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Management Accounting Research

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ccounting logics, reconfiguration of ERP systems and the emergencef new accounting practices: A sociomaterial perspective

rica L. Wagnera, Jodie Mollb,∗, Sue Newell c,d

School of Business Administration, Portland State University, 631 SW Harrison Street, Portland, OR 97201, United StatesManchester Business School, University of Manchester, Oxford Rd, Manchester M13 9PL, UKDepartment of Management, Bentley University, 175 Forest Street, Waltham, MA 02452, United StatesWarwick Business School, UK

r t i c l e i n f o

eywords:nterprise Resource Planning systemsccounting logicsociomaterialityeconfigurationegacy assets

a b s t r a c t

This paper extends our knowledge on how software-based accounting tools might workeffectively within an organization. The empirical data that we focus on are events thatunfolded following the introduction of a new ERP system at an Ivy League University. Wedescribe a negotiation process that occurred after roll-out that resulted in a reconfigurationof the ERP to integrate some of the legacy functionalities that were familiar to organiza-tional participants and which were considered by them to provide a more effective way tomanage their finances. Our contribution to the literature is not only to show the importanceof such post-roll-out modifications for creating a working information system, but also toextend previous accounts of non-linear accounting change processes by emphasizing howthese modifications are dependent on the particular entanglement of users and technology(the sociomaterial assemblage) rather than either features of the technology or the agencyof the humans involved. Moreover, our analysis of the case data suggests that management
accounting in particular may not be easily captured in ERP packages, even where the tech-nology architectures are supposedly designed for a particular industry. The case data alsopoints to issues of affordability and the power of communities of practice as mediating theextent to which these familiar accounting logics may become integrated within the ERPsystem.
. Introduction

In the face of competitive global markets and constantnnovations in technology and business models, changeso accounting information systems are often implemented.n particular, many organizations adopt accounting soft-

are packages (as variants of Enterprise Resource Planning
ERP] systems) to improve the transaction processing capa-ilities (Booth et al., 2000; Dechow and Mouritsen, 2005),o-ordinate record keeping (Chapman and Kihn, 2009),
∗ Corresponding author.E-mail addresses: [email protected] (E.L. Wagner),

[email protected] (J. Moll), [email protected] (S. Newell).

044-5005/$ – see front matter © 2011 Elsevier Ltd. All rights reserved.oi:10.1016/j.mar.2011.03.001

© 2011 Elsevier Ltd. All rights reserved.

reduce costly duplications of data (Dillard and Yuthas,2006; Scapens and Jazayeri, 2003), enable centrally storedinformation, making it easier to create different types offinancial reports (Chapman and Chua, 2003) and improvefiduciary control (Wagner and Newell, 2006).

Much of the literature in accounting has assumedsuch technology to be an ‘exogenous’ force of change foraccounting work routines (Granlund and Malmi, 2002;Rom and Rohde, 2006, 2007; Scapens and Jazayeri, 2003).From this view, the functionality of the system is set whenthe adopting organization “flips the switches” of thousands
of embedded templates. These templates provide the orga-nization with a catalogue of standard work practices –the so-called ‘best practice’ logic purportedly embeddedwithin the product (O’Leary, 2000; Wagner and Newell,
dx.doi.org/10.1016/j.mar.2011.03.001

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182 E.L. Wagner et al. / Management
2004; Wagner et al., 2006; Sia and Soh, 2007). Once theconfiguration options are selected this will supposedlydetermine how accounting will be practiced. However,technology alone cannot force practice change, especiallywhen the ‘best practice’ design logic is misaligned with thelegacy practice logics. Where such incompatibility existsresistance is often encountered (Berente et al., 2007). Thesekinds of problems are prominent in relation to the imple-mentation of ERP systems because their integrated naturemeans that the work processes of different groups anddepartments become more tightly coupled than was oftenthe case in the legacy system environment when eachdepartment/function had its own stand-alone IT system.

Research shows that often organizations only realize theincompatibility in practice logics once the configured sys-tem is rolled-out and users find that they can no longercarry out their legacy work practices and so begin to resist(Wagner et al., 2010; Leonardi and Barley, 2008). This leadsmany organizations into a prolonged period of negotiationand may result in substantial customizations to the ERP(Wagner and Newell, 2006) or other adaptations, despitethis practice being discouraged by vendors and traditionalsystems development theories (Boudreau and Robey, 2005;Berente et al., 2007, 2008; van Fenema et al., 2007). Forinstance, prior field studies (Malmi, 2001; Granlund andMalmi, 2002) have demonstrated that as ERP implemen-tation projects unfold, and there is realization that thesystem is unable to cope with the accounting demands,organizations are prone to developing separate spread-sheet solutions or specialised software such as Cognos thatcan provide more flexible analysis of the accounts. Thesestudies have shown that specialized software used to cap-ture the specifications required of advanced managementaccounting techniques, such as the balanced scorecard andactivity based costing, may over time be added to ERP-typetechnologies. That ERP systems might require such modi-fication has led several scholars to be critical of using themfor management accounting purposes arguing they are toocomplex for this type of architecture (see Rom and Rohde,2007, p. 50). They suggest that ERP systems be viewed astransactional management systems that are not designedfor strategic level management. Furthermore, stand-alonesoftware systems, which can provide a more user-friendlyand flexible basis for analysis and reporting and more adhoc management accounting practices, may provide a lessrisky and more cost effective alternative (Rom and Rohde,2006; Hyvönen, 2003). But, evidence from scholars such asChapman and Kihn (2009) suggest that managers can besatisfied with systems that possess high levels of integra-tion even where they do not lead directly to improvementsin performance. In keeping with the later cadre of research,we extend knowledge related to how ERP technologies aremade to work as systems (Chapman, 2005) through a non-linear process of change (Quattrone and Hopper, 2001). Weprovide an analysis of a case that shows how ERP systemscan be reconfigured to incorporate legacy practices and sat-isfy the flexibility (i.e. precision and frequency) demanded
of managerial accounting. In doing this, we demonstratenot only the importance of post-roll-out modifications forcreating a working information system, but also emphasizehow these modifications are dependent on the particular
ing Research 22 (2011) 181– 197

entanglement of users and technology (the sociomaterialassemblage). In adopting this perspective, we seek to gobeyond realist accounts that focus on the features of thetechnology determining structures or social construction-ist accounts that emphasize the agency of the humansinvolved (Leonardi and Barley, 2010). We identify how con-texts of use will differ in terms of the types and scopeof modification that are made in the post-roll-out phaseand thereby extend the literature on accounting change asnon-linear and relational in nature (in particular, Andonet al., 2007; Dechow and Mouritsen, 2005; Quattrone andHopper, 2006).

In this paper then, we do not reject the potential use-fulness of an ERP system for management accounting butrather argue that the value of any information system,whether it be integrated or standalone, can only be under-stood by focusing on how accounting, IT and its usersare entangled to produce managerial accounting practice.With this in mind we focus on two research questions:(1) what and how are accounting logics encoded withinERP systems? and (2) how, in the process of users inter-acting with the ERP and retrieving information, do newaccounting practices emerge and does the system becomereconfigured to support them? These questions allow us toconsider how the logics underpinning practice are sensitiveto local circumstances and cannot be fully specified in any“strongly determinant way” (Suchman, 2007, p. 53) eventhough ERP-architectures inscribe, in their vanilla-state,particular ideals about practice, i.e., particular practice log-ics.

We explore the questions by examining the post-implementation negotiations of a troubled ERP project inan Ivy League university. The project was at risk of beingabandoned because of the practice logics that were initiallyconfigured into its grant accounting module. The ERP wasconfigured to support the financial accounting needs of thecentral administrative function composed of professionalaccountants. However, the integrated nature of ERP meantthat these system architectures were not sufficiently flexi-ble for enabling faculty to manage their research projectbudgets in their preferred ways. We thus identify howthe ERP-system was customized to enable the university(hereafter ‘Ivy’) to accommodate the practices of both thefinancial accounting centre and the faculty managing theirproject budgets.

The remainder of the paper is structured in 4 sec-tions. In Section 2 we discuss the key concepts whichinform the sociomateriality lens, enabling us to “seein the data” the process of negotiation that occurredwithin the case of a university in the post-implementationphase of their ERP project, ultimately resulting in thatsystem drifting to eventually support some legacy-typepractices even though initially these were explicitlyexcluded. Section 3 outlines our research methods. Sec-tion 4 presents the case description and analyzes twogrant accounting practices and the negotiation processthat ensued at go-live. In Section 5 we discuss the mean-
ing and implications of our analysis for implementingenterprise-wide accounting functionality within organi-zations. The paper concludes with suggestions for futureresearch.

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. A sociomateriality perspective of accountingractice

.1. Nature of sociomaterial practice

We adopt a practice theory perspective to yield insightnto how accounting is made workable when it is entan-led with an ERP system. This approach is becomingncreasingly popular for its ability to offer new and inter-sting insights to accounting change (cf. Dechow andouritsen, 2005; Jørgensen and Messner, 2010; Macintosh

nd Quattrone, 2010; Pentland et al., 2010). Practice the-ries focus on people’s everyday activities, analyzing howhey are produced and reproduced in a particular historicalnd social context (Levina and Vaast, 2005). This approachonsiders accounting as a thing that people do. This meanst cannot be reduced to a set of routines that are enacteds designed across time and locations (cf. Scapens, 1994;urns and Scapens, 2000). The focus on practice reflectshe idea that it is at the level of everyday activity thatearning occurs as people and their technologies take onarticular shapes and meaning through situated use. Prac-ices are considered to be in a constant state of change,lbeit some changes are very small. This means that therere always inconsistencies, even when people are suppos-dly carrying out the same practice: ‘pursuing the samehing necessarily produces something different’ (Nicolini,007, p. 894).

