Back to Overview
Executive Operating Model & Digital Transformation

Why Growing Companies Become Slower With Every New Tool

Growth does not automatically make a company faster. Learn how CEOs can identify tool sprawl, expose coordination costs and use the Fassbender Tool-to-Flow Test to turn fragmented applications into a manageable operating system.

A growing company rarely suffers from too little software. Sales, marketing, finance, service and operations introduce new applications because each is expected to solve a real problem. Every individual decision may be reasonable. Yet the company as a whole becomes slower: information is entered repeatedly, employees keep moving between interfaces, approvals remain pending and nobody owns the complete flow of work.

The economic consequence extends well beyond a larger licence budget. Invisible process costs, conflicting data and operational dependencies increase with every stage of growth. The answer is neither another tool nor a blanket move to one platform. Management must design the end-to-end flow and judge every system by whether it improves that flow.

This article explains how executive teams can recognise tool sprawl, which decisions they need to make and how an accumulated application landscape can become a manageable operating system.

Tool sprawl does not simply mean “too many tools”. It occurs when the coordination burden between applications grows faster than the business value those applications create individually.

The problem begins with reasonable local decisions

Tool sprawl is rarely the result of one obviously poor choice. A team needs faster reporting and buys an analytics solution. Sales adds a prospecting tool. Marketing introduces another automation platform. Operations digitises approvals. Individual employees adopt AI assistants because the official process is too slow.

Each measure initially reduces a local constraint. The side effects emerge between functions. A lead has one status in marketing and another in the CRM. An order is updated in the ERP, but the change does not reach service. An AI assistant receives context from only one part of the process. Executives see different versions of the same metric.

Okta reported that the average number of applications used across its customer base reached 101 in 2025.1 This is not a universal average for every SME. It does, however, indicate how broad modern business application landscapes can become. The decisive question is therefore not whether one piece of software is useful. It is: What does connecting all these applications cost the business every day?

Across more than 20 years working at the intersection of marketing, CRM, performance, transformation and automation, I have seen the same development repeatedly. Companies invest in functions but far less often in the architecture between those functions. As long as the business remains manageable, experienced people compensate for the gaps. As customer numbers, teams and markets grow, that human improvisation becomes the constraint.

Four types of cost remain invisible in conventional budgets

Licence costs are easy to identify. The larger burden often sits outside the software budget. It is distributed across working time, waiting time, errors and management attention.

Switching cost: people become the interface

A study of 20 teams comprising 137 users across three Fortune 500 companies analysed 3,200 working days. Employees switched between applications and websites almost 1,200 times per day on average. The measured reorientation time added up to just under four hours per week or around nine per cent of annual working time.2 3

These figures should not be transferred uncritically to every organisation. The underlying observation is nevertheless important: when people must find, transfer, compare and reinterpret information, they perform the integration work that the system does not provide.

Context cost: the process loses its history

A CRM record may contain the customer status. The ticketing system knows the current issue. The contract sits in a document repository. Price and delivery information comes from the ERP. The relevant decision remains in an email or in one employee’s memory.

None of these systems is necessarily poor. The process is still weak if context must be reconstructed at every handover. Microsoft’s 2023 Work Trend Index found that 62 per cent of respondents struggled with too much time spent searching for information. Across the Microsoft 365 work patterns analysed, employees spent an average of 57 per cent of their time communicating and 43 per cent creating.4

This is not an argument against communication. It is evidence that search and coordination have themselves become a production system, often without a named owner.

Data cost: more systems create more versions of reality

Every additional application introduces fields, definitions, duplicates and synchronisation rules. Which source owns the customer number? Where is the current revenue stage maintained? Which date is binding for the delivery commitment? May the new AI tool access the same information as the sales representative?

When these questions remain unresolved, technical effort is not the only cost. Management begins to distrust its metrics. Decisions are delayed or protected by manual one-off analyses. A data problem becomes a leadership problem.

Accountability cost: everyone owns a tool, nobody owns the flow

Marketing owns the automation platform, sales owns the CRM, finance owns the ERP and IT owns access. But who owns the complete journey from customer enquiry through quotation, order and delivery to the next commercial opportunity?

