8/12/2019 ERP LEADS TO AMBIGUITY ABOUT THE CONTROLLER’S FUTURE ROLES

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ERP LEADS TO AMBIGUITY ABOUT THE CONTROLLER’S FUTURE ROLESAn economic-psychological analysis

Pauline Bormann1, Jasper von Grumbkow

2 and Arthur Herst

1,3 

1 Open University School of Management

2 Open University Faculty of Psychology

3

 email: arthur.herst@ou.nl telephone: ..31-455762524

address : Open University, PO Box 2960, 6401 DL Heerlen, The Netherlands

 Paper presented to the Annual Congress Göteborg (Sweden) of the European Accounting Association, Mai 18-

20-2005

ABSTRACT: In this paper we aim to answer the question whether the introduction of Enterprise Resource

Planning (ERP) influences the position and roles of the controller. We also try to find out whether this

introduction will affect the controller psychologically. The formal organization can be seen as a system of

 positions and their associated roles. Roles are expectations associated with a particular position. Even when a

 position is well defined, the expectations that a controller and others can have for this position may vary

considerably. ERP changes the audit structure, that can be seen as an arrangement of people, tasks, and authority

to achieve more calculable and predictable control over organizational performance. In that way, ERP changesrole expectations of the controller and can lead to ambiguity about his/hers tasks after introduction of ERP.

Starting by reviewing the relevant literature we find that most authors expect that ERP will definitely change the

future position and roles of the controller in that (s)he will successively develop from a scorekeeper into a

financial controller, a managerial controller and finally into a business partner. To summarize these 4 roles:

routine jobs, such as processing and reporting transactions will be less important in the future whereas directing

 jobs, particularly making contributions to the determination of the future strategy of the organization are going to

 be more important. Of course this development will drastically change the controller’s position and roles.

However, we did not find empirical information on the psychological effect on the controller of ERP-

introduction. Furthermore, the expected roles, after introduction of ERP, are unclear, uncertain and ambiguous.

This means that there is absence of adequate information required for satisfactory accomplishment of the

controller’s future role with ERP. Unclear directives and policies, uncertainty about authority, duties and

relations with others, and uncertainty as to the effect of behaviors on sanctions and rewards should increase

ambiguity about the controller’s future ERP-roles.In order to gather data on this effect as well as to find out whether the expected developments described in

literature correspond to reality, we sent out questionnaires to controllers employed by several different types of

(medium-sized) organizations. Each of these organizations has introduced ERP in the past. The questionnaires

included various questions on the consequences of this introduction.

Based on our empirical research we come to the conclusion that ERP does not nearly have such a large impact

on the formal position and the job responsibilities of the controller as suggested in literature. In other words,

introducing ERP causes an gradual evolution rather than a revolution. This seems to be in line with the results of

the few comparable research projects conducted in the Netherlands and other countries. As for the influence on

the controller psychologically, we conclude that it is difficult to single out the difference between what

controllers hope for and what they expect. They expect and hope for an upgrading of their role after introduction

of ERP. The scorekeeper thinks to become a financial controller, the financial controller a managerial controller

and finally the last one thinks to be a business partner. ERP can be seen as a vehicle for their upward strivings.

At the same time ERP gives controllers inadequate role- relevant information. ERP role expectations are notclearly defined. The introduction of ERP leads to the simultaneous occurrence of minimal 4 sets of pressures, in

correspondence with the 4 roles, such that compliance with one would make difficult or impossible to comply

with the other. One type of role ambiguity has been identified, i.e uncertainties about time allocation between

future tasks after ERP-introduction.

Paper presented to the Annual Congress Göteborg (Sweden) of the European Accounting Association, 18-20 mei

2005