There are many variants of practice theory1; how-ver, here we analyze technology–human interactionrom the sociomateriality practice perspective outlinedy Orlikowski (2010) and Suchman (2007). This perspec-ive does not assign agency either to persons or thingsut considers the social and technological to be ontologi-ally inseparable, yet constitutively entangled (Orlikowski,010; Orlikowski and Scott, 2008). It provides a way tonderstand how meanings and materialities are inex-ricably related and influence the form of (accounting)ractice.

Importantly, this ‘relational ontology’ suggests thatnce one begins to look at an integrated information systemike an ERP, despite it retaining an organizational identity,

ultiple person/technology assemblages may be observedhat help to explain how accounting can be interpreted andnacted differently by users even in the same organizationQuattrone and Hopper, 2001, 2006). It is for this reasonhat Quattrone and Hopper (2006) refer to such systems aseing ‘heteromogeneous’. This occurs, they argue, becausehe logics underpinning accounting practice are sensitiveo local circumstances and cannot be fully specified evenhough ERP-architectures inscribe, in their vanilla-state,articular practice logics. In sociomateriality terms thisocus on how relations between humans and technologiesecome enacted in practice is referred to as ‘performa-
ivity’, which helps us to understand how and why suchystems are prone to reconfiguration.
1 Ahrens (2009) suggests some of the more commonly used approachesn accounting include governmentality, actor network theory andccountability.

ing Research 22 (2011) 181– 197 183

2.2. Relating notions of reconfiguration to accountingand ERP technology

In a packaged software product, the way the ERP tech-nology is initially constituted is influenced by the particularconfiguration options selected plus any customizationsintroduced. The accounting logics encoded in the softwaremay be designed with certain problems in mind (i.e. costingand performance measurement) (Dechow and Mouritsen,2005) but they also involve inevitably vague categories (i.e.inventory) so that they can capture a broad range of orga-nizational activity (Chapman and Chua, 2003). Trade-offsbetween organizational and technical concerns will alsoadd to incomplete representations of the organization’scircumstances and this enables those downloading andinterpreting accounting information produced by the ERPsystem to translate it and use it in different ways depend-ing on their intentions and adaptive abilities (Bloomfieldand Vurdubaki, 1997; Busco et al., 2007; Dechow et al.,2007; Dechow and Mouritsen, 2005). More bluntly put,an ERP system cannot be understood to present informa-tion that objectively reflects some reality, or as neutraltechnical solutions and tools (Ciborra, 2002, p. 68; inaccounting see Hopwood, 1983, 1987). The designer2/usersviewpoints can be and are influenced in the process ofdownloading, interpreting and using the data. It is thisreflexivity between the ERP-system and the user that sug-gests that the design of an ERP-system with integratedaccounting functions is not something that stops when asystem goes live. Rather design is an on-going socioma-terial practice performed over time (Suchman, 2007, p.278).

Previous studies of accounting and IT, borrowing fromCiborra (2002), use the term ‘drift’ to describe the processesby which these systems change (Quattrone and Hopper,2001; Andon et al., 2007; see also Macintosh and Quattrone,2010). It has been argued that drift “resembles incom-plete attempts at organizing” (Quattrone and Hopper, 2001,p. 428) and provides an explanation of the many waysin which IT systems can be altered through encounterswith those using them such as sabotage, learning-by-doing, or plain serendipity (see Ciborra, 2002, p. 89 fora more in-depth discussion). This concept enables oneto understand how an organization might end up usinglegacy practices when new IT is introduced even whereparticular legacy practices were purposefully ‘designedout’ of the IT architecture. For analytical purposes, thisperspective suggests it is important to explore the ini-tial design/configuration, who was involved/excluded, andthen to follow through to examine how the sociomaterialassemblage is re-configured through a process of nego-tiation (Ciborra, 2002; Orlikowski and Scott, 2008). Themangling of the social and technical thus produces a dialec-tic that Pickering (1993) depicts as a series of resistances
and accommodations; here we explore this dialectic acrosstime and across practice communities.
2 In this paper we use the term designer since the project involveddesigning a new ERP for the university market.

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accounting practices. Next, we undertook a systematic andcareful reading of the transcripts using the three theoret-ical constructs introduced in section two: sociomaterial


2.3. Communities of practice, accounting logics andrelationality

As Law and Singleton (2005) indicate – the nature ofa thing depends on its nests of relationships (both thoseabsent as well as those present). For example, with theimplementation of an ERP system people may not be able toget the accounting information that they need or expectedto be able to get. Thus, there can be an information asym-metry between people and machines limiting the scope ofinteraction, and the capacity for accounting practice andsubsequent action (Suchman, 2007). This view assumesthat ERP is an essential part of practice in organizationsand by inscribing specific accounting logics sets limits onforms of calculation. In Orlikowski’s (2005) terms thesematerial arrangements ‘scaffold’ social activity in particularways within practice communities. In the process of usingthe system, individuals and/or communities may end upquestioning these logics.

In the past, practice communities have been rela-tively autonomous so that people/technology assemblageshave evolved in distinct ways, even if they are using the‘same’ technology. With an integrated ERP this indepen-dent evolution becomes more difficult and the multiplesociomaterial assemblages become more mutually consti-tutive. Thus, if one practice community decides that theaccounting logics inscribed within the ERP should changeto better reflect the economic reality of the local entityor its products or processes, they would need to imposethis on others who may believe the existing practice to beadequate. Unless those communities with differing prefer-ences regarding what are the appropriate accounting logicscan be decoupled, so that each could use their preferredform of calculation, a period of negotiation would begin.Such decoupling is more difficult in an ERP environment,so the emergent sociomaterial assemblage within anyparticular practice community is restrained by other socio-material assemblages – one practice community cannotevolve the system without it influencing others who maythen resist attempts to modify the technology. Conflict isgenerated because for some communities the co-evolvingERP may enhance the sociomaterial relationship (as whenan accountant in the central office gets data from all dis-tributed departments via the ERP in one format that makeshis/her job of reconciliation easier) while in other casesit may distract from the relationship (as when the facultymember can no longer get the information that s/he feelsis needed from the ERP to manage a research budget).

The sociomaterial practice perspective that we describein this section is designed to provide a more inclusive viewof how accounting practices emerge from the complexand shifting assemblages between the accounting calcula-tions, the IT architecture and the people in the organization(Orlikowski, 2010). We next describe the methodology thatallows us to see these shifting assemblages.

3. Research methods

The empirical sections of this paper are informed by alongitudinal case study (138 interviews with 53 employ-ees) (see Table 1) between June 1999 and April 2010. The

ing Research 22 (2011) 181– 197

majority of the field work was conducted over the courseof 18 months between June 1999 and August 2000 but aseries of follow-up interviews were conducted with a sub-set of the Ivy population in 2002, 2005, and 2010 in order tokeep current with the state of the ERP and administrativework practices at the University.

The 18-month intensive fieldwork phase correspondedwith the implementation and post-implementation of theERP project. The first author made four visits to the fieldsite where she was embedded within the ERP project envi-ronment for eight weeks at a time (summer 99, winter99, spring 00, and summer 00). During these intensivedata collection periods the researcher attended meetings,reviewed formal documentation, and conducted inter-views. Years prior to conducting this study, the first authorwas employed by Ivy as an accountant. This proved tobe helpful for understanding Ivy University norms andcommunicating using local colloquialisms. The other twoauthors became involved only after the field study wascomplete.

Recognizing the performative nature of some language,a narrative interview convention was adopted in order toavoid asking leading questions.3 The narrative interviewconvention provides a time frame to structure the inter-view [“Tell me what happened since we last met.”] and thenencourages uninterrupted storytelling related to issues ofcentral importance to the interviewee (Bauer, 1996). Roughtranscripts of each interview were produced directly fol-lowing the day’s meetings and analyzed in terms of actorsand issues discussed. Recurrent themes were followed upin the next round of interviews in order to gather mul-tiple perspectives of the same situation and develop anunderstanding of the negotiations that were central in peo-ple’s minds at the time. This approach was also helpfulfor reaching those actors who might have remained ‘silentvoices’ (Star, 1991), because the field researcher was guidednot only by interviewee referrals, but also by contactingallies and controversial agents whose names arose in theinterviews. When a reference was made to a group, cause,or action attributed to nonhumans such as the ERP itself,the researcher interviewed a delegate and reviewed tech-nical documentation (Pouloudi and Whitley, 2000). Aftereach phase of fieldwork, the first author “re-transcribed”the rough transcripts in order to communicate the “spo-ken features of discourse” such as tone, mood and pace ofthe narration (Riessman, 1993), and to fill in all missingnarrative.

The analysis in this paper represents a re-examinationof the original data focused on specifically contributing tothe accounting literature related to the entanglement ofaccounting logics and ERP software. The data was first ana-lyzed with the intention of understanding the logics of Ivy’s

3 Follow-up interviews in 2002, 2005 and 2010 were semi-structuredin that several specific questions were asked by the field researcher andinterviewees were also free to tell stories about the issues that were mostprominent to them about recent developments.

E.L. Wagner et al. / Management Accounting Research 22 (2011) 181– 197 185

Table 1Interviews conducted at Ivy League University.

