Have you ever asked yourself “what is a fractional CTO?” while reflecting on how to improve your business?
As you probably already know; running a successful business comes from hiring and coordinating the right people. The majority of successful businesses have their very own chief technology officer (CTO); who is able to keep track of technological innovations, as well as implement them to make the business more efficient and profitable.
However, sometimes a regular CTO is outside the budget of a small to medium business. That doesn’t mean a business shouldn’t have access to such an important resource. That’s where a fractional CTO comes in.
What is a fractional CTO?
A fractional CTO, instead of being hired on a full time basis, provides on-call CTO advisory services and consulting for businesses. The fractional part of their namesake references how these CTOs work:
- For a fraction of the time
- On a fraction of the projects
- For a fraction of the cost
For the CTO specifically, this type of work offers a variable incentive, as it provides the opportunity to offer the same important skills to a wide range of clients of various sizes. As long as there is technology, and that technology benefits businesses, a fractional CTO will find work.
What are a fractional CTO’s responsibilities?
Broadly speaking, a fractional CTO’s goal is to understand the company’s business objectives and provide technological solutions in order to facilitate them. The end result is that a fractional CTO helps a business minimise their costs and maximise their ROI.
In order to make this happen, a fractional CTO requires expertise in;
- Technology leadership and management
- The development and delivery of technology products and services
- The management of software development, as well as software development methodologies
- Technology vision and strategy
- Technology roadmap and the alignment of business objectives
- The communication of technology strategies
- Strategic partnerships management
- Technology staff management
- Technology scalability, robustness and maintainability assessment and planning
- Risk, security and compliance management
- Technology governance
- Technology research and evaluation
- Capital allocation, ROI evaluation and budgeting
- Contract review and negotiation
- The definition of key performance metrics
When should you hire a fractional CTO?
If you’re a medium size business, there are two truths concerning your priorities.
- You need someone to coordinate the technological logistics of your business operations
- You also probably lack the budget to hire someone full time in order to achieve this
That’s just one of the scenarios where a fractional CTO is the solution for you. You should also consider hiring a fractional CTO if:
- Your business needs to make technology investments, but you don’t have a technology expert in your team
- Your team features a handful of software developers that might be lacking the right experience or industry knowledge to make the strategic tech decisions for your company
- You’ve consistently struggled to meet company milestones or raise funds to grow your business
- You don’t have enough work to justify employing a full-time CTO
- You’re working on a specific project that requires insight from a seasoned tech executive
- You’re in-between CTOs and need someone to quickly and temporarily step in
What are the benefits of a fractional CTO?
There are a multitude of benefits that come from hiring a fractional CTO. Of course, there is the obvious benefit of having the expertise of a CTO, but at a more accessible price and with services that are easy to tailor to your business’ needs.
But, there are other benefits too, and they all accumulate into an effective way to help your business grow. We’re talking about improvements to the operations of your business, as well as new ways to achieve a better return on your investments. Below, we’ve listed the major benefits that come from hiring a fractional CTO.
A new strategic viewpoint
A CTO doesn’t just offer advice regarding technology for your business. The role of a newly hired fractional CTO in your business is to act as a single point of contact and the team member that is solely responsible for designing a technology strategy and the infrastructure and applications that will help you meet your business goals. The fractional CTO plays an integral part in your executive team, and the technology strategy and roadmap that they subsequently develop will closely align with your business needs and drivers and allow your business to be both competitive and productive.
A new resource for information
It shouldn’t come as a surprise to anybody that a CTO typically brings years of experience and a wealth of information to your business. Their career has been dedicated to determining the most effective ways to incorporate technology to ensure business growth. A CTO plays an invaluable role in the following processes:
- Determining the best technology strategies
- Designing and implementing the best infrastructure strategies
- Educating you on how to utilise social media to expand your customer base and make more conversions
- Examining the feasibility of integrating cloud computing into your business’ SOP
- Providing overall leadership and vision, etc.
A new liaison for your business
Communication plays a key role in how a business conducts itself. This means there are a lot of businesses that suffer from a lack of communication, particularly between different departments. For example, your IT department might have a cursory understanding of business processes and vice versa, but that doesn’t guarantee that these two departments can work together without external help.
What does guarantee that these two departments can work together is a liaison with extensive experience in both business and technology who can communicate and translate between the two separate departments. Your CTO can translate business speak into technology terms and also explain technology solutions in layman’s terms. This allows both the business and technology teams to understand goals, technology, and business drivers.
A guaranteed return on investment
The main goal of a fractional CTO is to help align technology spending with business objectives i.e. they’re going to make sure that the technology related decisions you make now pay off for your business in the long term. They achieve this through a variety of methods, such as:
- Conducting cost/benefit analyses for potential technology investments
- Maintaining budgets
- Define ROI baselines
- Help your business decide which technology projects, services, or applications will meet your business needs and what the return on investment will be
A new avenue for experience
Upon hiring a Fractional CTO, you get an expert capable of providing a broader spectrum of experience across many technologies. This eliminates the need for you to support a staff trained in multiple disciplines, while at the same time providing your business with new perspectives that can inform better standard operating procedures going forward.
Keep in mind that a fractional CTO exists outside of your business, and is therefore able to bring a wealth of knowledge and experience that exists outside of the confines that your regular staff is used to.
What should I consider when hiring a fractional CTO?
However, this does not mean that every business should hire a fractional CTO right this second. Much like any other business decisions, there are factors that need to be taken into consideration before they can be finalised. These decisions include factors such as:
The size of your business
Fractional CTOs are ideal for medium sized businesses. While they can be of some use to businesses that are of a size that’s larger or smaller, you want to ensure that:
- Your business isn’t too small to the point where hiring a fractional CTO could severely impact your business’ finances in a negative way
- Your business isn’t too big that a fractional CTO cannot feasibly coordinate your various departments due to their insurmountable size
The skills of your in-house team
It’s important to understand the skills of your in-house team to make sure that they don’t overlap too heavily with your fractional CTO. This is for two major reasons:
- It is entirely redundant (and therefore a waste of money) to hire a fractional CTO if you already have staff who are able to coordinate your business’ technology
- Staff that have the skills to conduct themselves as a fractional CTO may feel undervalued or under appreciated if you ignore them in lieu of hiring an external party
The complexity of your technological needs
Some businesses have more elaborate technology frameworks than others. If you’re a small business, you might not need an extensive technological evaluation that necessitates the hiring of a fractional CTO. It’s important not to see a fractional CTO as an instant way to improve your business; but rather as a means of identifying areas where your technological needs can be addressed, then determining the best way to address them.
In other words, if there are no perceivable gaps in your business’ technological framework, you might not need a fractional CTO.
Both the short and long term goals of your business
Remember what we said about communication? The less time you spend having to induct your CTO into your business’ culture and whatnot, the more efficiently they can help solve your business’ problems.
That’s why, before you approach any fractional CTO, you should already have a strong and communicable idea of what you hope to achieve for your business in both the short and long term. To put it simply, it gives your fractional CTO something to work with.
Where can I get high quality help for my business?
Digital Treasury does not offer a fractional CTO for your business. However, we do offer a wide range of knowledge and expertise to heighten your business’ visibility online. Contact us so we can help you grow your business.