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This article presents the discussion on the paradigm shift of information technology into its’ second era, articulated by the change in the nature and application of technology in businesses. Driven by demands of competitive business environment and changes in computer technology, this shift is fundamental for new enterprises. The authors conceptualize paradigm shift and elaborates on research conducted on this shift to a new technology. The application of computers of this new technology improves performance of the entire workgroup, enables enterprises to work in a more cohesively and creates a network of inter-enterprise computing. Moreover, the authors discuss the critical technology shifts that must be undertaken by enterprises to fully integrate their businesses with this new technology and gain from its potentials. Changes and development in the existing software systems is one of them. The article also points out the three major challenges that organizations face due to the shift of technology in the business environment. These are referred as the “Three R’s” – reengineer, retooling and realign.
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