Freshworks report outlines corporate struggles with software solutions

AI continues to evolve and state-of-the-art enterprise solutions are populating corporate America like wild rabbits. While options are boundless, actually creating efficiencies can feel like finding a needle in a tech haystack.

A recent report from SaaS company Freshworks, “The Global Cost of Complexity,” adds much needed context to the conversation. Based on a survey of 700 employees across IT, customer experience, finance, and operations, it outlines the struggles companies are seeing when overwhelmed by software deployment. The report found that:

• Complexity is responsible for 6.8 hours lost weekly per employee and $1 of every $5 spent on total software costs.
• Organizational complexity accounts for 7% of total annual revenue loss for an average business.
• There is a 20% “regret spend” in redundant or underutilized tools.

The report makes for stark reading, especially in an era where AI-powered systems are meant to increase productivity and help businesses work smarter. As the synopsis states, “the result isn’t sophistication—it’s unnecessary complexity.” Finding that elusive ROI continues to be a big problem, with the report finding that only 47% of organizations are hitting their targets.

“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,” said Dennis Woodside, Freshworks CEO.

The problem of overwhelming tech stack complexity is reflected in a recent Morning Brew Insights survey. We asked Revenue Brew newsletter subscribers what issues they face with their company’s current tech stack: too many systems that don’t talk to each other (72%), tools don’t match how people actually work (36%), frequent rollouts and reconfigs slowing down teams (24%), and buying tools without a clear use case or ROI (14%).

Justifying the cost of deployment is an ongoing problem for organizations.

Here’s what you could have won: The Freshworks report shows what the flipside could look like. It highlights McKinsey research that says organizations with high IT productivity deliver up to 35% higher revenue growth and 10% higher profit margins compared to their peers.

It’s the economy: There is something else to think about beyond individual businesses. According to Freshworks, complexity in software solutions is causing are costing the US economy nearly $1 trillion annually.