Software has become the primary element of many business processes and is a crucial component of services and products. It is often the foundation of business models and can be considered a distinct factor between companies. It is a key factor in innovation and productivity and is an essential component of the digital transformation process across all industries. This is the reason why software has also become a core subject in IT and business classes even for non-technical learners.
In the 1980s computer programs revolutionized business. One of the most famous examples was word processing software such as Word Perfect and Microsoft Word that quickly replaced IBM typewriters. Also, spreadsheets like Lotus 1-2-3 or Excel became popular. The 1990s saw more changes as globalization accelerated and companies changed to SAP software that coordinated supply chain vendors. These applications were used in logistics and manufacturing to streamline operations.
Companies that are implementing software must consider how to value this intangible asset. It could be used to determine the purchase price, or for financing purposes or to figure out how to best impact the flow of value throughout the lifetime of the product the process of valuing software can be complicated. The IT team as well as the managers of business units need to concentrate on maximizing their software investments. The upper management should empower and motivate them to make educated decisions which will positively impact the flow value in their organization.