Today's organizations must deal with tremendous changes to meet the goals of the enterprise, such as:

1. Globalization with increasing competition from all corners of the world.

2. The need for business reengineering

3. A rapidly changing demographics profile of the work force.

4. The need to form more powerful alliances among suppliers and customers.

Achieving corporate goals in the mist of all these changes requires the effective use of information technology. In the past, companies used information technology to mechanize the way they do their business. They kept the existing processes intact and used computers to speed them up. But simply automating ineffective processes cannot remove their fundamental performance deficiencies. many of today's job designs, work flows, control mechanisms, and organizational structures were developed in the 1950s, a time of a much different competitive environment and before the advent of the computer. These processes are geared toward efficiency and control. Yet the watchwords of the 1990s are cost, innovation, speed, service, and quality.

Most companies are coming to realize that business as usual is a path to disaster. The old ways of processing orders, developing new products, dealing with suppliers, and managing assets are obsolete. The world in general and business in particular have grown more complex and competitors more aggressive. Firms recognize the need to achieve order-of-magnitude improvements in their key performance measures: cost, innovation, speed, and quality.

There is a strong shift in the focus of productivity programs from the traditional cost-cutting efforts to sweeping changes aimed at improving organizational performance and effectiveness. This trend is occurring for two reasons. First, most cost restructuring programs failed to eliminate customer needs. The result was often a weakening of the company in its market, thus compromising changes of survival. Second, the enabling effect of IT is leading to completely new high performance work-system models. Human energy is reinvested in new and better ways of doing things as opposed to being eliminated through head-count reduction. Increasingly, business leaders are working to blend new work processes and advanced IT with changed corporate structures to achieve real productivity gains.

Business reengineering (term invented by Dr. Michael Hammer, MIT) is defined as the fundamental analysis and redesign of everything associated with old business to achieve dramatic performance improvement and the management of associated business changes. Thus reengineering is a way to achieve the major improvements that are needed.

To be successful in reengineering, managers must revamp the business's most critical processes in a way that capitalizes on the power of information technology. This starts with creating a vision of how things will work. To develop the vision, people must put aside their old ways of doing things. As a result, there will be able to set a course to make the dramatic changes and improvements necessary for the future.

With a clear vision on how things should work in the future, it is now possible to take a hard look at the current business process and radically change how it's done. For example, every company operates according to a great many rules, most of them undocumented, many of them decades old, and some of them no longer valid. Reengineering requires finding and vigorously challenging the rules blocking major process changes. For example: Small orders must be held until full truckload shipments can be assembled. No user can be accepted until the customer credit is checked and approved. Local inventory is needed to provide good customer service. Merchandising decisions are made at headquarters.

Managers need to find imaginative new processes to accomplish work that leads to real breakthroughs in performance. One approach is to reengineer the business process around the outcomes to be achieved, not the tasks to be performed.

Most important, the new employee skills require to carry out the new processes must be articulated. New work flow and new job descriptions are developed. Employees have to gain new skills to meet the demands of the redesigned business.

IT plays a key role in reengineering. managers need information systems that deliver critical operating information enabling them to redirect, accelerate, and sharpen their planning, decision making, and control. IT can reduce the complexity of communicating effectively across organizations. Thus, information systems that facilitate new ways of working must be designed. Often, not just information systems but a whole new technology infrastructure, computers, communications equipment, software and data must be constructed.