Enterprises have spent years stacking new tools on top of old ones, hoping more software would translate to more efficiency. Instead, many teams are now operating inside “Frankenstacks”: tangled messes of apps, dashboards and systems that don’t talk to each other and slow everything down.
Companies have long been conditioned to equate complexity with sophistication. But software is becoming a drag on top-line growth and bottom-line efficiency, according to Freshworks’ Cost of Complexity Report, which puts numbers around that pain.
Organizations are losing an average of 7 percent of their annual revenue to tech complexity and wasting 20 percent of their software budgets on tools that are underused, poorly integrated or never fully implemented, according to the study. That adds up to nearly $1 trillion across the U.S. economy.
The survey of 700 IT, CX, finance and operations professionals across six countries found the same recurring problem of too many tools, too little cohesion and a growing drag on employee performance and customer experience.
Tool Overload, Shrinking Productivity
Employees now juggle about 15 apps a day and four communication channels, yet nearly half say they still work in silos. More than an inconvenience, it causes more complexity for CX and IT teams, wasting time and affecting the services they want to deliver.
Among CX teams, 42 percent cited workflows they can’t customize as the biggest headache, with 36 percent saying they are juggling too many tools and 36 percent pointing to routine tasks that drag on longer than they should.
“More tools don’t equal more efficiency, collaboration, or clarity into impact,” Mika Yamamoto, Freshworks’ Chief Customer and Marketing Officer, told CX Today. “For CX teams, fragmented systems force agents to toggle across support channels, tabs and tools just to understand what’s going on. That slows responses and hurts personalization.”
“Customers feel it instantly [in] longer wait times, repeated questions, and a service experience that lacks context and empathy.”
Each new tool adds integration, support, and data overhead for IT teams, who get buried in maintenance and delayed rollouts, which affects their ability to provide employees with the technology they need or respond to their questions in real-time. That results in reactive rather than proactive service, slower delivery and frustrated teams.
Customers Feel It First
Tool sprawl doesn’t remain confined to overloaded teams. Customers feel it whenever an agent pauses during a call to dig up information or switches between screens to find basic context.
“Customers feel the impact the second an agent hesitates or has to dig for answers. When there’s no single source of truth, or when data lives across five different platforms, response times slow, personalization drops, and trust erodes,” Yamamoto said.
“With increasing volumes of disconnected tools that don’t connect, employee and customer experiences fail to deliver on their promise.”
“Employees lose almost a full workday each week, 7 hours, due to context-switching and tool overload. That’s precious time they could spend helping customers,” Yamamoto said. And when customer experience suffers, so do repeat sales.
There is a layered financial impact, as enterprises waste budgets on software because of failed implementations and underused tools, as well as unexpected costs, according to Freshworks’ report. Around 43% percent of respondents said implementations went over budget in the last 12 months and around 53 percent admitted that they haven’t received the ROI they expected from their software. An average of 34 percent cited revenue leakage from software delays and missed business opportunities.
These kinds of inefficiencies make it harder for organizations to put money back into new ideas and invest in what’s working.
Freshworks’ data also illustrates how serious the human impact has become. Beyond lost time and efficiency, the complexity also hurts staff morale, as 60 percent of employees say that they are considering leaving their jobs within the year because they are frustrated by redundant tasks and unclear accountability. Nearly one in five say someone on their team burned out or quit because of a complicated software rollout in the past year.
When employees are bogged down, they can’t show up for each other or their customers, and high turnover erodes the shared knowledge that businesses need to build momentum and grow.
The solution is to simplify the tech stack.
“Unifying and decluttering the foundation is how we reclaim it. When you remove complexity, you make space for delight to take place—because when something is simple, it just works and delight follows,” Yamamoto said.
“So the solution isn’t adding more tools – it’s unifying to simplify. That means arming the team with a view across support conversations, channels, and context, paired with AI that surfaces proactive insights and helps agents resolve issues faster and with less stress.”
“That’s how businesses turn burnout into momentum and restore the human connection at every interaction.”
Breaking the Cycle of Regret Spend
How can buyers make smarter choices in a crowded tech market? By cutting what isn’t working. To navigate the agentic AI wave, enterprises need to determine whether the technology actually solves a real problem and can deliver the outcomes they need.
“Buyers should start by identifying the ‘regret spend,’” Yamamoto said. “Buyers need to uncomplicate wherever possible. They should look to choose platforms that integrate easily, remove clicks, provide summaries that save time and enable proactive support to surprise and delight.”
To get out of the “Frankenstack” spiral, organizations need to rethink rather than expand their software ecosystems.
“CX leaders need to ask: Does this tool reduce friction for employees and customers? If not, it’s noise, and likely adding complexity, not solving it.”
“It starts with simplifying,” Yamamoto added. “Simplicity creates speed – and speed fuels better customer and employee experiences.”
Enterprises can start by taking a hard look at their tech stacks to spot redundancies, consolidate overlapping tools, unify data and redirect the savings toward areas that drive growth.
It’s also worth exploring AI solutions that cut down on repetitive work so that teams can focus on strategy and problem-solving. Building a 360-degree view of customer relationships and establishing a single source of truth for data and analytics helps keep everyone aligned, Yamamoto noted. And finally, reviewing end-to-end workflows to ensures clean handoffs between roles and functions can help reduce friction across the organization.
“Uncomplicating isn’t a technical upgrade, it’s a growth decision.”
“The organizations that seek to solve for these areas elevate the agent experience to improve the customer experience, unify systems to replace tech sprawl with shared visibility across CX and IT, and use AI as a true co-pilot and AI agents to offload repetitive work,” Yamamoto added.
Companies don’t have a shortage of software tools at their disposal, they have an integration problem. The more tangled the tools, the greater the waste. The Freshworks report emphasizes that organizations cannot afford to treat software complexity as a normal cost of doing business. The organizations that streamline their tech stacks will give their teams a clearer path to do their jobs, and happy employees make for happy customers.
