Accounting logics as a challenge for ERP system implementation: a field study of SAP

Abstract

Purpose This paper aims to investigate the accounting logic inscribed in the SAP enterprise resource planning (ERP) system and how this accounting logic becomes effective in organizations. The authors draw on the notion of accounting logics by mobilizing the institutional logics literature (Thornton et al., 2012). Accordingly, accounting logics are conceptualized as crucial underlying design principles consisting of a system of beliefs, assumptions and ideas how accounting systems should be designed. Design/methodology/approach The authors adopt a qualitative case study approach conducted in a manufacturing company, hereafter called Wood Plc. The primary data source is qualitative research interviews. Secondary data, such as internal documents, were collected to increase validity and reliability through data triangulation (Ahrens and Chapman, 2006; Scapens, 2004). Findings The paper demonstrates how a particular accounting logic – the Germanic accounting logic – gets diffused throughout the organization by the means of the SAP ERP system, and creates challenges for management accounting practices in local entities. The contribution of the paper is to show that ERP systems can foster the diffusion of a specific accounting logic, which is inherently linked to the SAP system, and which enables a specific version of accounting to work in an organization. Research limitations/implications This paper could be viewed as an extreme case of a German organization using the SAP ERP system with its Germanic accounting logic inscribed to make a German accounting logic work in the entire organization. Consequently, further research could unpack the relationship between accounting logics, ERP systems, accounting systems and their use by studying not only different empirical settings with respect to the organizational context but also the ERP software used by organizations. Practical implications This paper aims to raise the awareness of practitioners of the conceptual underpinnings inscribed in the SAP accounting modules while at the same time pinpointing the potential challenges of implementation generated by the accounting logics. Originality/value The paper complements existing studies on accounting and ERP systems by bringing the accounting logic inscribed in the SAP ERP system to the fore. More precisely, this paper shows that in the wake of SAP ERP implementation, the organization studied spread its assumptions and beliefs on accounting, which are manifested in the Germanic accounting logic inscribed in the SAP ERP system, in the organization. This invoked particular challenges in non-Germanic subsidiaries in making accounting work.

Editorial

“…For example, at the beginning of the industrial digitalization in the 1990s, when first ERP systems were introduced, the customization options were kept to a minimum. Consequently, the introduction of ERP systems led to a homogenization not only of the IT landscape in organizations but also of organizational processes which were adopted to fit the IT systems' structures (Heinzelmann, 2017;Kallunki et al, 2011). More recently, further IT development and its focus on usability has led to an increasing adjustability of IT systems to customers' demands.…”

Introducing ERP System as a Condition of Information Security and Accounting System Transformation

“…Heinzelmann demonstrates that the complexity of introducing and using the ERP system in the accounting and controlling is not only due to its technical nature but also due to their blending with the conceptual logics (with German accounting logics in its case) [29]. The German accounting logics was a model for designing of the modules of business accounting and management in SAP ERP systems [30] [17].…”

“…The above-mentioned features of the German business accounting logics are realized in the basic model of the SAP ERP system configuration. Therefore, German organizations could easier spread German accounting logics on their non-German subsidiary production units with the help of SAP system [29]. Although, it could be a more difficult task for Ukrainian enterprises.…”

Evaluation of Enterprise Resource Planning System Based on SAP Module of Material Management Procurement Function in PT. Kimia Farma Tbk

“…That is because SAP claims that SAP can integrate and coordinate business processes from various fields in the company, which can benefit the company. (Heinzelmann, 2017) But that does not mean that the implementation of SAP is an easy matter and immediately visible results. Various obstacles such as changes, and also rejection from the user often occur in the SAP implementation process.…”

“…Various obstacles such as changes, and also rejection from the user often occur in the SAP implementation process. What is said by (Heinzelmann, 2017), that SAP in accounting is a complex matter, where the outcome is not seen directly. Special language differences and adjustments to SAP's German logic-based business processes also trigger a number of changes and emergence of resistance in organizations.…”