Development of design characteristics based dynamic decision support framework is presented in the current study, to facilitate the decision makers in the transformation of system in the industry 4.0 paradigm. The model development is designed for a robust decision-making approach to integrating human and machine knowledge to adopt smart technologies and system design. The system is based on prioritization of the industry 4.0 design principles and characteristics including flexibility, self-adaptability, self-reconfigurability, context awareness, decision autonomy, and real-time capabilities. It has been revealed from an industrial field study, the companies facing difficulty to transform the system, and systematics approach needed to overcome the challenge. A decision support process has been developed as an integrated approach to embedding human knowledge. The developed process has been validated using Technique for Order of Preference by Similarity to Ideal Solution, the results depict the operational flexibility, has been most crucial transformation characteristics prioritized using the Analytical Hierarchical Process. The developed process has the capability to help the system development and estimate the factors involved in the transformation.