What is a CTO? And does your company need one?

A Chief Technical Officer or CTO is a very important position in many companies in the 21st century. A CTO is the top-level executive that is responsible for that organization’s technology needs. This could include research and development projects, as well as management of how the company uses tech to engage clients or customers. The CTO is usually the decision maker when it comes to determining long and short-term tech needs. They may also have the power to make large investments in the technology operations of their company. In a corporate hierarchy, the CTO will usually report to the Chief Information Officer (CIO), who in turn reports directly to the CEO.

As you can see, the CTO is an incredibly important position in a business world that is dominated by tech and e-commerce. And as you might imagine, it’s a very lucrative job if you have the skills and experience to qualify for the position. In America, the median salary for a full-time CTO is between 250,000 and 300,000 dollars. That’s a large chunk of change for any organization and its why many companies choose not to have a full-time CTO. There are other reasons for not keeping a full-time CTO on staff, the company might not simply have the need, but in the modern business environment, they will at some point.

What is a fractional CTO?

So, what is a company to do if they can’t afford or don’t need a full-time CTO? Well, there are a few options, but a solution that is growing in popularity is the fractional CTO. This is an option for many businesses who have specific needs in the tech realm that require a highly trained professional to help see them through. They work in many ways like a consultant, brought in to work on a project temporarily with intensity and focus. Unlike a consultant, a CTO will have the authority and sway of an executive.

Basically, a CTO that works fractionally takes on a fraction of a company’s tech work, for a fraction of time, at a fraction of the cost. This is different from positions like a part-time or interim CTO. A part-time CTO will do what a full-time one does but in a limited capacity. A CTO acting in a fractional capacity will only take on a finite number of activities, issues, or needs for a business. This focus on certain areas, versus trying to take on all the tech needs of a company, is an important distinction.

An interim CTO is exactly what the name suggests, it is a person who oversees a company’s tech for a limited amount of time. The term interim can be removed but, often when that happens, it’s intended to be a full-time position. And now that company is back on the hook for a quarter of a million dollars per year. Why go to the trouble of naming an interim CTO if they’re looking to have a permanent one? When the need for a permanent CTO is in question, many smarter companies are opting for the fractional CTO.

What does a CTO who works on a fractional basis do?

Fractional CTOs solve the same problems that full-time CTOs do but, they do it thoroughly, quickly, and for less of a financial cost to the business. It is expected that the need for fractional CTOs is only going to keep growing. There are any number of functions this kind of CTO can take on depending on a company’s size, the industry that they occupy, and the maturity of the business. Traditionally fractional CTOs have been associated with startups, but that attitude is shifting. Now, companies are starting to understand the value they bring and even large companies who have had traditional CTOs are embracing them.

Fractional CTOs will usually involve themselves with boots on the ground tech work and business development. Sometimes they will focus on exclusively tech matters like collaborating with developers or overseeing IT maintenance. Regardless, they are crucial at the executive level in making huge decisions and playing the role of connecting upper management to tech teams. Companies looking to find a fractional CTO will need to figure out where their issues lie and then find one who excels in that space.

Fractional CTOs can oversee a multitude of operations in a company. However, as the name implies, they will probably only be brought in for a fraction of them. If the company has trouble improving areas like daily operations, cybersecurity efforts, technology contracts, routine maintenance, or even crisis management, they might need a full-time CTO. But if that company needs focused, high-level help for a specific area, say cybersecurity, they might only need to Find A Fractional CTO who specializes in cybersecurity.