk management. Most likely, they don’t.

Digital Maturity: Organizations, especially those not “born digital,” chase digital maturity. In pursuing this, they engage in digital transformation, and once an organization gets to this end, it is considered digitally mature. While it may seem like reaching an end goal, digital maturity should not mean getting to “the end.” Digital maturity is a dynamic state; new improvements need to be applied in order to enjoy the opportunities offered by technology. Otherwise, the organization will stagnate since new developments/improvements will not be continuously applied.

Digital maturity is about integrating your organization’s operations and human capital into digital processes and vice versa. Note the familiar interplay of the pillars of people, process and technology. However, this nirvana is fleeting while the pursuit is continuous.

Digital Transformation: According to MIT, digital transformation is “about how technology changes the conditions under which business is done, in ways that change the expectations of customers, partners and employees.” While most organizations are on the journey to digital maturity, no one has quite reached that point yet. This is because digital transformation requires a complete overhaul to see and embed technology in the core of the organization. It requires a bunch of the right technology, but this is only the first phase of the process.

Lastly, note that there are several types of digital transformations, but they all broadly fall into three categories: internal, external and data transformation.

Digital transformation is, in effect, the journey toward digital maturity, and digital maturity is the final state of digital transformation.

Cybersecurity And Digital Risk Management

Managing cybersecurity is considered a challenging imperative in embracing Industry 4.0. The digitization that accompanies Industry 4.0 heightens a business’s vulnerability to cyberattacks, and protecting a bludgeoning array of connected platforms, networks, hardware and software is becoming increasingly complex.

This expansion of the business digital surface increases digital risk and is why cybersecurity is a critical imperative for all organizations. It is the protection of today’s precious commodity against theft, unauthorized access and any abuse. I am, of course, referring to all your organization’s critical digital assets: its information, data and knowledge.

Appropriate attention must be paid to cybersecurity and digital risk, and it must be included in your organization’s digital strategy road maps. Cyberattacks have risen significantly as other entities understand the power and ability to misuse data for different purposes, whether strategic, financial or plain mischief.

Preparing For The Journey

Your digital transformation journey starts with a strategy that includes the cybersecurity components required to ensure that transformation risk is managed appropriately.

Organizations must look at risk areas beyond traditional risk and security. Your organization should clearly understand its digital footprint and create a register of digital risk. A good example, following many recent incidents, is social media platforms, which many businesses have adopted as part of their marketing strategy. These come with some unique digital risk that can undermine company brand and reputation. Uncovering and understanding all areas of risk — such as third-party risk, regulatory risk and so on — is critical to identifying and dealing with all the risks that an organization may be exposed to in the world of Industry 4.0.

The strategy must contain some fundamentals like detection and response functions. While a focus on prevention mechanisms is required, it should not be to the detriment of detection and response capabilities. Despite all the prevention efforts in the world, bad things will still happen! Besides, astute cyber practitioners know that the right tool set can be effectively used for both efforts.

Digital transformation is vital for all industry sectors to remain competitive and relevant. Identifying new ways to adopt digital processes can open new opportunities; the key is in exploiting these opportunities in a safe, secure manner by including cybersecurity as part of your transformation program.

There is a view that Industry 4.0 “disruption” is the impetus for transformation. My take is that it is not the disruption that drives change, but rather the fear of being left behind. Some would say that organizations embark on digital transformation when they have failed to evolve.

There is always risk in moving forward, but is the risk greater if you don’t?


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