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MANAGEMENT, 8 MIN READ

What is the Chief Technology Officer Role For the Company?

WHAT IS THE CHIEF TECHNOLOGY OFFICER ROLE FOR THE COMPANY?

MANAGEMENT, 8 MIN READ
TATIANA LARIONOVA

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With the advent of new technologies, new business needs emerge. Businesses should quickly adapt and implement new solutions to stay ahead. The reasonable use of advanced technology defines the success of most of today's companies.

Whereas a non-tech business could thrive on the outsourced IT team, greater leverage of digital tools and innovation often requires tech experts among senior executives. Management of the technical side of a business is a CTO responsibility. They help the company stay competitive and technologically sustainable.

The article will bring to light the many responsibilities of the different CTO types, give recommendations on whether your company actually requires a CTO, and what are the alternatives.

1. What is a Chief Technology Officer (CTO)?

First, we'll answer what does CTO stand for?

CTO is an abbreviation of Chief Technical Officer or Chief Technology Officer. Such position relates to so-called C-suite or C-level senior executives. C means "Chief," hence all of those officers are responsible for the company-wide decisions, but each position implies different areas of responsibility.

The Chief technology officer is one of the vaguest and broad of all C-suite positions. This leadership function combines technology and management issues and primarily focuses on the tech stack that helps a company grow.

In general, the Chief Technology Officer role is to manage an organization's research and development as well as its technological needs. A CTO should capitalize on the knowledge of existing and emerging technologies to provide the business with the best possible future solutions.

In his interview with John Brockman, founder of Edge, Nathan Myhrvold explains how to be a CTO feels to him:
My job at Microsoft is to worry about technology in the future. If you want to have a great future you have to start thinking about it in the present, because when the future's here you won't have the time.
It's almost impossible to give an exact answer to the question "what does a Chief Technical Officer do?" because their duties significantly vary depending on the size and type of company (service or product), as well as the company lifecycle.

Tom Berray and Ray Sampath made an outstanding contribution to this issue's elucidation in their definitive work "The Role of the CTO: Four Models for Success." They suggested a model that dissects the Chief Technology Officer role based on organizational needs into four types:

Chief Technology Officer role

Infrastructure Manager
  • runs the infrastructure, development & maintenance of applications, security, and network;
  • implements the technical strategy;
  • manages the technology roadmap for the business;
  • rather works for an established company than occupies a position of a CTO startup.

Big Thinker
  • leads setting-up of a corporate strategy;
  • carries out competitive analysis, technology assessment, partnering;
  • contributes to new technologies;
  • creates business models;
  • has a close relationship with other senior executives within the company.

Technology Visionary and Operations Manager
  • sets the technical strategy for the company;
  • is responsible for integrating and running the technologies - Operations Manager side;
  • likely works in the company since its establishment (often as a technical cofounder).

External-facing Technologist
  • acts as an intermediary between the customer and the business;
  • takes on the responsibilities of customer relations;
  • is involved in market research;
  • facilitates delivering IT projects to market;
  • often presents in software-focused companies.

2. The Main Chief Technology Officer Responsibilities in Product Development

In the product development domain, the main CTO's objective is to ensure technology implementation satisfying customer needs while keeping the development profitable. They guide the team through technological decisions to get to the set destination.

How to be a CTO who succeeds in product development? Such an individual need to maintain balance on three pivots:

  • Technical capability

  • Domain knowledge

  • Great execution

what does a Chief Technical Officer do
The combination of these competencies is the key to delivering a useful qualitative product in time.

Speaking more specifically a person playing such a Chief Technology Officer role should be well versed in:

  • Development of a tech product vision and roadmap;

  • Architecture building;

  • Supervising product development;

  • User Research, UI/UX;

  • Quality Assurance, DevOps;

  • Teams management;

  • Collaboration with product owners, VP of engineering, and founders;

  • Technical support.

3. CTO, Co-Founder or Tech Partner

Activities similar to CTO can be carried out by other executors, namely Co-founder and Tech Partner. The table below may be helpful for employers when finding a technical cofounder, tech partner, or Chief Technical Officer.
what does CTO stand for
Click on the image to enlarge

4. How to Determine When You Need a CTO?

Our experience proves that most startups do not need a СТО on an ongoing basis but only to assist in critical decisions. There are also several more reasons why it is not advisable to hire this officer just after startup launch:

  • it isn't easy to find a person with the same project vision and pursuit;

  • it's expensive because CTO startup is a well-paid position;

  • it takes a lot of time and commitment since to headhunt a person with the required tech competency and wiliness to partner is a difficult task (this is not the same as hiring even a high-skilled developer).

On the other hand, small and medium businesses and fast-growing startups are the organizations that could benefit when hired a CTO for a number of reasons:

  • to move technology from a support to a strategic functioning;

  • to innovate the company digitally;

  • to fulfill a product owner role;

  • to evaluate new technology or upgrade the technology stack;

  • to build a strong tech team in-house;

  • to represent a company at tech events.

