CTO as a Service: Hiring Expert Tech Leader on Demand
Explore how a part-time external CTO can accelerate your company's growth. In this article, we explain how CTO as a service works, what are the benefits, and how to hire the best expert.
Introduction
Do you need ad-hoc support with your IT infrastructure, technology strategy, or project leadership?
Want to optimize your budget but not at the expense of quality?
Do you have a startup and are looking to scale quickly?
If so, CTO as a Service may be just for you! In this article, we'll discuss how a part-time external Chief Technology Officer can help you expand the prospects of your business.
CTO ‘subscription’ – is that even possible?
We live in a subscription world. Increasingly, rather than owning something on our own, we prefer to pay for access to products when needed. Flats, cars, services, software, digital products – we can rent anything. And it's no different with expertise.
Companies have long benefited from outsourcing skills and competencies they don't have in-house. In many organizations, areas such as software development, marketing, PR, or HR are taken care of by experienced advertising agencies, recruitment companies, and software houses. This business model has proven to be so efficient and cost-effective that it has also expanded to single, specialized positions within the company. An excellent example of this trend is CTOaaS.
CTO as a Service – How Does it Work?
A CTO, or Chief Technology Officer, is an expert who combines technology and business competencies. This person is responsible for developing and managing the company's technology resources and planning tech development strategies based on current industry trends and the organization's business needs. Such a wide range of competencies makes it quite a challenge for a company to hire an experienced CTO. Not to mention the cost, as a C-level expert expects a C-level salary, and full-time cooperation is a big investment. Fortunately, the market today offers a solution to these worries.
CTO as a Service is a business arrangement where a company hires an external individual or firm to provide CTO-related services on a temporary or contract basis. It's an alternative to having a full-time, in-house CTO. This approach can be especially beneficial for startups, small businesses, or organizations that require technical expertise but may not have the resources or need for a permanent CTO. Why is this solution so revolutionary? The use of external specialists such as graphic designers, copywriters, or developers is standard in the market, but C-level staffing is usually reserved for in-house employees. Today, we are seeing an evolution of this approach.
CTO as a Service vs. In-house CTO
At this point, you're probably asking yourself "Why should I hire an external CTO when I can have an in-house full-time expert?". Well, to answer this question, you always have to consider two factors: needs and resources. So let's compare the two options.
In-House CTO
Pros:
- Deep Company Understanding: An in-house CTO is fully integrated into the company and understands its culture, goals, challenges, and opportunities.
- Long-Term Commitment: An in-house CTO is likely to have a higher level of commitment to the company's success and growth.
- Immediate Availability: Since they are always on-site, in-house CTOs can respond quickly to technology-related issues and opportunities.
- Cohesive Team Building: In-house CTOs can work closely with other departments and technical teams to build a cohesive and aligned technology strategy.
Cons:
- Higher Costs: The salary, benefits, and overhead costs of an in-house CTO can be significant, especially for smaller companies or startups.
- Limited External Perspective: In-house CTOs may become entrenched in the company's existing practices, potentially limiting exposure to new ideas and approaches.
- Risk of Skill Gap: If the in-house CTO's skills become outdated or don't align with evolving technologies, the company could face challenges.
CTO as a Service
Pros:
- Cost Savings: CTO as a service cost is significantly lower since you're not bearing the full expense of a full-time executive, including salary, benefits, and bonuses.
- Flexibility: You can engage a CTO as needed, which is particularly advantageous for specific projects, temporary needs, or during periods of technological transition.
- Expertise on Demand: You get access to specialized expertise without committing to a permanent CTO. This can be valuable for companies needing guidance in specific technical areas occasionally, not on a regular basis.
- Innovation and Fresh Perspective: An external CTO can bring fresh ideas and insights from working with various organizations, potentially driving innovation.
- Objective Decision-Making: External CTOs might provide a more unbiased perspective on technology decisions and strategies since they're not as deeply embedded in the company culture.
Cons:
- Limited Company Knowledge: An external CTO might take time to understand the company's culture, operations, and unique processes.
- Lack of Long-Term Commitment: Since they're not engaged in long-term cooperation with the company, an external CTO might not have the same dedication as an in-house CTO.
- Coordination Challenges: It can be challenging to coordinate and align the external expert's work with the rest of the team, especially if the CTO's availability is limited.
Putting all this information together: an in-house CTO will be a better option for bigger companies that need regular technology support on a daily basis, manage multiple processes and specialists, and budget is not an issue for them.
Meanwhile, CTO as a Service for startups and smaller businesses is an opportunity to gain technology support, expertise, and access to the latest trends and innovations that are key to growth and scaling in a cost-effective way.
Why to choose CTO as a Service - benefits
- Easier recruitment
Instead of spending time and resources on a lengthy hiring process, you can quickly bring in a qualified CTO with the required expertise.
