How Human Resource and Information Systems Practices Amplify the Returns on Information Technology Investments

Abstract

This study examines the important roles that human resources (HR) for information technology (IT) professionals and information systems (IS) practices for all workers in an organization play in shaping returns on firms’ IT investments. In particular, we consider how incentives, autonomy, and training for IT professionals can enable a firm to better leverage the value of its IT investments. We argue that well-trained, motivated, and empowered IT professionals can help firms make better strategic choices in allocating IT investments and implementing IT projects. We also demonstrate how this moderating relationship depends upon collaborative IS and autonomy-enhancing IS practices that affect other knowledge workers in the firm. We leverage archival data for 228 firms with 736 firm-year observations and document two key findings. We find (1) that empowering HR practices for IT professionals positively moderate the effect of IT investments on firm performance, and (2) that the alignment between empowering HR practices for IT professionals and firm-wide collaborative IS practices enhances the value that firms derive from IT investments. Our results suggest that the business value of IT investments is linked to the rewards and opportunities offered to IT professionals, who have a pivotal role in the effective deployment of IT in organizations.