Digital Transformation in the Software Industry: A Firm’s Perspective

Abstract

This study explores digital transformation in Pakistan’s software industry from a firm-level perspective, with a specific focus on the integration of artificial intelligence in human resource management and recruitment practices. Using a qualitative case study approach, in-depth semi-structured group interviews were conducted with human resource managers of a leading software firm to capture lived managerial experiences of artificial intelligence adoption. The findings reveal that artificial intelligence-driven tools have significantly enhanced recruitment efficiency, reduced administrative workload, and transformed human resource roles from operational gatekeeping to strategic decision-making. However, the study also identifies emerging challenges, including algorithmic bias, false candidate matching due to generative artificial intelligence use by applicants, employee resistance, and ethical concerns related to transparency and fairness. To address these risks, the firm employs a strict human-in-the-loop model, ensuring that artificial intelligence functions as a decision-support system rather than a final authority. The study concludes that successful digital transformation in human resources depends not only on technological capability but also on strong leadership, organizational readiness, continuous upskilling, and ethical governance, offering practical insights for software firms and policymakers in developing-country contexts.