Understanding the ERP System Use in Budgeting

This paper investigates the enterprise resource planning (ERP) system use in budgeting in order to explain how and why ERP system are used or not used in budgeting practices. Budgeting is considered as a social phenomenon which requires flexibility for decision-making and integration for management controls. The analysis at the activity levels, 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 the ERP systems are not widely used in budgeting. This is because the systems support the integration function alone while budgeting assumes both roles. This paper offers the ERP system non-use explanation from an ulitarian perspective. Additionally, it calls for solutions to improve ERP use especially for the integration function.