Impact of Digitalization on Budgeting Functions: An Investigation into Contingency Theory Perspectives

Abstract

The objectives of this article are to examine whether the application of digitalization in enterprise budgeting affects the fulfilment of budgeting functions and their qualitative characteristics, and to investigate whether the realization of budgeting functions brings benefits. The research was conducted from the perspective of contingency theory, both internal and external conditions. The study used an online survey targeting company budgeting staff. Structural Equation Modelling was utilized to validate the structural model (PLS-SEM technique). The conclusions confirm that the application of digitalization, which particularly pertains to ERP, business intelligence systems, and accounting systems with budgeting solutions, positively impacts the fulfilment of budgeting functions and most of their qualitative characteristics, while blockchain makes a minor contribution. Our research suggests that contingency variables, particularly internal ones such as company size, the quality of the organizational structure, and support for competitive strategy, continue to affect budgeting implementation even with the participation of digitalization in budgeting. Budgeting functions and their qualitative aspects are notably correlated with the advantages derived from budgeting, including financial performance, sustainable development and budget task execution.