What is CTO in business?
Everyone knows how much technology has revolutionized every industry in the world today.
Technology drives business today.
This change has come with several roles and positions in the business.
Even though many companies are very tech-savvy, some business owners may still have questions about some tech roles.
This is why this article will answer one of the most asked questions: “what is CTO in business?”.
This article has been written as the ultimate guide for anyone looking to know every important thing about CTO in business.
Luckily, you are in the right place.
At the end of this article, you will learn many things about CTO in business.
Meaning of CTO in Business – What is CTO in Business
CTO is an acronym for Chief Technology Officer or chief technical officer.
The chief technology officer is an executive within an organization that handles the technological, research and development needs of said organization.
They are usually in charge of analyzing the company’s long- and short-term technological needs and making investments that will help the company attain those needs.
Many factors, including business type, working style, etc., sometimes determine the CTO’s roles and responsibilities.
So, a CTO in some companies may take on some roles and responsibilities while another CTO in another company won’t have to take on those responsibilities.
While this is the case, this position’s core responsibilities (stated in the definition) remain the same in all cases.
A CTO often reports to the chief information officer (CIO) or, in some cases, the chief executive officer (CEO).
As you will learn from this article, this role is crucial in business.
Types of CTO – What is CTO in Business
The roles and responsibilities of a CTO often depend on several factors.
This means that CTOs often have different duties based on these factors.
Due to this difference in duties, there are different types of CTOs.
The four types of CTO are infrastructure overseers, strategic planners, thinkers, and consumer liaisons.
Let’s take a quick look at these different types of CTOs.
Infrastructure Overseer
This kind of CTO has the primary duty of overseeing an organization’s IT infrastructure.
In this case, the duty of the chief technology officer would include overseeing the organization’s data, maintenance, network, and security.
They can also implement the technical strategy of the company.
Strategic Planner
Here, the CTO is a visionary.
They have the duty of conceptualizing technology use within the organization.
This means that one of the core functions of a strategic planner CTO is to set the organization’s technical strategy so that the organizational goals are achieved.
They also need to look for and implement current technologies to help the organization attain success.
The Thinker
These CTOs are big thinkers.
They are prepared to think outside the box and aim for better use of technology within the organization.
Thinker CTOs are usually ambitious.
Typically, their roles involve:
- Setting up the corporate business strategy.
- Analyzing the target markets.
- Creating business models.
- Spurring technological infrastructure.
Due to these responsibilities, they work closely with the senior management members and the CEO.
Consumer Liaison
As the name suggests, a CTO serving in this capacity would act as the link between the business and its consumers.
Therefore, their primary duty is to understand the needs of the consumers (target market) and deliver IT projects to help meet them.
CTO Roles – What is CTO in Business
While chief technology officer positions are usually filled in most companies, a lot still needs to be clarified about this job position.
The roles of this position are not usually clearly defined, which may be confusing.
Therefore, this section discusses the roles and responsibilities of a CTO.
As you have seen in the above section, there are different types of chief technical officers with varying roles and responsibilities.
This article will further explore these roles to help you understand them better.
Creates and Plans the Company’s Technology Strategy
One of the core functions of a chief technology officer is creating, planning, and overseeing the technological strategy of the company they work for.
They often conduct analyses that help them determine the technology that needs to be employed within the organization to help it reach its goals and objectives.
Budget and Resources Planning
Another important role of a chief technology officer is planning the financial budget and resources needed to implement a technology strategy.
For example, if a strategy is meant to last for four years, the chief technology officer would have to estimate how much would be used to implement the said strategy for that period.
They also need to give information concerning other essential aspects of the strategy.
They would estimate everything concerning the finances and other resources needed to implement the strategy.
Leads Teams
Technology within an organization is more or less useless if workforce members do not know how to use it.
This is why a core function of IT departments in a company is ensuring that employees learn how to use implemented technologies.
With how fast technology advances, employee training and development will always be constant in IT.
This is why one of the roles of a CTO is to lead teams to understand better the technologies implemented in the company.
Their duty under this role is to make a plan that would enable them to train, mentor, and educate technical teams in the company.
This means that while helping implement new technology, the CTO is also responsible for ensuring the workers are adequately trained.
That’s not all; CTOs ensure employees have the right tools to become proficient in using the technology.
Engages Customers – What is CTO in Business
CTOs are the link between the business and customers, so they primarily engage with the customers.
This is the best way to understand the customers’ needs and create appropriate solutions for them.
It also makes it easier to test the proffered solutions and see if they meet the needs it was meant to solve.
Responsible for the Company’s IT Infrastructure – What is CTO in Business
Whether or not a chief technology officer will have this duty depends on the company’s size.
Some large companies often have CIOs serving in this capacity, while the CTO is only a team member.
But in smaller organizations, the CTO would also be responsible for the company’s IT infrastructure.
CTO Vs CIO – What is CTO in Business
When discussing the roles of the CTO, another acronym, CIO, was mentioned as someone who could also carry out a particular role that the CTO could, depending on how large the company is.
This shows that there may be an overlap between these two positions.
If you thought this way, then you are not wrong.
CIO stands for chief information officer.
And this position is similar to that of the CTO because both executives focus on developing, implementing, and managing technology within an organization.
While the CTO position has been around for more than 10 years (since the 90s), many people still confuse it for the CIO title.
However, these positions are quite different.
The roles of these positions may overlap at some point, but there is still a major difference between both.
This difference is that one is external while the other is internal.
The chief technology officer often operates outward.
Their major function is using technology to increase the company’s success by improving customer experience.
