Freshworks’ Cost of Complexity Report 2025 highlights a significant operational issue across global enterprises: companies are losing nearly 20 percent of their software budgets due to unnecessary complexity. Based on a survey of 706 IT, CX, finance and operations professionals, the report estimates that this waste translates to an annual economic loss of approximately ₹14.6 lakh crore for India.
The findings show that system fragmentation, failed implementations and hidden costs have collectively slowed business growth, with organisations losing the equivalent of a full R&D budget every year.
Revenue Loss Driven by Delayed Implementations and Low ROI
More than half of the companies surveyed said they failed to achieve the expected ROI on their software investments. About one-third reported direct revenue loss due to implementation delays or missed business opportunities. Nearly 43 percent exceeded their allocated project budgets, often because vendor support failed to resolve critical issues on time.
These challenges are compounded by the growing number of tools organisations deploy each year, many of which remain underused.
Productivity Drops as Employees Manage Too Many Systems
Employees spend an average of seven hours a week navigating fragmented workflows, non-intuitive tools and scattered communication channels. Workers now rely on around 15 tools and four communication platforms just to complete basic tasks.
Siloed systems, lack of unified data and poor integration were cited as the main barriers to efficiency. CX and IT teams are affected the most, reporting constant friction due to rigid workflows, tool sprawl, integration issues and poor UX.
Employee Morale Declines as Complexity Fuels Burnout
The report also links software complexity to employee burnout. Sixty percent of respondents said they are considering leaving their organisations within a year, citing complicated processes and difficult systems as key reasons.
Seventeen percent reported that a team member either quit or experienced burnout due to a troubled software implementation. Freshworks notes that these ripple effects degrade both employee experience and customer interactions.
Software Simplification Becoming a Competitive Strategy
Freshworks CEO Dennis Woodside said the takeaway is straightforward: complexity is a choice that slows growth. He stressed that organisations must simplify operations to remain competitive. Chief Customer and Marketing Officer Mika Yamamoto added that employee frustration eventually impacts customers, weakening service delivery and enterprise reputation.
The report positions simplification—not more tooling—as the strategy companies need to recover lost productivity, reduce costs and improve morale. Businesses that reduce friction and streamline systems are expected to move faster and deliver stronger customer outcomes.
