IT frustration costs companies more than $100 million a year — with shadow IT the only user solution

The average large enterprise lost $104 million to digital inefficiencies in 2024, driven by productivity losses connected to employee IT frustrations and hundreds of ghost apps flying under the radar, according to a new study.

At issue is the complexity and number of applications employees must learn, and switch between, to get their work done. As a result of this quagmire, employees at large enterprises lost an average of 36 workdays to IT roadblocks, according to the study from WalkMe, a digital adoption platform vendor.

Meanwhile, many enterprise employees turn to unauthorized apps and software to do their jobs, the study says. While the average large enterprise believes it uses 37 apps, employees actually use 625 apps, including more than 170 AI apps, according to data collected by WalkMe. This shift to shadow IT leads to several problems, including the underuse of enterprise apps.

In many cases, enterprises have little visibility into the apps employees are downloading, especially after many employees began working from home in recent years, says Uzi Dvir, WalkMe’s CIO.

“It becomes so easy to register to a new app, definitely when you’re working remote,” he says. “With all what’s happened in the last decade, it comes to hundreds of applications.”

In many cases, employees download new apps because approved software is difficult to use or doesn’t have the capabilities they need to get their work done, he says. Changes in apps or workflows can also prompt employees to look for work-arounds, including AI tools that may help them navigate the new processes.

When enterprises introduce new apps or process, the reaction can be, “Oh my God — now I need to start all over again with the new process,” Dvir says. “They will find a way how to overcome what’s really needed.”

Desperately seeking work-arounds

WalkMe has an interest in the study’s results — its digital adoption platform is designed to reduce digital inefficiencies — but several IT leaders say the study’s projections of 36 employee days of work lost to IT frustrations and close to 600 unauthorized apps being used in a large enterprise seem realistic.

Erik Gfesser, an IT consultant and former director at Deloitte, says he’s seen enterprises running hundreds of unauthorized apps and software libraries when he engages with them.

Shadow IT can create several problems, he says, including software license violations and security holes. He recommends organizations put governance in place to provide guidelines for approved software use.

Some organizations are too strict, however, Gfesser adds. “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,” he says. “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.”

IT leaders should consider alternative options and user training in cases where functionality overlaps in competing software products within the organization, he advises.

When looking at mobile apps, enterprise mobility and IoT solutions provider SOTI has found similar problems as the WalkMe study. According to a 2023 SOTI study, 90% of enterprises don’t have full visibility into their device endpoints, and another white paper finds that even one bad mobile app or dropped connection per shift could result in 100 minutes of lost productivity per worker.

Thirty-six lost days of worker productivity a year may be conservative, says Shash Anand, senior vice president of product strategy at SOTI.

“Employees struggling with slow, outdated, or underperforming IT systems naturally seek out work-arounds — often turning to unapproved apps or personal devices just to get their jobs done,” Anand adds. “But this creates even more problems — security risks, data silos, and a lack of standardization that makes IT support a nightmare.”

Enterprises making progress

Other IT leaders were less convinced of WalkMe’s numbers. Hundreds of unauthorized apps would not have been surprising a decade ago, but since then, CIOs have become more strategically engaged with business leaders in their organizations, says Bill Hineline, field CTO at Chronosphere, provider of a cloud observability platform.

But the use of unauthorized apps remains a problem for many organizations, he adds. “Ghost IT, frustration with IT systems, and unauthorized apps are generally tightly interconnected in my experience,” he says. “You start with user frustration that stems from either support problems, reliability issues, or functionality gaps unaddressed by the technology organization.”

When these issues exist, business teams often source their own IT solutions, Hineline says. “It rarely ends well for either the business team, the ghost IT team, or the central technology organization,” he adds.

While ghost or shadow IT exists, the number of authorized apps in an enterprise is likely closer to 60 than 600, adds Ed Frederici, CTO of enterprise collaborations solutions provider Appfire.

Whether ghost IT is a serious problem is a nuanced issue, he adds. Ghost IT often serves as an outlet for employee frustration when business operations don’t move as quickly as they want, and in that case, it’s “responsible ghost IT,” he adds.

“Ghost IT allows employees to move quickly, innovate, and increase their productivity,” he says. “These are clearly good things. However, it becomes a problem when it’s done without guardrails around security, compliance, cost, and overall awareness.”

Organizations should give employees simple, actionable, and easy-to-navigate guidelines and allow them to experiment with some ghost IT, Frederici says.

“Employees use ghost IT to fill a functional or feature gap in the toolset they have,” he says. “When a critical piece of functionality is missing and they need it, they create it. That’s not a problem. The problem begins with ungoverned ghost IT.”