Where to start?
The first step is to define how much revenue the business systems are consuming. Revenue that could be used elsewhere in the business, for example employing staff on income generation that makes profit.
Organisations in the U.K usually buy their own software applications. These are then loaded onto their own systems where it is configured and cared for by them or a contracted provider.
Adding all these software, equipment, support and people costs together, divided by the number of business transactions supported, then starts to give an indication of the overhead.
This figure will also include waste. Research has demonstrated that 75% of systems capability is never used though it is paid for.
The next value to understand is the cost to the business of having a system that does not meet all requirements. This can be derived from the work backlog, poor performance here has an impact on lost revenue or limits cost reductions.
To complete the picture, account could be taken of unrealised expectations, needs where management resist asking for change as it is unlikely to get done.
With a picture of costs that can be attributed to business processes then value can be calculated.
It is not hard to understand but we know many businesses are often too close to approach it objectively, this is where we come in.