Human resource management, information technology, and the competitive edge

Executive Overview Global competition is putting increasing pressure on U.S. managers to make faster and better business decisions. Investments in information technology are often touted as a critical means of speeding up and improving management decision making. Yet it has proved distressingly difficult to realize the potential of information technology investments. This is particularly so in business areas such as Human Resources (HR), though the longer lead times traditionally associated with changes in HR systems mean that it is a prime candidate to benefit from information technology. To pull into the lead in global competition, managers must control labor costs, motivate employees to high quality, customer-oriented performance, and continuously search out new and better ways of doing both. These objectives must be met in the face of shrinking head count and a global environment in which employees are more culturally diverse and located throughout the globe. Even the relatively routine tasks of employee record keeping and legal and regulatory compliance are geometrically intensified in this context. Such complexity also demands more sophisticated applications of technology that go beyond simply improving the management of routine tasks. All managers have a stake in exploiting information technology to better manage their human resources. We propose a framework to help managers consider how HR information technology can improve human resources management and contribute to competitive advantage.