The CIO, on the other hand, operates inward.
They aim to improve the company’s operations and procedures through technology.
However, not all companies can fill both positions.
Larger companies may have both positions filled, whereas smaller ones may only be able to afford one or the other.
In cases like these, the CTO or CIO may have to serve in both capacities.
Skills a CTO Should Have – What is CTO in Business
If you are looking to hire a chief technology officer, it is only natural to be on the lookout for the best.
Proficient chief technology officers often have certain skills that make them good at their job.
So, when looking to hire one, you ensure they possess these skills.
Let’s discuss some of the important CTO skills below to ensure you know what to look for when hiring one.
Business Savvy
A proficient CTO has to be great in tech.
But they also have to have enough knowledge of the rudiments of business.
A CTO that isn’t business savvy may understand the technical aspect of their work but may have a hard time using this knowledge to provide solutions that will drive business success.
When a chief technical officer has enough business skills, they can use them to help the company reach its goal.
Product Management
Products and technology are very close elements in business and tech.
Therefore, a good CTO should have project management skills.
They should know and understand the product life cycle.
They should also know how to maintain existing products and also build new ones.
Engineering – What is CTO in Business
The chief technology officer should also have enough experience when it comes to the technical aspect.
For some companies, the CTO’s technical background is very important.
This is usually because the role they are to play focuses more on the technical aspect.
The CTO may have to produce software and carry out other technical roles for companies like these.
With time and as the company grows, the CTO may not be required to do this anymore, or the need may significantly reduce.
So, if this is the case for your company, you have to look for a chief technology officer with a technical background.
And even if you do not need a chief technology officer who knows how to code, employing one may be more advantageous.
Leadership Skills – What is CTO in Business
A proficient chief technology officer should have great leadership and mentoring skills.
They are likely in charge of their department, and if the department is to work effectively, they need a leader that can spur them to do better.
A good chief technology officer should be someone that can see and understand the strengths and weaknesses of employees and help them make the best of them.
They should be able to inspire others.
Communication Skills
The chief technology officer would have to communicate with both the customers and those they work with.
Good communication skills will ensure they do this properly.
Decision-making Skills
CTOs also need to have great decision-making skills.
This is because they would need to make different types of decisions.
Great decision-making skills will ensure they make the right decisions and make them on time.
In-house Vs Outsourced CTO – What is CTO in Business
Just like with certain positions in business, you can decide to either have an in-house CTO or outsource this position.
A lot of startups prefer outsourcing their CTO roles.
This is because they do not have the financial strength to have a full-time CTO.
Larger organizations, on the other hand, prefer to outsource CTO because they want access to talents outside their geological location.
However, choosing to outsource CTO or have an in-house CTO is entirely up to you.
But if you need help deciding, this article section will help you.
Both options have their benefits and drawbacks, which will be discussed below.
This way, you can better understand the options and then make an informed decision.
Advantages and Disadvantages of Outsourced CTO
Advantages
One of the major advantages of outsourcing CTO is that it is cost-efficient.
Outsourcing any type of service in business is typically cheaper than having full-time personnel.
This makes this option a great choice for startups yet to be financially stable.
Another advantage is that it helps you focus on more vital aspects of your business.
When you delegate any work in business, it gives you more time to focus on other things.
You can concentrate on very important tasks and allocate your resources appropriately to these important aspects.
Outsourcing CTO allows you to get the best talents and easily switch between CTOs.
When you outsource, you are not limited to those within your location.
Rather you have the choice to pick globally.
This makes getting the best talent for your business easier.
Apart from this, if you outsource your CTO services to a provider and you are not impressed with their work, you can easily switch to another CTO.
Doing this would be tedious and time-consuming with an in-house CTO.
Disadvantages
A big disadvantage of outsourcing CTO is that you may experience communication issues.
Communication should not be an issue in our globalized world today.
But while you may overcome the language barrier, the difference in time zone may strain communication.
Nevertheless, this isn’t that much of an issue because you can still avoid it.
All you have to do is consider time zones whenever you hire a CTO service.
Just ensure they share the same time zone as you.
You may also not have full control when you outsource CTO.
For some business owners, not being in control can be nerve-wracking, so they tend not to delegate tasks.
But then again, this should not be seen as that much of a disadvantage.
You should learn to let someone else be in charge sometimes.
Advantages and Disadvantages of In-House CTO
Advantages
A major advantage of having an in-house CTO is that they would fully and deeply understand the project.
Since they most likely came up with the project themselves and would be in charge of it from beginning to end, they would carry out the project more efficiently.
Also, unlike outsourcing CTO, you would have constant control with an in-house CTO.
The CTO will also have better control over managing the processes.
This is because they would have unhindered access to other professionals in the company.
Finally, an in-house CTO allows the company to skip setup procedures.
Once you decide to work on a project, the CTO can kick it off immediately.
Disadvantages
An in-house CTO is more expensive than outsourcing the service.
Not only will you spend money on the hiring process, but you will also spend money on wages.
You may spend a lot of time looking for the best candidate.
Good CTOs already have good-paying jobs, and you may struggle to get one for your company.
Conclusion on What is CTO in Business
The chief technology officer is very important in any organization.
This is because of the rise in the use of technology in the business world today.
The primary responsibility of a chief technology officer is to evaluate and implement new technology to improve a company’s services and ensure they meet the needs of their consumers.
A proficient CTO can significantly help an organization grow faster and succeed.
You can either outsource CTO or have an in-house chief technology officer.
However, before making that decision, ensure you properly consider the pros and cons of these options.