Participants Community ofpractice

Summer 99 Winter 99 Spring 00 Summer 00 Summer 02 Summer 05 Spring 10

6 Centraladministrativeleader

3 1 5 3 2 2 2

9 Project managers 8 5 6 6 1 1 017 Project team

members17 12 11 11 1 0 0

32 Total centraladministrationand project team

28 18 22 20 4 3 2

12 End user 6 5 12 5 0 0 09 Faculty 0 4 6 3 0 0 0

21 Total faculty and 6 9 18 8 0 0 0

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ractice, reconfiguration, and relationality. This enableds to identify several episodes of negotiation from whichhe entanglement of accounting logics and IT architecturesould be observed to produce a change in the accountingractices that were used within Ivy. We focus on these inhe empirical sections of the paper to understand the vari-nces between the accounting logics inscribed in the ERPystem and those that had shaped the accounting practiceshat had been improvised by staff. We were thereby able tompirically examine the modification of both the softwarend work practices which has not received much attentionn the accounting literature.

. The case: findings and analysis

In this section, we first describe the organizationalontext. Next, we consider the accounting logics underpin-ing the legacy practice of commitment accounting and

ts replacement practice time-phased budgeting. Follow-ng this we examine the negotiation process that occurredeading to the emergence of new accounting practices and

reconfigured ERP system.

.1. Organizational context

“Ivy” University is one of the eight Ivy League institu-ions located in the Northeast region of the United Stateshat are grouped together for their academic excellence andelective private education. The governance structure ofvy is relatively decentralized with administration takinglace in the disparate academic and support departmentsnd then consolidated and reconciled centrally in order toeport financial status and meet regulatory concerns.

The lifeblood of a research university is the receiptnd effective use of research grant monies. Ivy has over000 different grants for which they have fiduciary respon-ibility. Grants and contracts revenue account for closeo 30% of the University’s total operating budget. Withinvy, grant activity is ‘rolled-up’ and reported alongside
ll other University funds for two main reasons. First,mproper management of grant dollars can potentiallyncrease the University’s risk position. Grant related activ-ties are closely scrutinized by legal counsel and Ivy’s
28 4 3 2

Internal Audit department who work in collaboration withexternal auditors. Consequently, audit compliance is a con-cern to Central leadership and bears significance on anydecisions regarding modernization of Ivy’s administrativesystems. Second, the mismanagement of grant funds canbecome a liability for the institution. As such, Central lead-ership is motivated to decrease inconsistencies in practiceacross faculty grants.

From the academic perspective, when a faculty mem-ber is awarded funds from an external grant agency thereare certain reporting requirements tied to the use of themonies. Funding bodies typically make awards based onthe initial monetary requests in the grant applicationwhere detailed categories of expenses submitted in theapplication sum up to the total grant award. PrincipalInvestigators (PIs) on grants usually have multiple pro-posals and awards ongoing at any given time meaningthat their scientific activities are ‘project driven’ but theUniversity general ledger and chart of accounts do not sup-port project-oriented reporting. Faculty are concerned withscientific endeavours that are enabled through the grantfunding. This often means that a PI will spend grant fundsbased on how much grant money remains without everwriting a formal plan for how the funds should be spentover time. The various practices faculty employed in suchreporting activities lead to inconsistencies in Ivy’s overallaccounting practices.

In this climate, Ivy embarked on an ERP project toreplace all administrative systems and create an ‘inte-grated operating platform for the 21st century’. Thechoice of an enterprise computing model was expected toincrease fiduciary control and decrease audit risk whilefunnelling more administrative responsibilities from thecentral administration to academic and support depart-ments. The introduction of an ERP is an example of asituation where Ivy leadership anticipated change around a‘best practice’ ideal. Theoretically, however, we understandthat even though an ERP-architecture would inscribe a par-ticular grant accounting logic, actual accounting practice
will be sensitive to local circumstances (Suchman, 2007).
Ivy contracted with a single software vendor (“Vision”)to adapt their government-ERP system by developing twonew modules uniquely needed for the higher education

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Hopper, 2006; Hyvönen et al., 2006, 2008; Granlund, 2007).Over a short period of time the sociomaterial assem-

blage was upset and the accounting practices began to


context (including managing projects associated with grantawards) that would be first implemented in Ivy. Visionwas expected to provide a robust financial system thatwould integrate accounting and budget functionality withall other administrative functions. This strong financialfunctionality drove vendor selection:

“I heavily leaned in [the] direction of wanting to go withthe strongest financial system. I thought that the largestpay-off from the project, when you really looked at it,ultimately would be in better financial data and the abil-ity to do more interesting things on the clinical andgrants management side. . .[these] things seemed to mewould drive the process to create a robust business envi-ronment.” [VP for Finance and Administration, summer1999]

Ivy conducted system-modernization and business-process redesign efforts within the key functional areas offinancial management, human resources and payroll, andgrants and contracts administration. The financial manage-ment components included general accounting, financialplanning and reporting, purchasing and accounts payable.

Because of the importance attached to the managementof project funds, the capability of the system to monitor thepresent state of accounts in relation to past expectationsand future plans were key criteria in designing the sys-tem. It was also rationalized that an integrated approachwould simplify future upgrades and promised to mini-mize the need for expensive migration efforts later on.Institution-wide all-fund budgeting would also be possiblewithout time-consuming and error-prone manual recon-ciliations. Such motivations are not uncommon especiallywhen seeking to retrieve accounting-based information inan integrated manner to create different types of reports(Chapman and Chua, 2003). Ivy’s academic communi-ties, that had historically been relatively autonomous andevolved practices that were distinct, would now becomemore interdependent. This approach was expected to“professionalize the workforce” by shifting the types ofquestions and analyses that faculty and their support staffwere asking with regards to their financial position:

“By making a decision to go with [Vision] finan-cials senior management either consciously or semi-consciously – I think it was for former – was making itimpossible for [Ivy] to continue doing business in frag-mented silos. Like it or not, you’ve got to work with anew way of accounting. It’s integrated – it’s slower, it’sa pain in the ass. . .and the blue-haired ladies who usedto do it the old way for years decide it’s absolutely ter-rible – they don’t want to do it ‘cause its not Ivy’s way.But implementation is about setting up an environment.You make a set of decisions – a set of changes at the topthat force change regardless of whether it’s consensus ornot – ‘cause you say – you change their ability to do it anyother way. You just can’t do grant accounting like youused to do grant accounting! Nothing you do is going to
change that – no amount of moaning is going to changeit. . .They can fire [the VP], they can fire [the controller],they can fire me, but nothing’s going to change the fun-damental you can’t go back and you can’t spend enough
ing Research 22 (2011) 181– 197

money to make it look like it used to. . .You don’t likeit? You’re out of the consensus picture. If you are moreinclined to accept the changes and deal with them, thenyou are in the narrow universe of people we will work tohave consensus with.” [Technical team leader, summer2000]

Academic constituencies4 and Central administratorsall recognized the importance of moving away from dis-crete silos of activity to an integrated and more transparentaccounting practice to manage institutional risk, complywith regulatory bodies, avoid litigious hazards, and actas competent fiduciaries. The Director of Financial Plan-ning, a spokesperson for Ivy’s institutional perspective,stressed the importance of accountability and control forIvy’s future:

“. . .Certainly the motivation for having this more highpowered enterprise software is that the place hasbecome more complex and we need better data. We needto make better decisions based on data. . .it’s a recog-nition of the need to do that because we’re running ahuge financial behemoth. We’re the highest gradedfinancial institution in the state. All these. . .for-profitcompanies aren’t rated as highly as we are. We’re ‘TripleA’: ‘Triple A’ in both Moody’s and Standard & Poors. Imean – you know – it’s extraordinary. We have a billiondollars of debt. That’s a billion dollars of bond holders outthere that are, you know, trusting us with their money. Soit’s extraordinary,. . .” [summer, 2000]

This financial management vision spearheaded the ERPproject. Ivy needed to institute new practices that wouldincrease their control of financial transactions and addressaccountability through official statements of record. Shift-ing accounting practice was also seen to be importantfor managing future operating activities through iterativecycles of planning, budgeting, review, and reporting. Thisled designers of the original ERP to purposefully design-out,the budgeting practice logic of ‘commitment accounting’and design-in what they considered should be the newpractice logic, that would be mandated as the institutionalstandard, of ‘time-phasing’. From the practice perspec-tive, we expect negotiations to ensue because previouslyautonomous practice communities are coupled and nolonger able to use their preferred form of calculation forgrants management. Indeed, this turned out to be a con-tentious issue for the University that resulted in academicsrefusing to work with the financial management module.In this way the Ivy study supports existing accounting lit-erature that found ERP systems to encroach on vital butidiosyncratic local knowledge leading to the creation ofwork-arounds (Chapman and Chua, 2003; Quattrone and

4 The academic constituency included faculty, their support staff (FSS)and academic managers. FSS completed administrative work on behalfof faculty and were their first point of contact. FSS were overseen byacademic managers who were responsible for programmatic and admin-istrative functions within a department or area.

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hift from those that had been pre-defined and configured.n Ciborra’s (2002) terms it began to drift. Long standingegacy assets were bolted-onto the ERP system in ordero create a working information system that was usedy both academic and administrative communities. Theotion that even when doing the ‘same thing’ differences

n practice are inevitable (Nicolini, 2007) foreshadowshe sociomaterial negotiations involved. We identify theost-implementation phase as one of re-figuring the grantccounting practices and as one that was reflective of theay in which the users and technology were constitutively

ntangled. The relationality between different fields-of-ractice at Ivy helps us to understand how a working

nformation system was created that involved socioma-erial accommodations that included the support of someegacy-type practices (commitment accounting) alongsidehe system-supported ‘best practices’ (time-phased bud-eting).

