Title

HUMAN AGENCIES’ INTERPRETATION OF IS TECHNOLOGIES ENABLING AND CONSTRAINING POWER IN BUDGETING

Abstract

Budgeting is one of the oldest and the most popular organizational planning and controlling technology despite of recent criticisms on its values. Although budgeting is nothing new, information system (IS) technologies are not developed to fully support the entire budgeting process as it is commonly found that organizations pick and choose different IS technologies during the course of budgeting cycle. Based on the structuration theory, this paper uses the concept of human agencies’ interpretation to examine how users interpret different types of IS technologies commonly used in budgeting such as enterprise resource planning (ERP) system, spreadsheets and business intelligence (BI). The research question is: what are human agencies’ interpretations of enabling and constraining power of different IS technologies used in budgeting? The empirical data suggests that there is a mismatch between the flexibility and consolidation nature required in budgeting process and different IS technologies employed. ERP system offers hard transactional data which is necessary to predict the future but it does not offer flexibility. Spreadsheets are commonly employed in budgeting because they allow flexibility for users to insert any external soft information needed in budget construction but they are not ideal for budget consolidation. BI is often installed to improve efficiency in budget consolidation and conduct simple variance analysis. The paper concludes that no single IS technology tool is ideal for budgeting. Users must constantly extract, transfer and load information between these systems to fully exploit the enabling powers and avoid the constraining powers embedded in each system.

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