Industry Execs Think Digital Transformation Is Working - but Staff Still Rely on Shadow IT to Get the Job Done

New research by Cogna, the AI platform for critical work, reveals that leaders across the construction, logistics, manufacturing and utilities sectors think digital transformation is succeeding – while the actions of employees, who are building their own workarounds to get the job done, shows official systems are still not solving day-to-day challenges.

Although UK industrial companies have invested millions in digital transformation programmes, operational staff estimate that nearly two-fifths (39%) of their working week is spent on repetitive or unnecessarily manual tasks – which they believe could be significantly improved or automated with better tools. Nearly a third (29%) claim at least half of the working week is wasted on manual jobs – a far larger proportion than the 1 in 5 (22%) senior decision makers that feel the same.

In response, two-thirds (65%) of workers have created their own unofficial solutions – including spreadsheets, templates, ad-hoc processes and personal messaging tools – to compensate for shortcomings in company systems. These ‘shadow IT’ workarounds are becoming deeply embedded across organisations, creating security risks and fragmented data.

“Digital transformation does not succeed in the boardroom; it succeeds when it changes the work people do every day,” said Ben Peters, CEO and Founder of Cogna. “The fact that two-thirds of workers are creating their own workarounds shows that teams are not rejecting technology, they are showing leaders exactly where official systems need to go further. The next opportunity is to turn these unofficial fixes into secure, scalable tools that unlock the full value of transformation investments and drive meaningful productivity improvements.”

While workers continue to implement patchwork fixes, senior leaders remain overwhelmingly positive about the impact of technology.

A significant 75% believe productivity at their companies has improved over the past three years, despite macro-economic figures in the UK remaining flat. A substantial 89% attribute these gains to technology, while a further 83% say technology investments have either met or exceeded expectations.

This optimism follows substantial financial outlays. Organisations surveyed have invested an average of £13 million in digital transformation over the past five years, with more than one in five (22%) spending more than £20 million.

Despite this outlay, barriers to productivity remain. According to workers, the biggest sticking points are slow approval processes (20%), poor communication (19%), and outdated systems (17%) – pointing to persistent operational bottlenecks that technology roll-outs have yet to resolve.

“In our experience, the best digital tools are the ones that solve a clear operational problem,” said Martin Rimmer, Chief People Officer at Cadent Gas. “When technology is designed around the way teams actually work, adoption becomes easier and the value is much clearer. That is especially important in physical industries, where small improvements to frontline workflows can have a significant impact on productivity, service and decision-making.”

At the leadership level, senior managers say AI is increasingly being deployed in key areas. In the past 24 months, organisations have introduced AI to support data analytics and forecasting (47%), cybersecurity (47%), customer services (42%), and operations or production (41%).

And despite the many ongoing inefficiencies reported, over a third of workers (34%) admit that AI or automation has already made parts of their job faster or easier. Likewise, one quarter of workers report that AI’s overall impact on their role has been positive – compared to just 6% who say the impact has been negative.

The research also reveals acute pressure on leadership to continue using AI to boost productivity, with 79% of leaders worried that competitors are moving faster in implementing AI-driven solutions. Almost all leaders (95%) say customer and public expectations have influenced their digital agendas. However, more than two in five (41%) of leaders cite cost as the biggest obstacle to further AI adoption.

The full report – Can AI Solve the Productivity Crisis in the UK’s Physical Industries? – is available online here.

The research was conducted by Censuswide, on behalf of Cogna, among a sample of 500 frontline/operational roles (operations team members, coordinators, team leaders, field supervisors), and a sample of 250 UK senior decision-makers (CEO, MD, CTO, Operations Director).

Both audiences were drawn from large enterprises (e.g. 1000+ employees) from the following sectors: Construction/infrastructure; Logistics and distribution; Manufacturing; Utilities (gas, water, electricity). The data was collected between 31.03.2026 – 08.04.2026.

Censuswide is a member of the Market Research Society (MRS) and the British Polling Council (BPC), and a signatory of the Global Data Quality Pledge. We adhere to the MRS Code of Conduct and ESOMAR principles

The full report – Powering the Real Economy: An AI & Productivity Research Programme – can be found on the Cogna website here.

Cogna is the AI platform for critical work, helping organisations solve their most important business challenges with enterprise grade AI agents and applications. Solutions delivered by Cogna are secure, bespoke to the operational requirements of every business and delivered in weeks. The company is a strategic partner to companies like Cadent Gas, United Utilities and Tropicana.