This organizational context sets the stage for investigat-ng people’s everyday activities and analyzing how thesectivities are produced and reproduced in a particular his-orical and social context (Levina and Vaast, 2005). Eachonstruct, along with the negotiation process explainingow new accounting practices emerged, is described inable 2.

.2. Sociomaterial practice: the logics of commitmentccounting and time phased budgeting

Long before the conceptualization of ERP moderniza-ion at Ivy, persons and things were figured together in

particular way in order to manage scientific activitiesunded through grant monies. This sociomaterial config-ration was formally known as commitment accountinghere people and their technologies took on particular

hapes and meaning through situated use. Faculty and theirupport Staff (FSS) were largely responsible for adjustingll discrepancies between what the PI actually spent in

particular budgetary category and what had been bud-eted. This reconciliation process involved handwrittenotes/emails to administrators from faculty about theirpending activities, printed reports from the Mainframenancial system, PI Reports from the Distributed Account-

ng System (DAS), and MS Excel. The DAS was written inocus programming language by faculty and staff in theate 1970s and had a very basic interface allowing userso enter and download data from the mainframe financialhart of accounts, match them with detailed categories thathe faculty decided and then reconcile that balance withhat faculty was committed to spend.

PIs told administrators how much money to set asideor project activities. They referred to these obligationss ‘commitments’. Administrators classified these com-itments into one of two conceptual categories: pending

ctuals and future plans. The former represent expenseshat had been incurred but for reasons of timing, hadot yet ‘hit’ Ivy’s general ledger and were excluded from
hat cycle’s mainframe financial reports; whereas commit-ing for future plans took into account activities that PIsxpected to occur at a later time, but before the completionf the grant. To budget for these categories administrators
ing Research 22 (2011) 181– 197 187

had to probe the PI about their scientific activities to getthem to identify, classify, and earmark as many dollars aspossible from the current instalment of the grant. Whilethese conversations were held with all PIs the granularityand frequency of these discussions was a locally negotiatedoutcome. Individual temperaments, available time, depart-mental norms, professional working relationships, and thestage and nature of research, all influenced the extent towhich future expenses were identified, entered throughthe DAS interface, and classified as commitments that wereexpected to occur during a specific grant period. The ad hocnature of grant accounting makes it evident why a practicetheory lens is so important because it allows us to see howsmall variations in process are inherent to conducting work– even when it is supposedly the same practice, in this casemonitoring grant dollars. The project management processlinks the PI back to the funding body reminding her of whatshe said she would do to achieve her academic goals andwhile each PI has reporting obligations, how she gets to thisstage will vary (Nicolini, 2007).

PIs viewed the pending commitments as money thathad been spent therefore it was expected that the balanceof the grant reflected this. This amount was recorded ina PI report. This PI report was different from the finan-cial statement of record aka “the Greens” which werecolour-coded financial statements reporting only the actualincome and expenses that hit the general ledger in thatfinancial cycle. From time to time, administrators recon-ciled the Green reports against the DAS system and thePI Report to make sure the commitment accounting sys-tem was pulling the correct numbers from the mainframefinancial system. Together these material arrangementsscaffold commitment accounting grant management prac-tices and in turn, the viewpoints of users were influencedin the process of downloading, interpreting, and using thisaccounting data in a reflexive manner. The PIs had “learnedto see” in a particular way that was supported by the socio-material arrangements of commitment accounting. Each PIwas involved in the practice of creating a “close enoughmatch” of actual research activities to the artefact of thefinancial system and its statement of record. Goodwin callsthis process of learning the meta-data of work practicepart of developing a professional vision (within Suchman,2009) – in this instance the vision of being a scientific prin-cipal investigator. The nature of grant accounting, thus,depended on the nest of relations between the people andthings involved in the accounting practice.

For central administrators, this form of reporting wasseen to be indicative of the poor financial planning prac-tices of faculty. This was made no more obvious to themthan when they considered the spending patterns of thePIs who were in the habit of going on sprees as the grantcompletion dates began to close in. The PIs wanted to tryand reach a zero balance to ensure that funding would notbe returned to the funding body. Around the time that Ivyhad decided to replace its legacy systems this practice hadbecome so problematic that central accounting had begun
to ask questions about the large accounting transfers thatwere recorded late in the life of externally funded grants.The central accountants were concerned that auditorswould see inconsistencies (e.g. spending $4000 a month

188 E.L. Wagner et al. / Management Accounting Research 22 (2011) 181– 197

Table 2Key constructs for explaining how new accounting practices emerge.

Theoretical construct Illustration

Sociomaterial Practice – technical agencies are tied together withthose involved in the practice; an ERP sets up a particularsociomaterial configuration.

Many local grant management practices existed that wereaccommodated by the commitment accounting sociomaterialconfiguration but were undermined by the new time-phasedbudgeting configuration.

Reconfiguration – focuses on how persons and things might be figuredtogether differently when resistance is encountered to a newsociomaterial arrangement following ERP implementation.

Eventually the project team responded to the demands of faculty andworked with them to re-configure the ERP to accommodate facultyways of working and set up various support structures.

Relationality – multiple practice communities exist across the field ofaccounting within an organization; different communities will have

During design, the ERP-project team configured the ERP to meet theirneeds. Following implementation this met with faculty resistance;

more or less power to influence the sociomaterial practicessurrounding an ERP configuration/reconfiguration and this canchange over time.

for 10 months and the last 60 days charged $85,000) in thespending process making the transfers suspect in terms ofreflecting actual scientific practice. Next, we consider theproposed integration of management accounting activitiesthrough time-phased budgeting.

As Suchman notes (2009) “professions constitute thosethings that are their objects”. For example, part of becominga scientific scholar and PI on a grant is becoming config-ured with the relevant materials and tools. These toolsextend beyond the tools of laboratory experiments anddata analysis software to include the materials used tomanage the funds supporting the research. The PI’s pro-fessional training enables them to work with imperfectlydesigned tools and make decisions when the output is notexact – this is a form of sociomaterial practice. Similarlythis is true of accountants and budget leaders who mustreconcile incomplete and imperfect data sources in orderto accurately report institutional level scientific activities.From a sociomaterial perspective this ‘imperfect’ configu-ration is part-and-parcel of practice (Nicolini, 2007). It isthe multiple partial information sources (both human andtechnical) that, when brought together, create a workingsystem; indeed, it is the ad hoc nature of the configura-tion that is part of what makes the information systemwork (Suchman, 2009). Next, we consider the proposedintegration of management accounting activities throughtime-phased budgeting.

The time-phased budgeting practice was a standardinformation architecture that was an integral part of theERP system that was implemented. It had been in usewithin the Central Budget Office for over a decade inorder to improve Ivy’s institutional planning and over-all corporate governance activities. The Director of thatoffice spearheaded the time-phased budgeting practiceas the logic for ERP-based grant accounting. The shift ingrant accounting practice tells us a lot about the nature ofaccounting practice being produced at the end of the 20thcentury during a time of societal uncertainty related to Y2Kand large corporate scandals related to financial report-ing. The technical agencies of ERP and the time-phasingalgorithm were to be tied together with the academic con-stituencies.

Time-phased budgeting is based on recording eachfinancial transaction in a chart of accounts category(expense, revenue, capital, etc.) thereby allowing Univer-sity managers to budget for future years by estimating the

faculty were powerful voices within this environment and so wereable to force others to listen to their needs and interests and so effectthe reconfiguration.

sum of each category at the institutional level. The capac-ity for action was quite different from the sociomaterialassemblage of commitment accounting. Time-phased bud-geting begins when faculty and staff meet at the beginningof the fiscal year for an extended financial budgeting ses-sion. This provides the opportunity for all projects to bemapped out in terms of spending over time. There are noprinted financial reports, rather the two individuals sit infront of a computer screen and view all faculty projectsfrom what is called the “project-centric view” of grants.The decision to disallow the printing of monthly statementswas done both to save Ivy money in printing and distribu-tion and mostly to encourage a more fluid interpretation ofnumbers where users reflect on financial numbers as “fixedonly for a short period in time before they change” (Directorof Financial Planning). Instead of providing tools that wouldperpetuate the detailed tracking of financial commitments,faculty and staff were asked to investigate ‘materially sig-nificant’ variances to the budget plan always consideringthe current expenditure in relation to the grant’s timeline.Persistent overspending would be investigated becauseit could impact a grant’s longevity if the pattern contin-ued. Through time-phased budgeting both the faculty/staff(subject) and their grants (object) are transformed in theirrelations with each other (Suchman, 2009). Faculty them-selves were not capable or interested in time-phasing theirgrant monies, but the ERP design-inscribed time-phasedbudgeting as a particular accounting logic set limits aroundwhat processes of grant management would be consideredappropriate for the University.

Under the guidance of their administrator, PIs were sup-posed to mimic the pace and rhythms of their researchprojects by coming up with a budget plan for their mul-tiple grants. This approach was designed to allow themto achieve their academic goals without having to thinkin terms of the detailed financial chart of accounts. In thebeginning, each project is divided into broad categoriesof spending throughout its duration. Then grant funds areapplied to cover the planned activities and categorized bytype of transaction as well as the time when the transac-tion will occur. Faculty and staff then monitor these plansin comparison to the monthly financial transactions. This
regular comparison was designed to encourage reflexiv-ity as part of the financial management process enablingtimely and corrective interventions to be made to the grantbottom line. The time-phased budgeting module generates

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eports at the end of each month comparing how closelyhe PI matched the budget for that period in time therebycaffolding the practice of monitoring grants.

