Does your company need a full-time Chief Technology Officer (CTO)? Technology continues to play an increasingly significant role in businesses of all sizes. That means that even small to medium-sized enterprises are adding or considering adding either a full-time or part-time CTO position. Still, is this the right move for your business?
Does your organization need the skills and experience a qualified CTO would bring to the table? What should you be looking for if you decide to fill that role? Can your organization afford a CTO? Finally, what alternatives are available should you decide you are not ready to hire for the position but still need help in that area?
What is a CTO, and What Role Will They Play in Your Organization?
The decision of whether or not to hire a CTO is often complicated by a clear definition of the position and what value it can add to an organization. Too often, small businesses look into filling the role because someone advised them to do so with no compelling reason.
However, the CTO plays a critical role in modern businesses. As a business grows and its dependence on ever-changing technology increases, the need for a CTO will become more apparent. The real question for most companies is when they will need a CTO and whether that role is full-time, part-time, or even outsourced.
One way to look at the role of a CTO is a bridge between business and technology. It is their role to understand the mission and vision of the organization and manage the technology to gain the most value and reach its objectives.
The exact functions of a CTO depend on the specific organization, its primary business, and its current use of technology to do business. Specific roles relate to technology vision and strategy, architecture, infrastructure, software development, and innovation.
CTOs need to keep their head in two worlds, the business’s goals and processes and the latest technological solutions to reach those goals and make processes more efficient and cost-effective. To do this, they need both extensive business knowledge as well as a broad understanding of technology trends and possibilities.
What Should You Look for in a CTO?
If you think you are ready for a CTO, there are several skills and qualities you need to look for. Again, every organization is different. If you do opt to hire a CTO, you will need to consider the specific traits of your business, including size, technology use, and culture. However, in general, you will be looking for someone with, at minimum, a degree in computer science, engineering, or a related field.
To ensure this person can handle both the business and technology size, an MBA or other relevant business education is a plus. If you can find candidates with experience as a CTO or in a similar business and technology role, you may have a chance to land someone who already understands the position. You will want to ensure that candidates understand budgets, business planning, technology analysis and have a strong background in developing technology trends.
In addition, a well-rounded candidate will have excellent leadership, organization, communication, strategic thinking, and problem-solving skills.
Can You Afford a CTO?
For small to medium-sized businesses, the question of whether or not to hire a full-time CTO may come down to cost. According to Glassdoor, the average base pay for a CTO ranges from $161,650 for small businesses (under 50 employees) to $180,050 for a mid-sized organization (under 500 employees). For small businesses, startups, and rapidly growing organizations, this may be either not possible or impractical at this moment. However, there are some ways to gain many of the benefits of a CTO without bringing someone on full-time.
If your small to medium business either can’t afford a full-time CTO or is just not ready for another full-time executive, there are several other options available that may fill the need, at least temporarily. For example, some businesses, especially young startups, are experimenting with “fractional” CTOs. With this arrangement, you get part-time access to the skills and knowledge of an experienced CTO or a reduced cost. Some are even willing to work for a mix of salary and equity. For some companies, this works as an essential bridge until the need for full-time becomes more apparent and more funding becomes available.
Another alternative is to explore the growing business of “CTO as a service” (CaaS). Like other “as a service” options, CaaS outsources the role to a third-party firm. While there are certainly advantages to having someone in-house, CaaS can give smaller and growing businesses access to a far higher level of skill and experience than they could afford through hiring. CaaS is also highly scalable, meaning that it can grow with the business as it needs additional help. Finally, the CaaS can also help enterprises better understand their needs and the specific role of CTO in their context if they decide to hire someone full-time.
Is it Time for a Full-Time CTO?
As you can see, there are many things to consider before you begin soliciting applications for CTO. First, it takes an understanding of the role and how it fits into your organization. It also requires some evaluation of needs vs. finances to determine if this is the right move for your business. Finally, it is good to know that there are some alternatives available for companies that need what a CTO can offer but aren’t ready to bring someone on full-time.