The NIST Cybersecurity Framework 2.0 places GOVERN and IDENTIFY at the beginning. Organisations are expected to establish roles, responsibilities and authorities and to understand assets including data, software, systems, services and suppliers.7 This is more than a security requirement. It is a prerequisite for operational control.

Why one platform does not automatically solve the problem

The instinctive response to tool sprawl is consolidation. That can be the right decision, but it is not a strategy in itself. Replacing specialist applications with one broad suite may reduce licence and integration effort. It can also produce weaker functional capabilities, new workarounds and greater dependency on one supplier.

A best-of-breed approach can work equally well when specialised applications provide a meaningful advantage and are properly integrated into the business process. The choice between a suite and a specialist tool should not be ideological. It depends on process criticality, differentiation, integration capability, data ownership, risk and switching cost.

The U.S. General Services Administration therefore does not describe application rationalisation as a universal, one-size-fits-all method. Applications should be evaluated in the context of business, technology, security, value, fit and cost, with participation from both senior leadership and real users.8

An executive team should not ask, “How many tools are too many?” The better question is, “Which combination creates the lowest coordination burden for the business outcome we need?”

The Fassbender Tool-to-Flow Test

Before a new system is purchased, an existing application is renewed or an internal solution is built, management should examine six areas. The Tool-to-Flow Test shifts the decision away from feature lists and towards the end-to-end outcome.

Test areaManagement questionWarning sign
OutcomeWhich measurable business result will the tool improve?Value is described only as functionality or theoretical time saved.
OwnershipWho owns value, data, cost and ongoing operation?Procurement, the business function and IT point at one another.
FlowWhich handovers disappear and which new ones are introduced?One local step becomes faster while the overall process becomes more complex.
ContextWill customer, case and decision context survive each handover?Employees reconstruct context from several sources.
ControlAre identities, access, risk, portability and exit defined?The contract is clearer than the route out of it.
EvidenceWhich baseline and metric will demonstrate value?Success is defined by usage rather than business impact.

The test is deliberately more demanding than a conventional feature comparison. An application can be functionally impressive and still weaken the overall system. Conversely, an unremarkable tool can be highly valuable when it simplifies a critical process, preserves context and establishes accountability.

My decision rule is straightforward:

A tool should be scaled only when it improves the end-to-end flow and reduces the total cost of coordination.

Four decisions instead of a blanket clean-up

Once the assessment is complete, every relevant system needs a clear portfolio decision. “We will look at it later” is not a fifth category.

DecisionWhen it makes senseWhat must happen next
KeepThe tool creates clear value and fits the target process.Define the owner, cost, controls and performance measures.
IntegrateThe specialist capability is strong, but handovers and context are broken.Design data flows, identities, events and error handling.
ReplaceThe functionality or architecture no longer meets the target requirement.Plan migration, data quality, user transition and fallback.
RetireValue is redundant, limited or no longer demonstrable.Archive data, close access, terminate contracts and remove dependencies.

This decision cannot be made solely by IT or procurement. Finance sees cost, IT sees technical risk, the business function sees capability and users experience daily friction. Only a combined view produces a credible answer.

AI can resolve tool sprawl or accelerate it dramatically

AI lowers the threshold for introducing new capabilities. Teams can buy or create assistants, automations and small applications more quickly. That is positive in principle. Without architecture, the same speed creates a new generation of shadow processes: several assistants with different knowledge, unclear data access, parallel automations and decisions whose origin nobody can trace.

McKinsey reported in 2025 that, among 25 organisational attributes studied, fundamentally redesigning workflows had the strongest relationship with reported EBIT impact from generative AI. Yet only 21 per cent of organisations using generative AI had fundamentally redesigned at least some workflows.5

McKinsey’s 2026 survey reinforces the pattern. Nearly three quarters of the defined AI high performers reported fundamentally redesigning workflows, compared with around one quarter of other respondents. High performers were also more likely to combine deployment with senior leadership commitment, impact measurement and operational discipline.6

The conclusion is not that every company should deploy more AI. It is that AI creates reliable enterprise value only when the flow of work is redesigned. When AI is simply placed on top of a fragmented application landscape, it often automates handovers without removing their underlying cause.

An AI Operating System is not a new super-platform in this context. It is the connecting operating logic: Which processes matter? Which data is authoritative? Which identity may act? Where must a human decide? How is impact measured? Who remains accountable?