Over the longer term the intention was for the time-hased budgeting to be further decentralized removingdministrative intervention and asking faculty to monitor,eview, and report on their grants themselves. This wasade plain in the following interview:

I mean let’s give the job directly to the faculty. It doesn’ttake a Nobel Prize winner to say I’ve got $50, I spent $65,I’m in trouble for $15. That’s really all we’re talking about.And it doesn’t take a Noble Prize winner to do a busi-ness plan that’s timed out by months or quarters. So youknow, when we talk about somebody who is a secretarywho’s put into a position with the ERP that is now totallytoo complicated for them, that’s really different. I mean ifyou had somebody with an IQ of 90 and it’s a job for aperson with an IQ of 110, there’s a problem. But withthe faculty – the fact of the matter is they’re all smart!I mean they may be nutty as hell but they’re smart andthere’s nothing here that they can’t figure out. . .I reallybelieve – you put pressure on people to take responsibil-ity for things that they should be responsible for and thenyou hold them accountable for it. It’s like the old thing thatsomebody once said, if you treat people like children,they behave like children. If you treat them like adults,they behave like adults. [Director of financial planning,summer 2000]

.3. Reconfiguration

To reinvent the way faculty ‘do accounting’, the projecteam had thus purposely designed the ERP financial man-gement module without incorporating the possibility forommitment accounting calculations. Faculty were invitedo participate in project information sessions but few did,elieving that because the system was being designed forhem it would, by definition, accommodate their needs. Theack of faculty involvement meant that during the config-ration/design stage the choice to exclude commitmentccounting was not contentious. However, once the ERPas rolled-out, the reconfiguration of the sociomaterial

ssemblage to exclude commitment accounting immedi-tely became a source of tension and resistance. It was athis point that an information asymmetry became appar-nt between the PIs and the ERP – between people andachines – where the nest of relationships had been re-

onfigured in a manner that limited the scope of interactionith the grant accounting figures and the capacities foruman action (Suchman, 2007) – in this case forcing facultyo allocate/spend money in a manner preferred by centralccounting leadership. The ERP had not been programmedo emulate the same reports as the legacy assets and itas not sufficiently interactional that it could access the

Is situation to provide useful information.PIs and other academic staff who were the main users

f the system were puzzled when they began to use it,ot understanding why their valued commitment account-

ng logics were absent when the project team had noteen constrained by a standardized information architec-

ing Research 22 (2011) 181– 197 189

ture and benefited from being the first industry-specificsolution:

“Why did the integrated technology have to be time-phased budgeting when we had [a system] before thatworked for the faculty? I mean the legacy [commitmentaccounting] system could have been fully integrated asan ERP – it was technically supported as one, but wasonly ever managed and used at the departmental level.Why not design [commitment accounting] as the inte-grated, standardized technology? It worked for facultyfor years. . .I hope you understand that it’s not [the ERP]itself that’s the issue. It’s the lack of understanding andregard for the people bringing in the money and thepeople doing the work that’s so frustrating.” [Academicmanager, follow-up email 2002]

PIs felt the ERP system had reduced their ability tomanage and control their spending. Furthermore, theaccounting logic that underpinned commitment account-ing was consistent with deeply held values of facultyrelated to academic freedom: it allowed a flexible formof accounting that was capable of adjusting the bottomline to represent commitments in terms of future spend-ing; and also gave them flexibility in terms of spendingwhen projects were nearing completion without anyoneasking questions about this. At a spur of the moment, fac-ulty were known to demand from their support staff thebalance in their account and now this information could notbe retrieved. They also could no longer rely upon the cus-tomized monthly reports that were provided in the legacyenvironment to evaluate their financial position. This putsupport staff under a great amount of pressure since theERP was failing to capture and record accurately changes inresearch activities. Not long after going live with the ERP,tensions between faculty and their support staff becameevident:

“One of my [staff] is quitting. She came out of a meetingsobbing after talking with a new hot-shot faculty mem-ber from the United Nations who said ‘I will get theinformation I need one way or another, you give it to meor I will get consultants in here to get it for me. [ThisERP project] is an excuse that you have been using forfar too long’. She said to me ‘I can’t deal – I shouldn’t haveto deal – I don’t want to take work home like I have been’.These high level project guys know that the staff arehaving a hard time and yet they are not communicat-ing to [Ivy] leadership to get better solutions. Last weeka bunch of [FSS] approached [the Director of FinancialPlanning] and said ‘Tell the faculty that we don’t havethe tools we need to do our jobs. We know we are notequipped, and you know too – why are you not tellingthe faculty?”’ [Academic manager, spring 2000]

As Law and Singleton note (2005), it is as much theabsent relationships that determine the nature of prac-tice. The inability of faculty to engage with commitmentaccounting functionality meant that the capacity for action
was designed to be dramatically different in the ERP envi-ronment. From a relational ontology we would expectresistance because we understand the logics of time-phased budgeting that were inscribed within ERP are still

Account
sensitive to local circumstances and cannot be fully spec-ified (Suchman, 2009). Academic constituencies began toexpress disagreement with the proposed grant manage-ment practice:

“We don’t know of even one research school that isusing this methodology. We’ve done some research asan institution and no university we know of is usingthe [time-phased] method as implemented in the [Ivy]ERP.” [Academic manager, spring 2000]

Their displeasure became evident to the project teamwho began to sense a gulf between central administrativeperceptions and those of faculty and their staff:

“We’re going to get a faculty revolt ‘cause [Ivy leaders]are going to talk about how great the implementationwas from a corporate level and they’re going to talk abouthow great the new tools are from a corporate level andfaculty are going to just be incensed.” [Academic leader,spring 2000]

The above sentiment foreshadows events to come,which are highlighted in the next two quotes:

“. . .you look at the faculty and they say ‘well, what doyou mean [the ERP’s] a success? I don’t have my reports.I have no idea how much my grant account or my grantbalances are’. So there is an enormous disconnect. . .”[Project member, spring 2000]

In the summer of 2000 an academic leader states:

“[Ivy] really missed an opportunity to understand thebusiness that ran teaching and research and patientcare. . .they focused way too much on giving [Central]the information they needed and not worrying aboutgiving faculty the information they needed to managethe business. So we just focused on the wrong things first.”

Rather than acquiesce to the ERP’s design, faculty andtheir staff began to express concern about the ERP-enabledinternal control environment in general, and the time-phased budgeting approach, specifically:

“We tried to say, ‘I don’t really understand why youmade the decision to go with time-phasing but let’s tryto work with it’ and we tried to, but the reality is we stilldon’t have basic business functionality that our facultyrequire.” [Academic manager, winter 1999]

Seeing the difficulties their staff were having in trying towork with the ERP and worried that the new academic yearwould bring with it complications because of this, severalPIs and academic staff approached central administration– the sponsors of the ERP project – with their concerns:

“The Economics professor [who was] the Provost andused to be the VP for Finance and Administration [forIvy]. . .called the [current] Provost really angry becausehe couldn’t read his grant report. The [Financial Con-troller] sat down with him and every concept he was
asking for was on that report. But he couldn’t see it andhis [FSS] couldn’t explain it, so she’s been making himExcel reports. This guy’s smart – he knows what he’sdoing and he can’t even read the report and I thought that
ing Research 22 (2011) 181– 197

was pretty telling. So now faculty aren’t using the ERPand what we have as a result is a very expensive datarepository and still a lot of silos of micro-computing.”[A project manager, summer 1999]

Ivy had configured the practice of grant account-ing for the integrated ERP environment in such a waythat the relationship between the people and things hadcaused information and knowledge to be lost (Suchman,2009). Principal Investigators and their administratorswere unable to constitute the relevant objects in the worldaround them because the practice community of adminis-trators had evolved the technology in a way that enhancedthe sociomaterial relationship for central accountants butdetracted from the relationship between faculty and theirgrant accounts. Very powerful constituencies at Ivy werecontacting the Provost including one of the professionalschools that brought in the majority of all Ivy’s grant dollars.This is illustrated in the following quote from the Directorof Finance at said professional school:

“We struggled for quite a while [with the ERP] but even-tually – in listening to our end users say ‘we have tohave commitments’ and the [project team] saying – ‘oh,they’re just used to the old system eventually they’ll getover it’, it became clear – not only to them – but to us,that no, that isn’t the case, there’s always going to be aneed for being able to do commitments. So what we did,we took that message over to the [project team], and Isaid ‘look guys, departments really need commitments.We have looked at every creative way of using the ERPin either budgeting, reporting, whatever, and it’s becomeclear to us that we need a commitment [accounting] sys-tem’. And I said ‘we’re poised at [our professional school]to create our own commitment system but what I wouldlike is to present this as a University issue and I want toknow whether or not you would like to join us in thiseffort’?” [spring 2000]

These acts of resistance and confusion triggered theProvost to organize a series of lunch meetings with fac-ulty members, their staff, and ERP-project team leaders.These discussions convinced the Provost that commitmentaccounting was a non-negotiable practice for Ivy and wasimportant for managing its institutional risk. She thendemanded that changes be made to the ERP software toreinstate commitment accounting functionality. It was atthis point that the rhetoric of the project team changed:

“We became appeasement oriented and so when peoplebegan hurting us, we said ‘yes’. And so we started build-ing these things that could create commitments andmanage commitments. . .even though it was against ouroriginal ideas about what was the way forward for[Ivy]”. [A project manager, summer 2000]

In an attempt to move the project forward and get thefaculty to work with the ERP, the team agreed that threecourses of action were necessary. First, they would emulate
commitment accounting practices in the ERP environmentby developing software that could ‘bolt-on’ to the exist-ing accounting practices. Second, for the sixty days that itwould take them to customize the software they would

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llow PIs to use the legacy commitment accounting System.hird, they would make organizational changes to supporthe transition to an ERP-enabled environment.

