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Software is a major element of many business processes. It is also an essential component of products and services. It is often the basis of business models and can be seen as a differentiator between companies. It is a key driver of innovation and productivity and is an integral part of the digital transformation process across all industries. Software is now a major topic in business administration and computer classes, even among non-technical students.

In the 1980s computer programs revolutionized world of business. Word processing software such as Microsoft Word and Word Perfect that quickly replaced IBM’s typewriters, was among of the most famous examples. Also, spreadsheets such as Lotus 1-2-3 or Excel became popular. In the 1990s, globalization led to additional changes as companies began to utilize SAP software to coordinate supply chain vendors. These applications were used in logistics and manufacturing to streamline operations.

For businesses that are installing new software, the question of how to appraise these intangible assets is a critical aspect to consider. It could be used to determine the purchase price or to finance the purchase or to figure out how to maximize the flow of value throughout the life of the product, the software valuation process is often a complex. The IT team and managers of business units must therefore concentrate on maximizing the value of software investment. They should be encouraged and empowered by the upper management to make informed choices which will positively impact the flow of value in their organization.