The Impacts of Enterprise Resource Planning Systems on Accounting Practice – The Australian Experience

Abstract

0 ver the past decade, enterprise resource planning (ERP) system offerings from S N , Oracle, Peoplesoft, Baan, JD Edwards and others have become the dominant business information system software platform for large companies and government bodies in Anglo-American countries (Davenport, 1998).' In Australia, for example, a 1998 survey by the GartnerGroup, CFO magazine and the ASCPA found an average ERP usage rate of 52.7%, ranging from a high of 71.4% in manufacturing to a low of 29.6% in "other services" (Philipson 1999)? This trend reflects an earlier wave of adoption of ERP software in Europe and North America. This rise to dominance of ERP systems represents a fundamental shift in the nature of business information systems. Compared with the often in-housedeveloped legacy systems they have supplanted, EFP systems offer significantly increased sophistication, enabling integration of the software and underlying relational databases across all functional areas (accounting, human resources, operations and logistics, sales and marketing). This potentially allows the organisation to have a "seamless integration" of all the information flowing through it, and presents "managers who have struggled, at great expense and with great frustration, with incompatible information systems and inconsistent operating practices, the promise of an off-the-shelf solution to the problem of business integration" (Davenport 1998, p. 121).However, as Davenport and other commentators have noted, gaining such benefits is not without difficulties. ERP systems are complex software systems presenting major technical challenges and usually requiring large investments of time and money. More important, they confront the organisation with a significant management problem. To achieve their high level of integration, ERP systems have their own internal logic of "best practice" business processes. When implementing an ERP system, the organisation needs to reconcile the technical imperatives of the system with strategic and management needs. Unlike highly customised legacy systems, ERP systems require the This paper reports on the enteqbrise resource planning (ERP) systems experiences of Australian companies. I t examines the degree of information system integration and associated benefits that respondent companies believe they have achieved, and the impact of ERP systems on the adoption of new accounting practices.The results indicate that while ERP users report high levels of information integration for many functional areas, the pattern is similar to that of nonusers. Also, ERP systems seem to perform better in transaction processing and ad hoc decisionsupport than in sophisticated decision-support and reporting. Finally, ERP systems were found to have little influence on the use of new accounting practices.

Accounting Information Systems in an ERP Environment and Tunisian Firm Performance

“…Hypothesis H1 confirmed that information quality influences accounting practices, in accordance with Booth et al (2000), Granlund and Malmi (2002), Galani et al (2010) and Kanellou and Spathis (2011). One possible explanation for this result proposes that the extended information provided by the AIS would allow companies to diversify their use of accounting practices.…”

“…Indeed, Granlund (2001) identified that the establishment of an advanced information technology would introduce a change in management accounting practices. In the particular case of ERP systems, the latter is considered an important source of new accounting practices (Booth et al, 2000).…”

Cost-Informed Operational Process Support

“…Notwithstanding these works, few studies exist where a structured approach to the analysis of cost factors in a process-aware information system is undertaken. Since the introduction of ERP systems, a number of studies have been conducted on the effects of ERP systems on traditional management accounting practices [1,7,8]. Recently, Vom Brocke et al proposed an information model to link the ARIS accounting structure with ARIS process semantics using Event Driven Process Chains (EPC) [21].…”

Challenges and Success Factors of ERP Systems in Australian SMEs

“…Based on the employment size classification of SMEs, Table 2 shows a comparison of the survival rates of small, medium and large businesses in Australia between June 2007 and June 2011 [28]. Implementing an ERP system is considered an important strategy for establishing new robust accounting practices for improving the SME survival rate [29]. However, SMEs show resistance to ERP adoption due to the constraints and barriers involved in the domestic and global contexts, and these need to be studied from the perspectives of both ERP consumers, as well as vendors.…”