.4. Relationality

Given that grants management practices had histori-ally been relatively autonomous at Ivy and faculty evolvedechnologies in distinct ways to meet their reportingeeds, one solution would have been to decouple therant accounting practices. However, with an integratedRP platform, this independent evolution is unrealistic.nstead, the period of negotiation described above led tonding a sociomaterial assemblage that effectively comin-led practice logics within an integrated infrastructure.o remedy faculty resistance, the project team reorga-ized post-installation development priorities and createdRP-based commitment functionality. The standardizednformation architecture of the ERP was customized toncorporate commensurate reports to the excel based com-

itment accounting reports that were still being preparedt the margins:

“. . .Boom, boom, boom. All of a sudden it just happenedlike overnight. They had a working group that veryquickly went into designing a customized system. . .Weidentified the issue, we got a very small group whoreally knew what they wanted to design, we refined thatdesign. . .and then got the resources targeted to workon it. . .and it’s a done deal within two months time. . ..Iguess that’s a very good example of us starting to listento end user needs – realizing that we needed commit-ments – I mean at first we talked to the faculty and staffand said ‘well what if we create a [time-phased budget-ing] report where we massaged it here and massaged itthere?’ and finally [we] woke up and said ‘you know,as much as we try, it’s really not going to work, we’retrying to go around the issue rather than facing it headon’. We finally did face it.” [Academic manager, spring2000]

The customized ERP application was added to Ivy’snancial management module and was internally mar-eted as a user-friendly solution with a web-basednterface. While the staff found the custom applicationunctionality to be clunky and frustrating as comparedo their commitment accounting system, the web-basednterface was easy to navigate and they were glad to haveommitment data available through the ERP. Ivy’s manage-ent accounting information had drifted back to the pointhere it was imitating what it had been prior to the ERP

mplementation. Staff began to download commitmentata from the ERP, importing the data into excel to repro-uce what looked and felt like commitment accountingaculty reports. These material arrangements supportedeterogeneous management accounting practices whiletill enabling central accounting to download, interpret andse accounting data from within the ERP.

In addition to software modifications, two localdministrative support centres were created by Centraleadership to help solve problems faculty were facingncluding a Business Support Center (BSC), and a Trans-

ing Research 22 (2011) 181– 197 191

action Support Center (TSC). The three BSC staff wererequired to evaluate the validity of departmental trans-actions, eliminate the need to make post-hoc accountingcorrections and were expected to act as a control mech-anism to enable a smooth flow of data into the ERP. TheTSC staff comprised four ERP specialists each with a pri-mary area of concentration but all cross-trained so that theycould cover for one another. Two of the four specialists con-centrate on accounting functionality. One of them acts as aliaison between Ivy’s old chart of accounts and the project-centric chart, speaking with science-based administratorsand clerical workers helping them to make the connec-tion between the legacy and ERP environments. The otherfinancial specialist is concerned with processing account-ing transactions she receives from the departments. Theseentries include grants management and labour distribu-tion transactions that are central to the new time-phasedbudgeting approach. Despite the dismay of Central lead-ership, this administrative support was well-received andused by the departments especially when the account-ing information that was required was for those decisionsthat were infrequently made. Ivy’s wealthier professionalschools such as Medicine chose not to use these administra-tive support centres, but instead designed their own, verysimilar support mechanisms. The Medical School instituteda Business Center where staff are responsible for answeringquestions, understanding and interpreting policies, proce-dures, and then interpreting the project-centric chart ofaccounts.

One central administrator called these administrativeadd-ons, Ivy’s “fully trained temp agency” [summer 2000]designed to assist faculty support staff whose responsibil-ities had increased in the ERP-enabled environment. Anacademic manager involved on the project describes thecreation of the TSC:

“So I recommended that there be some type of a supportcenter for giving departments a crutch. . .We thoughtmodernization – it should be quicker. Well I think thequestion has to be asked, quicker for whom?. . .whatused to be a faculty appointment form became 25screens of entry. . .there was a real need for having thisplace where they could just handle a lot of these trans-actions until we came up to speed. At least that wasmy argument ‘cause I knew [they] weren’t going to gofor something on a permanent basis. So I said, let’s trysix months. . .we quickly went forward and brought the[Center’s manager] on board and then we staffed it andit’s really taken off.” [summer 2000]

In spite of agreeing to such modifications, and imple-menting them quickly, the project team was unsupportiveof the centres. The project team wanted to discourage fur-ther systems from being developed at the margins andavoid complexity at migration time. Second, they wantedthe support centres to be viewed as a temporary part ofIvy’s culture that would be disbanded when the team man-aged to convince faculty of the value of fully migrating to
the standard ERP. Despite the contentious nature of theCentres, their staff were regularly praised by a coalitionof faculty and their support staff and their responsibilitiesincreased. These organizational changes were instrumen-

Account
tal in legitimizing faculty interests because the structuresenabled the more time-consuming process of ERP-basedgrants management to be viable for academic constituen-cies.

Meanwhile, the project team was still trying to con-vince the academic constituencies of the long-term valueof the time-phased budgeting logic, which was a prereq-uisite for acceptance of the standard configuration andthe subsequent creation of their preferred integrated bud-get and planning environment. In an attempt to do this,three central administrative units merged and formedthe Accounting & Budget Department, which integratedthe Controller’s office (including accounting and financeoffices) with the Budget and Planning department. Thisconsolidation was considered long overdue and it washoped that by breaking down silos of central adminis-trative practice, faculty might finally hear a unified voiceespousing the virtues of time-phased budgeting practices.This department issued a procedure for academic staff con-ducting monthly financial reconciliations that was focusedon high-level financial review rather than detailed bookkeeping activities that comprised commitment accounting.During this time many departments did begin to use theERP more regularly:

“So in terms of what’s happened between April andnow? We’ve worked a lot with departments – they’vecleaned up a lot of problems that were persistent forthe first 6 months. . .I think most departments wouldtell you that they pretty much know where they arewith their funds now and they wouldn’t have told youthat at the beginning of April. But they’d probably alsotell you that they wouldn’t like to do a year like thisagain. . .most of them are not interested in complainingfor the sake of complaining, they’re interested in makingthings better.” [Project leader, summer 2000]

The recursive relationship between accounting prac-tices, technologies and human agency exhibited abovedemonstrates a story of re-configuring, or better re-figuring, ERP, which we argue is not the exception tothe rule but rather an accurate reflection of the technol-ogy drifting and inevitable inconsistencies in managementaccounting practice. An ERP may scaffold practice, but driftwill still exist within organizations.

4.5. Epilogue

The customized commitment application combinedwith the ERP’s original configuration eventually allowedthe system to work across departments and faculty wereable to get the information they required to optimize theuse of their grants. There was agreement that the recon-figuration of the system, which enabled it to mirror thelegacy practices, provided a better reflection of the financialposition of the PI’s projects and was seen to contribute toreducing the institutional risk. In 2008, time-phased bud-geting was however still “a non-starter” and the most Ivy
leadership had been able to do was encourage faculty andtheir staff to enter some budget figures into the ERP systemfor all grants – thereby enabling all-funds budgeting at theinstitutional level. Even Ivy’s senior leadership had shifted
ing Research 22 (2011) 181– 197

their opinions of this form of accounting as the followingquote from the Director of Financial Planning suggests:

“We’re still struggling with the commitment vs. pro-jection [time-phased budgeting] approach. . .We havebeen successful. . .in having them pull the automatedcommitments from the system on the last day of themonth, and combine those with actuals and projections.That way they can at least take advantage of the [ERP]system functionality related to budgeting and plan-ning. Many departments are doing this, but I think theyoften manually supplement the information with othercommitments they can’t get automatically and createExcel reports for their faculty. As far as the time-phasedapproach goes, that is pretty much a non-starter here. Idon’t even support it myself.”

Administrators have taken on the responsibility ofdownloading the commitment data for each PI and theyimport this into excel to create custom PI reports. Thisprocess means the financial transactions are recordedin duplicate in two systems: the ERP and their shadowsystems. The expected cost savings of transferring the own-ership of grants management to faculty did not occur.Instead Ivy has incurred additional costs to support thenewly created Centres. Furthermore, since going live theERP has been upgraded on several occasions and whilethis has been a somewhat more costly exercise than wasanticipated in purchasing the system because of the bolt-on nature of the ERP reconfiguration, Ivy budgeted for theadditional expense and time that was necessary:

“The only impact for an upgrade is to do testing of theprocesses. In general I don’t recall any changes intro-duced during an upgrade that created any problemswith these processes. We have to perform impact anal-ysis and testing for all of the major processes in thesystem, so this is just part of that mix.” [Spring 2010]

In 2010 senior management reported that time-phasedbudgeting had been adopted at Ivy:

“Finally, after 10+ years, time-phased budgeting is nowbeing done. We just started [reinstating the approach]when the US financial crisis began and we needed to cutexpenses across the board and more carefully monitorspending. The administration used this financial situ-ation to leverage time-phased budgeting. They arguedthat more careful monitoring of cash flows month-by-month and budgeting monthly was necessary. . .It is notthat faculty are more receptive, it is just that the climateis different. [Spring 2010]

These changes demonstrate the evolution of socioma-terial assemblages including accounting practices. Whilebolt-ons prevent systems from collapsing, they do notthemselves provide ‘complete’ accounts and as such aresubject to constant re-figuring. While it is tempting topresume that migrating to new ERP versions are obviousoccasions for discussing the absence/presence of particu-
lar accounting functions, we see at Ivy the commitmentaccounting legacy assets were reinstated across multipleupgrades legitimizing the bolted-onto ERP with the “oldways of working”. It was the need for the sociomaterial

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ssemblage to respond to changing environmental condi-ions that eventually shifted the sociomaterial assemblageurrounding grant accounting at Ivy, at least temporarily.

