Accounting and the ERP Systems: A Case Study

Literature Review

In the mid-1990s, new hardware and software technologies began to emerge, providing companies with the ability to take advantage of systems that interconnected the whole organization and all its business (Cooper & Kaplan, 1998). These systems, formerly called Enterprise-Wide Systems (EWS), are today best known as Enterprise Resource Planning (ERP) systems, which can be defined as software packages that allow the full integration of the information generated and processed within the companies (Davenport, 1998; Ghosh, Yoon, & Fustos, 2013). These systems are organized in different modules, and integrate all corporate information in a single central database (Dechow & Mouritsen, 2005), managing to cover activities from areas as diverse as finance, accounting, human resources, logistics, production, quality, sales, projects, maintenance and marketing (Davenport, 1998). Several researchers argue that databases are indispensable for the management of today's organizations (Azaiez & Akaichi, 2016; Ramos et al., 2017). The operating process of ERP systems is summed up by the existence of a database, that collects and feeds these data into applications organized by modules supporting most of the company’s activities. As new information is entered into the system, all related information is automatically updated (Davenport, 1998). The success of this kind of software has been exponential, and during the 90s still has turned the famous German company SAP (Systems, Applications and Products in Data Processing) into the fastest growing software company in the world because of its main product SAP ERP (Davenport, 1998). According to Scapens, Jazayeri and Scapens (1998) the main SAP modules are divided into finance and accounting, human resources, manufacturing and logistics, and sales and distribution. Several studies have investigated which are the most implemented modules, having concluded that the financial accounting and materials management modules are the most chosen ones (Spathis & Constantinides, 2004; Parlakkaya, Cetin & Akmese 2011). ERPs are thus presented as systems that include the best organizational practices, procedures and tools, able to integrate, analyse, and report information from all areas of business, boosting organizational excellence through full integration (Madani, 2009; Parlakkaya et al., 2011).