Enterprise software complexity costs UK economy GBP £32 billion
Rising complexity in enterprise software is eroding business growth and costing the UK economy almost GBP £32 billion annually, according to new industry data. The research highlights that organisations are losing nearly GBP £0.9 for every GBP £5 invested in software due to factors such as underused tools, failed implementations, and hidden costs.
Revenue losses
The study reports that nearly 20% of software budgets are wasted each year. Over half (53%) of surveyed companies said they have not realised their anticipated return on investment from business software.
Around a third (34%) identified revenue leakage due to delays and missed opportunities linked to their software solutions, while 43% of business leaders said projects had exceeded budget expectations in the past year.
Another 32% noted that vendor support during software rollouts was not helpful, compounding the cost burden. These issues are not isolated; globally, wasted investments in software are cited as major drags on both efficiency and overall growth potential.
Productivity impact
Complicated processes and disconnected tools have resulted in employees losing almost one full working day each week.
The average professional now juggles 15 different software applications and four distinct communication channels daily. Nearly half (45%) of employees reported that their teams operate in silos, and 37% said their organisations lack a single source of truth, leading to inefficiencies and duplicated efforts.
Challenges are particularly pronounced in customer experience (CX) and IT departments. CX teams reported frustrations around restrictive workflows (42%), constantly switching between tools (36%), and routine tasks taking excessive time (33%). IT professionals cited difficulties with integrating disparate systems (36%), siloed applications (32%), and outdated user interfaces (28%).
"Complexity not only erodes the employee experience, but ultimately the customer experience as well. When people spend their energy managing systems instead of relationships, every customer interaction suffers. Technology should empower people, not overwhelm them."
"When companies unify systems and processes, taking a people-first approach to eliminate complexity, teams can focus on what matters: building relationships that keep customers happy and businesses growing," said Mika Yamamoto, Chief Customer and Marketing Officer, Freshworks.
Talent retention
The frustration caused by convoluted systems extends beyond productivity, impacting morale and turnover.
Sixty percent of employees surveyed expressed some likelihood of leaving their organisation within the next year. Key reasons cited included organisational complexity (38%), complicated internal processes (30%), burnout (30%), and inadequate software (17%).
Almost one in five employees (17%) indicated that a colleague had resigned or suffered burnout as a direct result of a problematic software implementation over the previous twelve months. These trends suggest that institutions may be underestimating the effect of complex software on employee engagement and institutional knowledge retention.
Calls for simplicity
There is a growing consensus within industry circles that reducing complexity should be a central strategic priority. Companies able to simplify their technology environments and focus on usability are seeing improved outcomes in terms of efficiency, job satisfaction, and customer support.
"For years, companies have been conditioned to believe complexity signals sophistication. Our research confirms what I've long believed-the very tools meant to help businesses move faster are now holding them back. Organisations are realizing that complexity is a choice to grow slower than they should and that to compete, they must uncomplicate with urgency. The future belongs to those who remove friction, restore focus, and move faster toward their customers," said Dennis Woodside, CEO, Freshworks.
