High Performance IT as Strategic Partner for HR Management

High Performance IT as Strategic Partner for HR Management

Ferdinando Pennarola (Bocconi University, Italy) and Leonardo Caporarello (Bocconi University, Italy)
DOI: 10.4018/978-1-59904-883-3.ch062
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Abstract

The constant growth of the role that information technology (IT) is playing in business today has led to the development of new business models and new business processes (Cline & Guynes, 2001). In the modern business world, characterized by such things as internationalization and cooperation between organizations from different industries, companies are faced with a great many challenges, including: The integration of data sources, applications, platforms, and businesses; The technological and organizational flexibility needed to respond efficiently to changes in the marketplace; The creation of systems that are reliable, robust, and flexible, and that are able to keep pace with the changing needs of their users; Product and service quality. As such, companies are increasingly recognizing the importance of effective IT management (Broadbent & Weill, 1997).
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Introduction

The constant growth of the role that information technology (IT) is playing in business today has led to the development of new business models and new business processes (Cline & Guynes, 2001). In the modern business world, characterized by such things as internationalization and cooperation between organizations from different industries, companies are faced with a great many challenges, including:

  • The integration of data sources, applications, platforms, and businesses;

  • The technological and organizational flexibility needed to respond efficiently to changes in the marketplace;

  • The creation of systems that are reliable, robust, and flexible, and that are able to keep pace with the changing needs of their users;

  • Product and service quality.

As such, companies are increasingly recognizing the importance of effective IT management (Broadbent & Weill, 1997).

As human resources management plays a critical role for an organization’s success (Jackson, Hitt, & DeNisi, 2003), all these mentioned challenges have implications for how human resources are managed. In particular, most of the human resources management has mainly focused on administrative aspects of HR (human resources) (Groe, Pyle, & Jamrog, 1996; Lawler & Mohrman, 2003). Moreover, although numerous studies have studied the potential for the human resource to be a strategic partner, human resources executives have not been strategic partners (Lawler, 1995; Lawler & Mohrman, 2000).The information technology offers the opportunity to free up HR from much of these administrative activities. Then, the human resource function could significantly focus on participating to build the organization’s strategy (Lawler et al., 2003). In fact, human resources information system (HRIS) allows, from one side, a self-service HR administrative activities, and, from the other side, HR to gather strategic data and information in order to contribute to the business strategy formulation. The Lawler et al. study (2003) shows how HR is most likely to be a full strategic partner when an integrated HRIS exists. The globalization of business, the development of more flexible organization structures, the further development of information technology are some of the drivers of the necessity for HR information systems (Groe et al., 1996).

In light of the previous, the goal of managing information technology resources is to be able to identify, select, and assess--and, when necessary, revise the initial decisions--a balanced, consistent set of IT products and services for both in-house users (employees and business owners) and external users (customers, suppliers, partners, and the community).

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Background

Many organizations may be investing in IT to reduce transaction costs and reduce the size of HR function, instead of make it a strategic partner. However, as mentioned in the previous chapter, it is clear the potential contribution of HR function in the business strategy formulation. In order to increase the strategic value-add of HR function, the following considerations should be taken into account by both HR and Top management: human resource is an information-centered activity; IT supports to increase HR focus on and capacity of planning, organizational development and organizational designs; IT supports to turn data into strategically valuable information; IT supports to increase the business knowledge of HR professionals (Groe et al., 1996; Lawler et al., 2003).

Key Terms in this Chapter

TCO (Total Cost of Ownership): These costs can be classified in hardware, software, personnel, availability, productivity, restorability, application costs.

Outsourcing: The situation in which a company chooses to turn to an external provider for one or more (personalized and/or specific) services, rather than handling these services in-house.

Open Source: Generally speaking, any program made available in such a way that it can be used or altered by all users or by other software developers. Open-source software is typically developed through a publicly cooperative effort and is freely available.

Application Service Provider (ASP): For example, a firm that provides access over the Internet to (typically standard) applications and services that would normally have been located within the company.

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