. Discussion

Our case first demonstrates, through a longitudinal fieldtudy, the process of implementing so-called “best prac-ice” ERP systems and their influence on managementccounting practices while at the same time illustratingow existing management accounting practices can influ-nce the ERP system. This empirical study when viewedhrough the key construct of sociomaterial practice pro-ides rich insight into existing literature that has reportedn standardized information architectures and inflexibleccounting logics of enterprise software. Our theoreti-al explanation moves beyond the simple attribution ofhange to either human or technical agency (i.e., under-r over-socialized accounts) to produce a more compellingheoretical explanation of the way in which a workingnformation system emerges through negotiations aroundrocesses of use.

Second, we provide a theoretical explanation for whatappens between people and their technology tools whenhe ERP is in production and users are working in the newnvironment. Through the key construct of reconfiguratione were able to focus on how persons and things might

e figured together differently when resistance is encoun-ered to a new sociomaterial arrangement following ERPmplementation. We found that supplementing, and sohanging, the best practice design is a viable and valuableool for creating a working information system and thatndeed sociomaterial assemblages evolve over time, alwaysubject to redefinition.

Third, we contribute to accounting literature by extend-ng knowledge on how software-based accounting tools

ight work effectively within an organization. The con-truct of relationality helped explain why multipleractice communities that exist across the field of account-

ng within an organization will likely be at odds. Theseifferent communities will have more or less power to

nfluence the sociomaterial practices surrounding an ERPonfiguration/reconfiguration and this can change overime. For instance, it was the Economics Professor’s posi-ion of Provost and his prior held position as VP Finance anddministration that enabled him to have some influencever the negotiations regarding the reinstatement of com-itment accounting. In a similar vein, the wealthy status

f professional schools such as Medicine had enabled themo design their own support mechanisms for commitmentccounting. In sum, this study helps develop our under-tanding of the linkages between accounting, informationechnology and integrated administrative systems like ERPhat are widely used in contemporary organizations. Weiscuss each of these issues next.

.1. Sociomaterial practice

Normative accounting literature has treated technologys an ‘absent presence’, neglecting to consider the material-ty that these types of architectures provide in the practice

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of accounting. When materiality is taken into account, aunidirectional relationship is theorized whereby the focushas been to understand the impact of ERP-systems onaccounting through either privileging IT in explaining theform of accounting, or the reverse: emphasizing manage-ment accounting’s impact on IT development/modification.The sociomaterial perspective demonstrates how an ERPcan be enacted in different ways as it connects with prac-tices of different communities of users (Law and Singleton,2005). Nevertheless, this differential enactment has lim-its created by the material configuration. In Ivy, the ‘bestpractice’ was defined by professional accountants from thecentral administration who encoded accounting logics thatsuited their particular interests related to institutional risk.In doing this, the needs of the distributed faculty who hadnot been professionally trained to manage their projectbudgets and moreover, had different interests comparedto the central accountants (i.e., to spend all their budget inthe interests of their research projects vs. to reduce institu-tional risk) were ignored. This led to post-implementationnegotiations, and our analysis shows how an accountingsystem can be made functional as different communitiesresist and accommodate the ‘best practices’ (Pickering,1993) until eventually a reconfigured system is created thatincludes valued functionality that allows different commu-nities to accommodate their needs.

Demonstrating this recursive relationship betweenaccounting practices, technologies and its users contributesto the recent call in the management accounting literaturefor further longitudinal studies of accounting that exam-ine in-depth the bidirectional nature of the relationshipbetween management accounting and ERP technologies(see Rom and Rohde, 2007; Luft and Shields, 2003). Thedetailed Ivy case contributes to our understanding ofhow working accounting information systems are createdaround an ERP. We have shown that accounting is not anobject in its own right but is better seen as a set of practicesthat are scaffolded by material objects (e.g., ERP) that areused by diverse communities to perform different tasks.

Quattrone and Hopper (2006) thus describe ERP as being‘heteromogeneous’ in the sense that they appear to behomogeneous precisely because they are actually hetero-geneous, providing a space whereby users can experimentwith them and create different sociomaterial assemblages.However, given the integrated nature of an ERP, thefreedom to experiment through practice may be more lim-ited than is suggested by this concept. Performability isrestricted by the ‘best practice’ logic that has been initiallyconfigured in the ERP. In Ivy this set the stage for negoti-ations which lead to reconfigurations that accommodateddiverse practices, with these diverse practices and interestsexposed rather than concealed by the ERP. In accommo-dating these diverse interests the ERP was reconfiguredin such a way that the legacy management accountingpractice was reinstated. At face value this seems to rein-force the findings by Granlund and Malmi (2002) that ERPshave little impact on management accounting practice and
answer their question as to whether this minimal impactwas because practice change lags implementation (theylooked only at companies who had very recently intro-duced an ERP) in the negative. However, this obscures the

Account
point that how the management accounting practice wasperformed was changed and, as we show next, exploringhow this change came about sheds light on questions aboutstability and change and human and non-human agency.

5.2. Reconfiguration

Our study challenges the notion of accounting asa largely predictable/routine practice that operates asdesigned across time and locations. Instead we demon-strate accounting as lived and enacted experience wherethe performative nature is foregrounded. However, whilewe need to recognize the performability of an ERP we alsoneed to recognize that its integrated nature depends onachieving some sort of stability and order across diversecommunities of users; in this sense it is different to theimplementation of a balanced scorecard which can stillbe effective even if its use is very divergent across com-munities. A working ERP needs to become stable acrosscommunities and this requires the realization of one setof relations over others for a period of time. Thus, thesociomaterial practice perspective steers us to explore thetechnology–human interactions and how they are influ-enced by ongoing power dynamics and political behavioursto understand how past accounting systems can continueto operate at the margins of ERP implementation until theybecome part of the agreed ongoing practices (Miller, 1998).In a university environment where faculty are powerful,their reconfiguration demands were added to the best-practice design rather quickly. In other situations, whereusers are less powerful, reconfigurations may exist as add-ons at the margin for a considerable time (Ciborra, 2002).

This finding extends the analysis of Dechow andMouritsen (2005) who identify how the configuration of anERP conditions the various actors across an organization touse the ERP in different ways, leading some groups to sup-plement the ERP, others to use the ERP as a lever to alignother functions, and still others to use it as part of a brico-lage of technologies. These kinds of adaptations around andwith the ERP were evident in the Ivy case as well, for exam-ple in the creation of the new transaction centres. The Ivycase also highlights in-use customizations that enabled dif-ferent user groups to have their accounting demands metonce the ERP “went live”. In our case then, it is not that‘the accounting structure is only plastic in the pre-practiceproject mode’ (Dechow and Mouritsen, 2005, p. 729) butthat emergent requirements can be accommodated in pro-duction mode. Reconfiguration through customizing theERP may be more likely in situations where users arepowerful, as in a university, but the effectiveness of thesecustomizations (i.e., reconfigurations) for accommodatingthe different needs of the multiple groups of users, atteststo the potential effectiveness of this strategy more gener-ally. Theoretically, the concept of reconfiguration remindsus that design and use should not be viewed as two inde-pendent states, a point we return to below.

It is also important to note that technologies-in-practice
will be more or less reconfigurable. For example, Quattroneand Hopper (2006) also found considerable reconfigura-tion in their ERP implementation case, and discuss this inrelation to the ABAP code that underpins SAP, the most
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popular ERP software. Having the opportunity for the localbusiness units to customize the ERP in their multi-nationalcase, led to the ERP being used. In their words: “SAP inits standard format. . .had been absent as an IT system butonce managers realized it could be house-trained [throughcustomizing using ABAP] to reproduce locally acceptablecontrols they perceived it as less of a ‘monster”’ (p. 232).However, to program customizations using the ABAP coderequires a high level of knowledge and expertise. In manyimplementations, those involved will not have this knowl-edge and expertise so that such reconfigurations maybe much more restricted (Dechow and Mouritsen, 2005).Moreover, in other cases, it may be a strategic decision to‘go vanilla’ (Robey et al., 2002) so that again in these situa-tions, reconfiguration may be restricted. This reinforces theimportance of seeing an ERP as a sociomaterial assemblage– in a context where the package cannot be configured,either because of lack of expertise or strategic intransigence– the ERP will be a quite different sociomaterial assem-blage as compared to the Ivy case (and the Quattrone andHopper case). In other words, an ERP system will look andfunction quite differently in each context, sometimes theassemblage will enable reconfiguration while in other sit-uations it will not so that other forms of work-around maybe more evident.

