Does your IT organization eagerly embrace digital transformation, or quiver in fear at the prospect of it?\nIf the former, you\u2019re following the model of world-class IT organizations that run more efficiently and devote a larger portion of their process costs to new business-focused initiatives. That\u2019s the takeaway from a study by Hackett Group, as reported in an issue of Computer Weekly.\n\u201cIT is constrained by sunk investments and legacy technology and skillsets, while it must also embrace the digital world of cloud, big data analytics, social media, the internet of things (IoT), and mobility,\u201d the report states.\nHackett Group, a business advisory and transformation services consulting firm, found that while some IT organizations are overwhelmed, others are energized by the challenge and opportunity to operate at a more strategic level.\nThose world-class IT organizations, according to Hackett, spend 21% less per user than typical companies and rely on 8% fewer staff. That\u2019s a big difference when you\u2019re looking to free up resources for investment in digital transformation.\n\u201cHackett Group found that the top IT departments spent just 53% of their budgets on running IT, compared with 60% in typical companies,\u201d Computer Weekly reported. \u201cA larger percentage of process costs were committed to new business-focused initiatives (43% versus 32%).\u201d\nAccording to the report, \u201cmany IT departments have significant resources tied up in supporting \u2018run-the-business\u2019 activities, which detracts from their ability to support the higher value activities that drive business results.\u201d\nThe publication interviewed Scott Holland, practice leader of the IT executive advisory program at Hackett Group, who urged IT to be \u201cruthless\u201d in addressing applications that inhibit innovation.\n\u201cSuccessful companies look at their application portfolio and develop technology roadmaps,\u201d Holland told the publication. \u201cYou have to learn to live with core investments.\u201d\nIt\u2019s rare that CIOs will recommend retiring those high-functioning \u201csystem of record\u201d applications that are still providing business value and supporting mission-critical operations. But that doesn\u2019t mean that you can\u2019t run them more cost-effectively.\nSoftware vendors naturally want to squeeze every dollar of possible revenue out of their customers. But there\u2019s an inverse formula at work there: as the business value of the application declines, the relative cost of supporting it increases, due to forced upgrades, customizations, and often less-than-satisfactory support. The result is unhappy customers, as revealed in an illuminating Nucleus Research survey reported in InformationWeek.\nEnterprises can free up costs to fund transformation efforts, though, by uprooting traditional vendor support models and creating a new model based on third-party support services.