The Relationship Between ERP Systems and Budgeting: Uncovering the Limited ERP System Impact on Budgeting

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This paper investigates the relationship between Enterprise Resource Planning (ERP) systems and budgeting to address the limited impact of ERP systems on management accounting. Budgeting is considered as a social phenomenon which requires flexibility for decision-making and integration for management controls. The analysis at the activity level, guided by the concept of 'Conflict' in Structuration Theory (ST), suggests that ERP systems impede flexibility in decision-making. However, the systems have the potential to facilitate integration in management controls. The analysis at the structural level, guided by the concept of 'Contradiction' in ST, concludes that there is a contradiction between them because ERP systems operate in terms of integration alone while budgeting assumes both roles.

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