5. CTO Role Depending on the Company Lifecycle

As we have already mentioned, the Chief Technology Officer role changes depending on the company lifecycle. That is so because each development stage is unique and represents a challenge from a different perspective.

Let's briefly detail how CTOs responsibilities may evolve with the company's progress.
CTO startup
Click on the image to enlarge

Seed
The Seed stage starts when a business idea is born. In this period, a CTO (who also may be a technical cofounder) is preoccupied with the following activities:

  • Verification of the business idea feasibility

  • Reasoning of technical solutions for IT product implementation

  • Provision of a match between the business scope and needed technological resources for the first months of operation

Startup
If everything goes well in the Seed stage, a startup company is formed. Usually, at this time, the firm can take one of its products or services to market and see if clients perceive it positively.

Studies show that this is the riskiest stage over the entire company lifecycle: 90% of startup companies fail. It takes exceptional diligence and commitment from the CTO to get to the successful 10% in this phase. CTO startup responsibilities include:

  • A quick assessment of the existing platform, team, and processes

  • Team scaling by hiring more developers and onboarding them

  • Fast implementation of the required changes

  • Determination of the technology architecture that fits the business strategy

  • The leadership of the corporate decision-making process concerning the technology role and the budget allocation

  • Ensure data confidentiality and integrity while maintaining agility and easy information access

  • Setting up the development processes in such a way to provide the best possible work efficiency

Growth
Once a company takes its product to the market and starts selling it to more customers, it enters the growth stage. This is when the majority of companies reach the break-even point and generate satisfactory revenues.

At the growth stage, the CTO's focus shifts to management, and their duties cover the following:

  • Monitoring trends in the tech field and adoption of the ones that could boost business productivity

  • Hiring personnel, who can take over some CTO responsibilities

  • Preserving the competitive benefits by using the most relevant technologies

  • Representing the company at professional events.

6. Alternatives to Finding a CTO

"How to find a CTO?" is a common question for non-tech founders and entrepreneurs who run/own multiple companies. However, it often makes sense to take a broader approach to this issue and consider other options for implementing the project's tech side. It may be a part-time consultant, outsourcing development team, or CTO-as-a-Service.

Possible one of them helps a company to achieve a good result, spending reasonable time and money. Whether this is a good idea depends a lot on the type of developed product: a high tech product may need a CTO, and a less high tech one may not.

We made a short analysis and provided the advantages and disadvantages of each alternative.

how to find a CTO
Click on the image to enlarge

Part-time consultant
A consultant is a person who provides expert advice, and businesses deal with them when niche expertise is needed. Such an individual can guide a company to increase competitiveness and efficiency, keep it up with the trends.

Pros

  • Less operational cost than hiring a new employee in the long term wise

  • Introducing invaluable expertise and skills not available in the organization to handle IT problems

  • Flexibility to terminate the contract if the relationship begins to sour

Cons

  • Difficulties with finding the professional who matches the corporate culture

  • Third-party consultants often lack knowledge of in-house processes, which may cause work conflicts

  • Risk of low-quality deliverables, especially if the company member does not monitor the consultant's activities

CTO-as-a-Service
CTO as a service (CaaS) implies the assistance of a freelancer who has the same obligations as a CTO or part of them. It's a good option for companies that require an employee carrying out the Chief Technology Officer role but don't need, cannot afford a full-time CTO, or yet to find them.

Pros


  • The company only pays for the services it gets

  • CaaS allows the team to attain experience from a different perspective

  • Business gets expertise from a high-class professional

Cons

  • Intellectual property may be at risk of exposure

  • Such service is unavailing in developing a strategic roadmap with windows of two to five years

  • Before hiring, due diligence should be carried out

Outsourcing development team
Utilizing an outsourcing development team as a technical partner to build a new product may be a good idea. Henry Ford superbly explained the essence of outsourcing:
If there is something we can't do more efficiently, cheaper and better than our competition, there is no sense in doing it, and we should employ someone to do the better work for us.
Pros

  • Gaining an immense pool of resources at a fair price

  • No need to manage people

  • The team gets to work almost immediately and quickly progresses

  • Opportunity to focus on business matters, improving the core processes

Cons

  • It's maybe not easy to align the outsourcing team' and company's interests, for example, in defining project scope

  • Performed work might lack the standard and quality

  • Partial loss of control over tasks execution

  • Risk of data theft

7. Wrapping up

Most companies need someone who can bridge the gap between technology and business. Usually, this function is performed by CTO.

The Chief Technology Officer role greatly depends on the business cluster, size, development stage of the company and may cover such issues as:

  • Technical strategy

  • Software development

  • Business-level tasks

  • People management and team coordination

  • Cybersecurity

The smaller the company is, the more CTO is involved in the development and less in the management (and vice versa). Frequently startups do not need a full-time СТО at all. Moreover, CTO is scarce. That's why hiring the one can take time. Not to lose momentum on the market and save money, it is worth considering other viable options:

Freshcode experts are ready to discuss the partnership and suitable solutions that our CTO may offer for your product development. You can book a free consultation on our website or contact our representative via LinkedIn.
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