<abstract xmlns="http://www.w3.org/1999/xhtml"><bold>Background:</bold> Companies can improve their business performance, increase revenues and reduce costs by enhancing their information technology (IT) capability. On the other side, there is an increasing importance of human resource management (HRM) practices related to IT utilization, which are important for the business performance of a company in the rapidly changing knowledge-based economy.<bold>Objectives:</bold> The objective of this paper is to analyze the relations among IT capability, HRM capability and the firm’s performance outcomes.<bold>Methods/Approach:</bold> The paper uses survey data and Structural Equation Modeling to analyze the relationships among IT capability, HRM capability and firms’ performance.<bold>Results:</bold> This paper reveals that IT capability to some extent determines firms’ business performance but it plays more important role in enhancing HRM capability. In addition, HRM capability significantly impacts business performance.<bold>Conclusions:</bold> The findings indicate that managers should not focus on allocating resources only for IT investments. In order to achieve better business performances, these technologies need to be used to support all business processes including HRM activities.</abstract>

Background: Companies can improve their business performance, increase revenues and reduce costs by enhancing their information technology (IT) capability. On the other side, there is an increasing importance of human resource management (HRM) practices related to IT utilization, which are important for the business performance of a company in the rapidly changing knowledge-based economy.Objectives: The objective of this paper is to analyze the relations among IT capability, HRM capability and the firm’s performance outcomes.Methods/Approach: The paper uses survey data and Structural Equation Modeling to analyze the relationships among IT capability, HRM capability and firms’ performance.Results: This paper reveals that IT capability to some extent determines firms’ business performance but it plays more important role in enhancing HRM capability. In addition, HRM capability significantly impacts business performance.Conclusions: The findings indicate that managers should not focus on allocating resources only for IT investments. In order to achieve better business performances, these technologies need to be used to support all business processes including HRM activities.

Human Resources or Information Technology: What is More Important for Companies in the Digital Era?

School of Economics and Business, University of Sarajevo, Bosnia and Herzegovina

Business Systems Research Journal

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Background: Companies can improve their business performance, increase revenues and reduce costs by enhancing their information technology (IT) capability. On...

Human Resources or Information Technology: What is More Important for Companies in the Digital Era?

Published Online: May 28, 2016

Page range: 35 - 45

Received: Oct 01, 2015

Accepted: Mar 07, 2016

DOI: https://doi.org/10.1515/bsrj-2016-0003

Keywords
information technology capability, human resource management capability, business performance, dynamic capability view

© 2016 Lejla Turulja et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Human Resources or Information Technology: What is More Important for Companies in the Digital Era?

Published Online: May 28, 2016

Page range: 35 - 45

Received: Oct 01, 2015

Accepted: Mar 07, 2016

DOI: https://doi.org/10.1515/bsrj-2016-0003

Keywordsinformation technology capability, human resource management capability, business performance, dynamic capability view

© 2016 Lejla Turulja et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
information technology capability, human resource management capability, business performance, dynamic capability view