The Internet and other advances in global communications are rapidly transforming the economic landscape. A new economy has emerged, one that is based on leveraging information, rather than on owning or controlling physical assets. It's an "economy of information," replacing an "economy of things," say Philip Evans and Thomas Wurster in their book, Blown to Bits: How the New Economics of Information Transforms Society.

This transformation of the economy can be compared to an earlier transformation of the late 18th and early 19th centuries, when the world's craft economy was replaced during the industrial revolution. Many tied to the old economy - craftsmen, artisans - failed to cross that divide. They were left behind, often without means to a livelihood, while their children or grandchildren moved forward into the factories of the new industrial economy.

We hear that today's transformation is creating a similar situation, dubbed the "digital divide," in which access to Internet technology will separate the economic "haves" from the "have-nots." But the real divide will not result from the technology itself, but rather from some people's inability to make the transition to the Information Age.

How can you make the leap? Well, the first challenge concerns rapidity of change. Granted, change is constant, but technology has added a new dimension, speed. Changes now occur faster than our ability to assimilate them or to figure out what they may mean to our lives. Business convention has also been turned upside down. We need look no farther than the first big business news story of the new millennium - America Online, an upstart that went public only in 1992, acquiring TimeWarner, heir to a group of established companies that have dominated the economy for decades. TimeWarner dwarfs AOL by many conventional measures - it has five times the sales revenue and more than five times the employees - yet AOL, child of the new economy, is taking over.

The second challenge concerns our ability to create new business models to incorporate the new technology. Big business is grappling with this one. On one side you have traditional "brick and mortar" companies such as Wal-Mart; on the other are "dot com" companies, such as Amazon.com, which exist only in cyberspace. The challenge for the brick and mortars is to discover how to take advantage of the Internet without sacrificing their traditional business or compromising their distribution channels. Some have formed separate "dot com" entities to sell products over the Internet but, so far, most have failed to integrate their two presences.

The third challenge is to learn how to evaluate technology. Making it across the digital divide won't be solved by getting the latest and greatest piece of technology. Thinking that new technologies, by their presence alone, will provide you or your company with a competitive advantage is faulty. Rather, develop strategies to evaluate new technology and invest wisely. Is the technology appropriate for your business? Does it support your vital business functions?

The fourth challenge is globalization. For the first time in recorded history, technology has created a global economy in which what one does affects and is affected by people and events thousands of miles away. The Internet is an essential part of this global economy.

What are the essential steps to meet these challenges? First of all, know the critical business functions necessary for you to remain competitive in the new economy. But beware: they may not be the functions you are performing today.

Be able to take advantage of rapid change. Develop the ability to shift gears mentally. As a result of the Internet, whole companies and their employees are disappearing. If you don't want to be next, you will need to be flexible and develop new skills.

Evaluate where your business needs to be and plan how to get there. Chances are you will need to develop a customer-centered strategy. Because of the Internet, companies can easily relate one-on-one to individual customers and provide the particular - even one of a kind - goods or services to satisfy a customer's preferences. Middle managers, administrators, and other professionals often are no longer needed to connect a company's products to the customer. Technology moves information along now, and it does it arguably better and definitively cheaper.

In the new economy, customers can enforce their preferences in ways they couldn't before. The competition is just a mouse click away. Consider where people go today when they need a will. To a lawyer? Many simply go to their computers and get on the web. What do people do when they want to purchase stock? Call a broker? No, they log on to the web.

So just how do you keep this new type of customer - a person you will likely never see or talk to? Well, think about what drives you away: You visit a web site that features certain products, but you discover nothing is actually available and delivery is weeks away. You run into a problem or have a question about something you see, so you email the webmaster, and then you never hear anything back. Well, here's something that hasn't changed: the measures of good service depend on the same factors as in the past - promptness, reliability, honesty, and friendliness.

This takes us to the final challenge. Remember that your customer could come from anywhere. Putting customer service strategies in place means that you can respond to all customers, worldwide, in multiple time zones.

Of course, you could respond to this transformation as many craftsmen and artisans did in the past. But the old economy is gone. If you want to join your children and grandchildren across the digital divide, focus on your customers' needs and use technology to provide the best service. Understand the new technologies and select the ones that are appropriate. Embrace the technology that allows you to provide the personalized touch behind the web page. Be responsive, quick, reliable, honest, and friendly. Then you'll make it easily across the divide.

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Bruce M. Logan, Ph.D., is director of the master's degree information technology specialization in the School of Management.

Nancy Alimansky is an associate professor in the School of Management. Logan's research interests include analyzing new business models for incorporating changes brought about by the new economy.