Those pics really help. However, If you don't cut the wires then you can use either the key or the keyless system to run the bike. A keyless petrol cap also solves the problem of forgetting your key.
This is a write-up I did last year for some folks. I trust that some folks here may also find it useful.
Keyless Ignition
Instructions for a Fully Keyless Ignition for under $40.00
This mod will allow you to bypass the ignition key completely. The obvious advantage to this is that you no longer have to find some way of getting the key in the hole when you have a screen on the front. Because it bypasses the thin wiring on the ignition harness, it also appears to make starting the bike easier. In addition to this, I have found that having an on/off RF fob hanging on my belt with all the other keys I carry is much easier. It also impresses the bystanders when you turn the bike on or off without touching it.
I take no responsibility for these instructions nor for any results which may arise from using them, either correctly or incorrectly. You do so at your own risk. I have this mod on my RIII Classic and it works well. Your results may vary. It is assumed that you have certain knowledge and skills required to perform mechanical and/or electrical work.
The battery should be disconnected whilst this work is being carried out.
1. Get a remote RF switch of the type used to turn fancy LED decorative lights on & off. Should be about $20.00-$30.00. They are digitally encoded so are probably more secure than your key. An example is this
Link Removed, (scroll down the page a bit) but there are plenty of others around. Most bike shows have at least one person selling them.
2. Get a 30amp relay. Around $8.00
3. The relay can be wired either side of the ignition wiring harness plug which is located under the tank, very close to the front. The ignition wiring harness will probably be coming around the LHS of the steering. I chose to wire it to the bike side of the harness to allow easy removal of the ignition wiring harness if it is ever required. Therefore the wire colours quoted will reflect that.
4. Splice a wire into the White/Blue wire and run it to Pin 30 on the relay. This will carry the power to the new ignition relay switch. You will need a sufficiently heavy gauge wire to carry the current. I used 14 gauge. (You can get little splicing gadgets from stores like AutoZone that clip over the two wires and splice them together just by squeezing. This method is simple and effective.)
5. Connect another wire of the same gauge to pin 87 of the relay and run it back to the wiring harness.
6. Splice that wire to every other wire EXCEPT the orange one. You should then have it spliced to five wires:- Blue/Yelloy; Green; Brown/Blue; Red/Orange; White/green. ( I made up a little cat-o-five-tails to make this easier.)
7. Wire the Remote RF switch to the pins 85 & 86 of the relay as per the instructions which should have come with the RF switch. (Instead of connecting it to a set of LED lights, connect it to the relay.) This will activate the relay.
I mounted the RF Switch and the relay under the LHS panel near the other relays. You do what works best for you. Tidy up the wiring harness with electrical tape and/or cable ties.
The remote keyless switch can now hang on your belt with your other keys. Your regular ignition switch will also independently allow you to turn your bike on, so that it can return the favour.