- Hire-as-you-need approach
Hiring a full-time C-level expert is a mutual commitment. If the nature of your business doesn't require constant engagement from the CTO, it's better to use the support of an external specialist as you need it. Otherwise, you will have to incur the cost of retaining an expert whose potential you are not using, or constantly hiring and firing CTOs which would expose you to a negative reputation for your company as a non-reliable employer.
- Fresh perspective
Working for a company on a regular basis makes a person accustomed to its processes and the way it operates. It's hard to stay alert and open to change when you've been doing things "as always" for years. Support from an external expert provides an objective perspective on technology decisions and strategies, as they are not as deeply involved in the company's internal dynamics and politics. This can lead to more effective decision-making.
- Flexibility
CTO as a service offers flexibility in terms of engagement. You can hire a CTO on a project-by-project basis or for specific timeframes, such as during a technology transition or a critical phase of development. This flexibility allows you to adapt your technological leadership to your company's evolving needs.
- Cost Savings
One of the biggest advantages of CTO as a service for startups and small businesses is cost efficiency. CTO as a service cost is significantly lower than a full-time expert as you pay for the services only when you need them.
- Rapid Scaling
If your company is experiencing rapid growth, a CTO as a service can help you scale your technology infrastructure and strategies quickly to meet the increased demands.
- Network and Industry Insights
External CTOs often come with a broad network of industry contacts and insights. This can be beneficial for partnerships, collaborations, and staying up-to-date with industry trends.
Cooperation models with examples
The flexibility of CTO as a Service allows you to choose a business model that fits your company's specific needs. We can distinguish three main types.
Part-time CTO
In this model, the company gains access to an experienced expert for the number of hours it needs. The possibilities are wide, for example, CTO services 6 hours a day for six months, 8 hours a day for 3 months, 2 hours a day for a year, and so on. It all depends on your business goals and scope of work.
Example: You have made a merger with another company and want to create a strategy for long-term technological development in the new structure and plan to expand the team to get specialists with the right competencies. CTO as a Service will help you coordinate the work of the newly enlarged team and recommend the best strategic steps based on current trends.
Fractional CTO
In this model, an external CTO offers the company strategic tech leadership and advice on selected areas or competencies.
Example: You employ an in-house CTO at your startup however, there is a need to expand one’s skills and knowledge into new areas. CTO as a Service can provide your in-house expert with support, knowledge, and guidance in the competency development process, giving him or her knowledge of innovation and a fresh perspective.
Project CTO
This option will be a good choice for fixed-scope projects, where an external CTO will manage and guide the development team through all stages of product design, implementation, and launch.
Example: You need a new web and mobile application for your product. Three teams are collaborating on the project: your internal team, the developers of the software house you're working with, and your SaaS provider. You need an external, objective expert to help you choose the best technologies and solutions, analyze the recommendations of each party, coordinate the work of many people, and oversee the project from start to finish.
How this works in real life - examples
The external CTOs can provide support in many areas of activity at the intersection of technology and business. Among the most popular services offered by CTOaaS companies are:
- Strategy and architecture, including product roadmap, tech stack, and team composition.
- Oversee the compliance of actions taken with the strategy and business objectives.
- Education, guidance, and leadership of the project team and internal specialists.
- Redesign and scaling of existing solutions and systems.
- Budget optimization by selecting the most effective solutions for the company's current situation.
- Modernize the current infrastructure by recommending new technological solutions.
- Developing the team by supporting the process of selecting the best specialists and vendors to work with.
- Advisory and consulting at every stage of company development planning, project execution, and strategy implementation.
CTO as a Service Hiring Options
Interest in the CTO as a Service model is growing. More and more companies are looking for external specialists, and thus - more and more entities are offering this service. Here are some CTO as a service hiring options:
CTOaaS companies
There are companies that specialize in offering CTO as a service. These firms have a team of experienced CTOs who can provide strategic consulting, technology roadmaps, and project management services.
Technology Service Providers
Some technology service providers, such as IT consulting firms or software houses, offer CTO as a Service as an extension of their offerings. They can provide technology leadership while also providing technical solutions. If you have a trusted business partner or have found a company with an impressive portfolio they'd like to work with, ask if they offer CTOaaS.
Independent Consultants
Technology consultants with CTO-level experience can be engaged as freelancers on a project basis or for specific periods. They can provide strategic technology advice, oversee projects, and offer guidance tailored to your organization's requirements.
Tips to Hire the Best CTO as a Service
The business world is becoming more flexible and optimized offering access to new services and skill hubs. CTO as a Service for startups and smaller companies can be a cheaper, more flexible alternative to an in-house CTO. Tapping into the expertise of an outside expert will give you a fresh business perspective, greater ability to scale, and access to broader knowledge and experience.
How do you find the perfect candidate?
- Identify your business needs, budget, and priorities.
- Identify areas where you need support.
- Do research on CTOaaS companies, software houses, and freelancers for desired services.
- Make discovery calls - there's nothing like direct contact to get your questions answered!
- Choose your new external CTO and add a solid asset to your company!