5.3. Relationality

Given that IT-based accounting practices have histori-cally been packaged within discrete products that enablepreferred ways of working for a specialized group of pro-fessionals, it is not surprising that the accounting literatureemphasizes the technology as an ‘absent presence’. ERPsystems, however, are different because independent evo-lution becomes more difficult as the multiple sociomaterialassemblages become more interdependent. Our analysis,thus, enables us to provide some insights to the questionposed by Hyvönen et al. (2008) who asked: ‘how ‘ready-to-use’ and ‘packaged’ are these [ERP] software packages?’Our discussion demonstrating why and how reconfigura-tion occurs, leads us to conclude that they are typically notready-to-use and will inevitably change as users interpretand enact the system differently. This directly addressesour two research questions. Thus, our case first shows howthe accounting logics encoded into the ERP system pur-posefully ignored the less professionalized managementaccounting practices of non-accountants and prioritizedthe financial accounting interests of central administra-tors. That this was the case even in a situation where theadopting organization was actually involved in designingthe industry standard suggests that such prioritization islikely to be the norm. However, and in answer to our secondquestion, the upshot of this financial accounting domi-nance during configuration, led to an extensive period ofpraxis, during which time different groups vie over thesociomaterial practice logic that will be adopted. The resultof this contestation is the creation of a reconfigured system
that better accommodates the practice logics of the centraladministrators and the distributed grant managers.
In one sense this analysis concurs with that of Andonet al. (2007) who emphasize how accounting change is

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ot a linear process that involves simple, planned move-ent between two states – the old and the new. However,hile they present their accounting change as occurring

hrough ‘relational drifting’, characterized as experimen-ation that is informed and bounded by existing ties touman and non-human actors, we argue that ‘drift’ is notecessarily a good metaphor to describe the non-linearrocess that occurred at Ivy. The instances of resistancend accommodation described in this paper were muchore purposeful than drift implies, with users taking action

n order to find ways to continue with what they vieweds effective practice. In this sense, there was actually littlexperimentation at Ivy, since faculty and their administra-ors quickly decided that the new method of accounting

time-phased budgeting – did not suit their needs andhen worked to reinstate their old method of commit-

ent accounting. Again, in our case, power dynamics mayxplain the lack of relational drifting. More specifically,he non-participation of faculty in the design of a manage-

ent accounting approach that they would have to use, ledo their reconfiguration demands to reinstate legacy prac-ices post-roll-out and it was hard to ignore these demands,iven faculty power.

This discussion also suggests that separating the usersnd the system designers may be an unhelpful conceptual-zation of management accounting systems development.he case of Ivy demonstrates how users as designers canorkaround the limits inscribed in ERPs in circumstanceshere durability is problematic. This study thus high-

ights the interactivity between the designer/users in theevelopment of accounting based information architec-ures (Chapman and Chua, 2003; Dechow and Mouritsen,005).

. Conclusion

The case of Ivy has a number of important theoreticalnd practical implications for our understanding of howccounting and information architectures are linked. From

theoretical perspective, our research demonstrates thepplicability of the sociomateriality perspective for ERPystems in terms of explaining the links between account-ng and information system development more generally.

The resistance to the ERP system was instigated by indi-iduals responsible for management accounting functions.e argue therefore that the sociomateriality perspective

ffers a suitable lens for exploring the links between man-gement accounting practices and ERP systems becausehe nature of management accounting is such that it muste determined by managers’ local practice needs. Thus, iteeds to be far more flexible than its financial accountingounterparts, which may face fewer problems in terms ofxpressing the parameters of a function by making ref-rence to accounting standards or regulations and thusapable of working using an end-user model. Put anotheray, it may not be as easy to program management

ccounting practices thus many of the design decisions
egarding the logics occur ex ante to the initial time whenhe ERP architecture is designed. It is interesting to seehat this was the case even in the situation where the ERPrchitecture was being designed for the specific university.
ing Research 22 (2011) 181– 197 195

In other cases, where they are adopting a standard pack-age, not trying to design an industry-specific package, thispost-roll-out design modification may be even more likelyin relation to the management accounting functionality.That being said, an important contribution of this studyis to show that such post-roll-out design modification isneither as difficult as Dechow and Mouritsen (2005) indi-cate when they state that the accounting structure is ‘onlyplastic in the pre-practice project mode’ (i.e., before imple-mentation), nor as easy as Quattrone and Hopper (2006)indicate with their concept of ‘heteromogeneous’. Rather,our analysis demonstrates that the scope of post-roll-out modification (the practices which get accommodatedand those which do not) and the type of such modifica-tion (reconfigurations versus supplements) depends not oneither the people involved (as social constructionists wouldemphasize) or features of the technology (as realists wouldemphasize) but rather on the sociomaterial assemblage.Thus, the technology may be customable but if there areno experts to undertake customizations, the package mayas well be non-plastic so that only supplements (adapta-tions around) can be made. And, even if the package iscustomable and experts are on-hand, not all practice com-munities will be able to get the design changes that theyrequest. Only selective accommodations were made at Ivyand these were made where the resistance was comingfrom powerful sources that ‘had to be listened to’. The socialand material actors that make up a particular assemblage,in other words, are not all equal, something that is oftenignored in the literature. Moreover, our findings also indi-cate that the process of accounting change may not alwaysbe best characterized as ‘relational drifting’ as emphasizedby Andon et al. (2007). In a situation where the practicesof a powerful community are ignored in the ERP config-uration, experimentation may actually be rather minimal,and instead the modifications that are introduced may rein-force legacy practices.

Following on from this point, the case study results alsoprovide valuable insights into how legacy accounting sys-tems can continue to operate at the margins when newsystems are introduced and may become central to theworkability of these systems when staff fail to accept them.This is different from other accounting studies, such asHyvönen et al. (2008) which demonstrate instances whereERP systems are initially designed to mirror the prevail-ing practices rather than being seen as an opportunityto develop and implement a more sophisticated form ofaccounting. In Ivy, the ERP was designed specifically to tryand enforce a more sophisticated, or as the VP of Financesaw it, a more ‘professional’ form of accounting. The result,however, was virtually opposite to what was being soughtby the centre, with the backlash from faculty reinstatingand indeed reinforcing their legacy accounting practicesthat were now part of the formal systems. This emphasizesthat it is important to look not simply at what is intendedwhen introducing ERP-type systems but also to examinehow the system is configured and then subsequently recon-
figured and supplemented.
The Ivy case also highlights that even when an ERP isdesigned to mirror prevailing practices (whether imme-diately or through a post-roll-out modification) it is

Account
important to examine how accounting is performed. In Ivy,the routine of preparing commitment accounting informa-tion had changed post-implementation of the ERP systemto involve two support centres in the process. In this sense,our findings go beyond those of Scapens and Jazayeri (2003)and Hyvönen et al. (2008) who conclude that ERP produceslimited changes in the management accounting. At onelevel in Ivy one could conclude that there had been littlechange in the management accounting practice, but thiswould ignore the fact that there were now new ways of per-forming management accounting that were quite differentcompared to the legacy environment.

Focusing on the performance of management account-ing rather than simply the data that is used and produced,also enabled us to see how the extent to which the ERPsystem was able to work effectively was also bound upin the affordability of workaround solutions. Once theERP system was in place and PIs were confronted withthe poor information architectures for providing relevantgrant information their ability to replicate their previouspractices was in part limited by the affordability of thework-around solutions. Those departments with limitedfunding were forced to adopt solutions at a university level,while the more profitable schools benefited by developingsolutions that were sensitive to their local circumstances.Andon et al. (2007) also identified how resource constraintsinfluenced how participants found solutions to dilemmasfollowing the introduction of new accounting practices.However, they did not emphasize how these constraintsmight vary considerably within an organization, leadingpotentially to exaggerated differences between ‘winners’and ‘losers’ in terms of their ability to perform accounting.

The case of Ivy University also has a number of inter-esting implications for our understanding of ‘best practice’and ‘cutting edge’ ERP (see, Chapman and Chua, 2003;Dillard and Yuthas, 2006). What is clear in the Ivy caseis that even though the organization provided the oppor-tunity to develop standardised information architecturesfor the industry, experience with developing packages andknowledge of general accounting conventions prevailed.The legacy assets and practices were ignored. Conse-quently, practices such as commitment accounting werecustomized for Ivy, but were not integrated in the industry-specific solution. This can in part be explained by theabsence of ‘users’ (i.e. PIs) in the design of the industry spe-cific solution. This absence meant that the scaffolding of theERP system created barriers that prevented it from beinguseful to faculty. Furthermore, vendors who want to sell astandard ‘best practice’ product have not acknowledged theevolutionary nature of sociomaterial assemblages includ-ing accounting practices. On one level, this raises questionsabout whether many other institutions find themselveshaving to ‘bolt-on’ applications given their similarity interms of the receipt of grant funding. On another, it raisesquestions about the hidden technology-human costs thatarise because of the need to work around the simplifiedand partial ‘best practice’ methods that are inscribed in
the ERP architectures. Finally, it also raises questions aboutthe extent to which such systems can remove the need forany knowledge of accounting and expect such systems toprovide accurate data for the financial accountants. These
ing Research 22 (2011) 181– 197

are important questions that could be analyzed in futureresearch.

Acknowledgements

We thank Trevor Hopper, Sven Modell and Ted O’Learyfor their helpful comments on drafts of this paper. Addi-tionally we are grateful to the anonymous reviewers of ourmanuscript along with the editor.

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