Media Query Source: Part 51 - CIO (US digital magazine); The cost of digital inefficiency: tens of millions of dollars

• CIO (US digital magazine)
• The cost of digital inefficiency: tens of millions of dollars
• Governance providing guidelines for approved software usage mitigates risk
• However, care should be taken to minimize risks caused by overly rigid governance

My responses ended up being included in an article at CIO (March 10, 2025). Above image from cited article.

The query responses I provided to The Street on February 28, 2025:

CIO: A new study from WalkMe, an SAP company, suggests that large enterprises, on average, lost $104 million in 2024, due to digital inefficiencies. About half of that lost money came from employee productivity losses, due to time spent dealing with technology frustrations and workflow inefficiencies. The study says the average enterprise employee spends 36 workdays a year dealing with technology frustrations.

More than 40% of the losses, meanwhile, are due to tech visibility gaps, related to poor visibility into ghost IT and underuse of approved apps. While the average large enterprise believes its employees use 37 apps on average, WalkMe found employees using an average of 625 apps, including about 170 AI apps.

My question for CIOs, CTOs, and related IT leaders:

[omitted]

-- The report says enterprise employees use more than 600 apps, with the great majority unapproved. Does this number surprise you? Is it a realistic number? If there's so much ghost IT out there, what problems does that cause?

[omitted]

Gfesser: As a longtime consultant and former director at Deloitte, this number doesn't surprise me whatsoever because I've often seen this myself.

I've personally served as enterprise architect for customers, and one type of initiative I've led is "inventory taking" of all software currently being used. As mentioned by the WalkMe report, the 625 app figure likely includes software that didn't get approved via formal channels, and I've seen this a lot with customers regardless of size, although larger figures tend to be associated with larger customers, especially those having decentralized structures where governance is lacking.

It's important to emphasize that the WalkMe report doesn't define "app". In general, I just refer to "software" instead. I mention this because employees also commonly adopt software libraries in their code that aren't typically used standalone, and as such it can be especially challenging to account for these.

The problems that "shadow IT" can pose run the gamut from violating software licenses to security issues. These types of problems can be mitigated when governance is in place that provides guidelines for approved software usage.

All of this said, I've also seen overly rigid governance at some firms, where employees feel that they're not able to get their work done because they're not able to use specific software. In these cases, it's important for employees to feel heard by enterprise architects by their understanding of what software is viewed as being needed, and in some cases, provide alternative options (and possibly training) in cases where functionality overlaps competing software products.

Another related type of initiative I've led is called "rationalization", which I've typically done in M&A (merger and acquisition) scenarios because when a firm is acquired by another firm there is usually some level of overlapping software products, causing redundancy in either firm. And when redundant software is permitted to be used for a long period of time following acquisition, employees inevitably become frustrated when compatibility isn't provided across products. And when licensing is involved, costs end up unnecessarily high. At some point, governance needs to be provided or these problems are likely to exponentially increase over time.