In every organization, effective Human Resource Management (HRM) is vital in order to meet the market demands with well-qualified employees at all times. The objective of this paper is to identify the challenges and prospects of implementing Electronic Human Resource Management (E-HRM) system in developing countries. Technology and HRM have a broad range of influences upon each other, and Human Resource (HR) professionals should be able to adopt technologies that allow the reengineering of the HR function, be prepared to support organizational and work-design changes caused by technology. HR technology is increasingly used by small, medium, and large employers to meet the needs of its stakeholders. What sets high-performing organizations apart from others is how they utilize cutting edge technology to deliver HR services. E-HRM provides the possibility to store and repeatedly use the information as electronic database, which could be accessible by anyone, anytime and anywhere within the organization. Maximum benefits can be derived from the use of IT by changing work processes, which can be more challenging than the purchase and integration installation of the technology itself. The analysis of this paper depends on secondary data like journals, books and, online resources.