In this era of information, technology has changed the world of businesses many times over. The advent of information technology, computers and internet has increased the impact significantly. IT capabilities have spread its wings in various fields of organisation, HRM is one of them. Human resource management is one of the crucial aspects of an organisation, and its practices such as clearly definition of jobs, participation of employees, formal training and development have given rise to the impact of IT in this segment. This paper highlights the developments in the field of HRM with the advent of IT. It also studies the moderate effect of the source of IT capabilities both external and internal on the relationship between the rate of usage of IT and HRM practices.