A realistic 90-day route from tool portfolio to flow of work

An entire system landscape cannot be replaced in three months. In 90 days, however, a company can establish transparency, make a defensible portfolio decision and improve one critical process visibly.

PeriodFocusConcrete outcome
Days 1–30Understand the portfolio and the reality of workApplication inventory, owners, cost, data access and a visualised end-to-end process with a baseline
Days 31–60Decide the portfolio and target processKeep/Integrate/Replace/Retire decision, target architecture, accountability and prioritised friction points
Days 61–90Improve one critical flowIntegrated pilot, fewer handovers, defined controls, user feedback and defensible impact measurement

Days 1–30: do not start with the licence list

A licence list shows what has been purchased. It does not show how work gets done. The analysis should therefore begin with one business-critical process, such as lead-to-order, order-to-cash, service-to-resolution or campaign-to-revenue.

For every process step, document the system, data source, handover, waiting time, exception, accountable role and manual rework. In parallel, create a reliable inventory of applications, access, contracts and cost. This reveals which systems create value and which merely shift coordination work onto people.

Days 31–60: decide the trade-offs

Management must now set priorities. Standardisation reduces complexity but can constrain local flexibility. Specialisation can create differentiation but increases integration and governance effort. Rapid internal development can resolve a constraint but introduces a new operating responsibility.

These trade-offs do not belong in a technical sub-project. They affect speed, risk, capital allocation and scalability. Every decision therefore needs an executive sponsor and an end-to-end process owner.

Days 61–90: prove the flow, not the portfolio

The first implementation result should not be “five tools switched off”. What matters is whether a relevant flow of work performs better. Handoffs may be reduced, data captured only once, status changes propagated automatically and decisions prepared with complete context.

The change should scale only when quality, speed, user adoption and operational control all meet the agreed threshold. Visible licence savings are welcome. They are not the only and often not the most important, source of value.

The right scorecard measures the complete process

Active-user counts and login figures measure adoption, not business impact. An executive scorecard should connect five levels.

LevelExample measure
FlowCycle time, waiting time and number of handovers
QualityRework, error rate and first-time-right performance
ContextCompleteness of relevant data and decisions at the next process step
CostLicence, integration, support, control and human coordination cost
ControlNamed owners, reviewed access, documented exceptions and a workable exit

This measurement logic prevents two poor decisions: retaining a popular tool despite weak business impact or removing an invisible infrastructure component even though it stabilises a critical process.

Four questions CEOs frequently ask

At what number of tools does a company have a tool-sprawl problem?

There is no credible universal threshold. Ten poorly connected applications can be more damaging than one hundred well-governed systems. Coordination burden, context loss, cost, risk and the effect on the end-to-end process matter more than the count.

Should the company consolidate as many applications as possible?

No. Consolidation is one possible measure, not an objective in itself. Specialist tools remain valuable when their business contribution justifies the additional integration and operating effort. The decision must be made for each process and capability.

Is tool sprawl an IT problem?

Only partly. IT can manage inventory, integration, security and architecture. Business value, process design, priorities and accountability are management responsibilities. Without an executive sponsor, rationalisation quickly becomes a technical project with little operational effect.

Where should a growing SME begin?

Do not begin with the entire portfolio. Select one business-critical process with visible friction, document how work actually moves and establish the baseline. This produces portfolio decisions based on business evidence rather than opinion.

Conclusion: the objective is not less software, but less friction

A growing company needs capable tools. It needs a shared operating logic even more. Without that logic, every new application increases the number of handovers, data versions, access paths and accountability gaps.

The wrong response is a reflexive purchasing freeze. It is equally wrong to assume that one suite will remove every organisational problem. The right response begins with an end-to-end process, a transparent baseline and a clear decision for each relevant system: keep, integrate, replace or retire.

That is where a resilient AI Operating System begins, not with the next feature, but with the question of how strategy, processes, data, people, governance and technology combine to create a better business outcome.

If your company is growing but its operational speed is not, the first conversation should not be about another tool. It should identify where your system is currently producing coordination instead of value. An AI Readiness Assessment or a focused Operating System diagnosis creates the evidence required for that decision.

References

Related Insights

Strategic Advisory

From insight to a decision you can stand behind.

We translate AI potential into clear architecture, measurable priorities and an executable roadmap for your organization.