Efficiency at risk: why software sprawl is holding UK productivity back

Recent government research into AI adoption sends a clear signal to UK organisations: productivity gains will not come from technology alone, but from how effectively it is applied and embedded into everyday work. As policymakers place growing emphasis on efficiency and better use of existing resources, many organisations are discovering that their digital environments are still getting in the way.

 

The Department for Science, Innovation and Technology’s latest findings show that just one in six UK businesses currently uses AI, with most having no immediate plans to adopt it. This cautious uptake mirrors a broader issue. Even as organisations continue to invest in digital platforms, employees are often navigating fragmented systems that slow work down rather than speed it up.

 

Freshworks’s Cost of Complexity Report highlights how widespread this challenge has become. UK employees are losing nearly a full working day each week to inefficient systems and processes. Routine tasks frequently require moving between multiple applications and communication channels, creating friction that steadily erodes productivity.

 

Where value leaks out of the organisation

 

Our research shows that almost one in five pounds spent on software is absorbed by tools that are underused or poorly integrated. This goes beyond wasted budget. It introduces operational drag that quietly compounds across teams. Information becomes harder to access, handovers slow and decisions delayed because systems cannot support the pace at which work needs to happen.

 

Employees report juggling an average of 15 different software solutions to complete everyday tasks. Information is scattered across platforms, making simple processes more complex than necessary. These issues tend to build gradually as digital estates expand. Investments are often made with good intentions, but without consolidation and clarity, complexity takes hold.

 

The impact is measurable. Nearly a third of organisations globally report revenue leakage linked to slow or disconnected systems. Technology is meant to accelerate decision-making, yet fragmented environments frequently achieve the opposite.

 

Building a practical foundation for future efficiency

 

The government’s AI research also points to a readiness gap. While more than half of organisations already using AI feel prepared to scale it further, only a third of those planning to adopt AI feel ready to implement it. Skills shortages play a role, but so does the condition of the underlying technology landscape.

 

For many organisations, improving productivity does not start with adding new tools. It starts with simplifying what is already in place: consolidating systems, reducing overlap and improving integration creates an environment where people can work more effectively and where advanced technologies can deliver real value.

 

When teams can move through workflows without unnecessary friction, they operate faster and with greater confidence. Leaders gain clearer insight into operations, making it easier to identify bottlenecks and prioritise improvements. Joined-up systems also support better collaboration across IT, finance, customer operations and other functions.

 

When digital friction affects people

 

The effects of complexity are not limited to operational metrics. They show up clearly in employee experience. Our research highlights a strong connection between difficult-to-use systems and declining morale. When large portions of the working week are spent navigating tools rather than doing meaningful work, frustration and fatigue follow.

 

This has real implications in a labour market where retention remains a concern. For every ten workers globally, six say they are at least somewhat likely to leave their organisation within the next year. Day-to-day experience plays a significant role in that decision.

 

Poorly managed software implementations can intensify the problem. Nearly a fifth of workers said someone on their team had quit or burned out following an implementation failure in the past year. These disruptions undermine continuity, collaboration and trust, with long-term consequences for performance.

 

Using AI to recover lost productivity

 

Looking ahead, AI will play an increasingly important role in helping organisations reduce the drag created by complexity. In streamlined environments, AI can automate routine tasks, intelligently route requests and surface insights that would otherwise be missed. This reduces administrative burden and frees up time for higher-value work.

 

However, the government’s research shows that most businesses have yet to see revenue gains from AI adoption. This reinforces a critical point. AI delivers its greatest benefit when it operates within simple, coherent systems. In fragmented environments, it can only address isolated problems rather than transform productivity at scale.

 

A clearer path to sustainable productivity

 

The UK’s renewed focus on efficiency presents an opportunity for organisations to reassess how well their technology stacks support their people. Software complexity is not an inevitable feature of modern work. It is a challenge that can be addressed through deliberate simplification and thoughtful design.

 

By reducing digital friction, organisations can reclaim lost time, strengthen employee experience and make better use of existing investments. Clearer, more connected technology environments help teams work with pace and confidence, supporting the broader goal of a more productive and resilient UK economy.

 

When people have the clarity and tools they need to perform at their best, organisations are better positioned to meet today’s efficiency pressures and to adopt new AI technologies in ways that deliver lasting value.

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For more information, visit freshworks.com

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Simon Hayward, General Manager and VP of Sales, International, Freshworks