Forty-four percent of businesses in North America and Europe plan to invest more in their IT budgets in 2020 according to a recent Spiceworks report.
Investing in technology requires proper strategy and leadership to positively impact the organization. There are often complex decisions, such as choosing a CMS or hiring technical staff, that business executives will need to make. At what point, therefore, is a technology leader beneficial to a growing company?
With these thoughts in mind, we’ve turned to business leaders — and CTOs themselves — to learn what value CTOs bring to the table, when organizations need them and what the alternatives are.
What Do CTOs Do?
Michael A. Davis, entrepreneur and former CTO of CounterTack believes the role a CTO plays depends on the size of the organization. For a startup, the CTO mostly brings cohesiveness between IT and the customer. At mid- to large-size companies, however, Davis said “the CTO is mostly the visionary and customer-facing evangelist and this value is seen in terms of revenue.”
The CTO isn’t just interacting with the customer, however, but also leading technological indicative and minimizing risk. Dominic Holt, CTO of Richardson, Texas-based Valerian Technology said, “CTOs often also identify risk areas for the organization and develop plans to remediate those risks and execute them.” That’s why CTOs and other technology leaders are often a critical part of remaining competitive in the digital age.
Casey Bankord, managing director at Chicago-based Clareo believes it’s not just about investing in technology but crafting competitive strategies for exploiting it. “The best CTOs implement a vision, strategy, process and measurable goals,” he explained, “that appeal to business leaders in order to jumpstart transformation.” This goes far beyond the latest trending app or software to establishing a solid foundation for leveraging digital technology.
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When Are CTOs Critical?
Most smaller companies have IT staff that support and troubleshoot everyday issues for employees. “Company growth often drives the need for technical staff to be in operations, marketing, sales, engineering and strategy meetings,” Bankord said. That’s because, at that point, technology has moved from a support function to a strategic function. “If you find yourself inviting technology specialists to more meetings than typical,” he continued, “it is time for a CTO.”
“It depends on how much technology drives your business and how large your business is,” stated Thomas Stiehm, CTO of Fairfax, Va.-based Coveros. Some companies may not use technology enough to warrant a full-time CTO, although this is increasingly rare nowadays. For others, it would have been beneficial to already hire a CTO. “It depends on the organization,” Stiehm added.
Holt believes it’s also a good idea to hire a CTO if you’re planning to invest in software or technical talent in the near future. “If you're evaluating a new technology or migrating/modernizing your technology stack,” he explained, or your organization needs “help finding/vetting technical and engineering talent.” These require the leadership that only an experienced CTO can provide, but that doesn’t mean organizations need to immediately hire a full-time CTO.
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What Are The Alternatives?
For companies too small or not ready for a full-time CTO, one alternative is hiring a fractional CTO. “A fractional CTO is a consultant who will work with you on a part-time or intermittent basis to help craft your technology plans that bridge your technical operations and business,” explained Stiehm. They can help monitor progress and coach your team from the sidelines without breaking the bank. In short, they resolve some of the responsibilities of a full-time CTO until your organization is ready to hire one.
Fractional CTOs can also be a stepping stone as well. “It's often a best practice to bring on a fractional CTO before you hire a full-time CTO,” suggested Holt, “as this is a critical hire for your organization and hiring the wrong candidate could have drastically negative effects on your organization.” The fractional CTO can get the technology department in order, help you hire a good candidate, and become a trusted advisor. “Sometimes, if there is a good mutual fit,” Holt continued, “organizations even hire fractional CTOs to fill their full time roles.”
In the end, most organizations need someone who can bridge the gap between the technology and business worlds, whether that’s a part-time or full-time CTO. “They need to pave the path,” concluded Stiehm, “and help both technology and business come together to make it real.”