Is a Fractional CTO the Right Choice for Your Growing Business?
Any growing business that’s even mildly associated with tech requires a CTO to handle the day-to-day technical operations as well as streamline the short and long-term goals of the business from a technical aspect.
However, as a new business, it can be tough to hire a full-time CTO, mainly due to budget constraints. If your business also comes under this category, do not worry.
In the digital age, the need for CTOs is increasing, and that’s why the fractional CTO model is becoming popular. Keep reading to know more about it.
Who is A Fractional CTO?
Many businesses today require a Chief Technology Officer or CTO to handle their technical operations but can’t afford to get a full-time hire. That’s when they create the position for a fractional CTO.
Essentially, a fractional CTO takes the leadership position to streamline a business’ basic functions but in a fractional capacity, much like a freelancer or contractor.
This CTO handles multiple businesses that require technical expertise and leadership and helps them create strategies and Standard Operating Procedures (SOPs) to help them grow.
What Does A Fractional CTO Do?
The roles and responsibilities of a fractional CTO are pretty similar to a full-time CTO, except for the exclusiveness and working hours.
Here’s a basic run-down of the roles and responsibilities of a fractional CTO:
Research & Development Of SOPs
Every growing business requires Strategic Operating Procedures to achieve their goals.
A fractional CTO can help create detailed processes and procedures for organizations to follow a technology roadmap without the need of a full-time executive.
However, the detailed process development requires in-depth research from a professional perspective. For businesses that are small and mid-sized, hiring a part-time CTO can help them achieve their business goals in an efficient yet cost-effective manner.
Implementation Of Technological Strategies
For businesses that aim to grow at a speed at par with technological evolution, finding the right fractional CTO can help create an environment of strategic guidance that facilitates the implementation of these technology strategies faster and brings them to fruition.
The right part-time CTO can help organizations to bridge the gap between ideas and execution.
Establishing Short And Long Term Goals
Every business must set certain short-term and long-term goals to grow in their industry. However, a new business might find goal setting difficult, especially after the initial setting up of processes is done.
In order to scale a business, defining business objectives and setting up key performance indicators (KPIs) is important, especially for technology projects.
A fractional or part-time CTO can help develop a business strategy using their specialized expertise that favors short and long term goals that are in alignment with the industry and niche that the business operates in.
Leading The Technical Team
Technical leadership is an essential component of a successful business strategy.
In order to lead the technology team at your company, you need someone who’s been around the block and has a grasp of strategic technology leadership. By hiring a Chief Technology Officer on a part-time basis, you can give your executive team a strategic vision to grow your business.
Overseeing Product Development
One of the biggest responsibilities of a CTO in a fractional role is to oversee the process of product development and ensure that your organization’s tech product or service is ready for its intended use.
Experienced technology leaders compare tech strategy, product needs, and other essential factors to ensure the technological advancements of a developing product.
Ensuring Compliance With Industry Standards
There are a lot of legal and regulatory requirements that a business must fulfill in order to become compliant with industry standards.
An experienced tech leader gives valuable insights across the business landscape and especially tech sectors to ensure compliance giving the business that they’re involved with a competitive advantage against their counterparts.
Focusing On Cybersecurity Practices
Apart from the regulatory and compliance component, the key advantage of having fractional tech leaders is that they’re an integral part of risk management in business operations.
With their expertise and technical knowledge, these professionals refine development processes and find innovative solutions to detect, assess, and mitigate cyber threats and ensure that cybersecurity practices that are compliant with the industry standards are followed for long-term success.
Fostering Communication And Collaboration
Unlike a full-time Chief Technology Officer, a part-time or fractional CTO might not be available to your organization all the time.
However, owing to their experience and vast professional network, they bring with them a culture of team building and management that can help tech teams work together in harmony.
This high-level fractional tech leadership can play a crucial role in the growth stages of a business and can offer a competitive advantage to organizations that are looking to build a culture of innovation and inclusivity in the workplace.
Benefits Of Hiring A Fractional CTO For Your Growing Business
Strategic Expertise at Fractional Cost
If you are planning to hire a fractional CTO for your growing business, you must know that it’s a cost-effective investment for your growing business. Fractional CTOs bring strategic thinking to the businesses that they help grow at a fraction of the cost of what it would take to hire a CTO with a full-time commitment.
Research & Development For Scaling
These fractional executives bring innovation and technological expertise to the table, both of which are necessary for scaling a business.
By hiring a fractional CTO, you save time and manpower that would otherwise go into researching and developing innovative solutions for your growing business.
Strong Leadership Skills
Fractional CTOs bring high-level technology leadership to any role that they go into. Their innovative technology solutions, valuable insights, and project management skills help organizations cut back on overhead costs and manage their internal teams professionally.
Proficiency In Information System Creation
These tech leaders are proficient in creation of custom software development and information systems systems and are responsible for leading software development teams.
If your business aims to create cutting-edge technology, a fractional CTO can offer you soft skills such as problem-solving and efficient team management skills apart from specialized industry knowledge, quality throughout development as well as actionable insights that you can translate into your work to create a better information system.
Shouldering The Workload
When your workload is expanding, and financial resources are limited, you need someone to come in and handle multiple tasks at the same time.
A fractional CTO is a tech leader who can wear multiple hats to help your business grow at a fraction of the cost that you’d be paying to multiple full-time employees. Whether it’s vendor management, tech stack management, or managing the engineering team, you can always rely on a fractional CTO to fulfill the business operation needs.
Analyzing And Managing Data
Data analysis and management are an integral part of a successful business. If you’re new to the industry, it might be difficult to scale your business unless you know what to look for and how to achieve your goals.
A fractional CTO can make the process of defining and setting goals easier by shouldering the responsibility of data management. If you’re a business that’s continuously increasing your database and needs robust methods for accurate data analysis, investing in a fractional CTO is your best bet.
Signs Your Growing Business Needs A Fractional CTO
Your Business Requires Technical Expertise
Whether you’re directly involved in the tech industry or your business relies on technology for its daily business operations and management, you need a Chief Technology Officer to take care of your business needs.
Having a tech leader in your team, even in a partial capacity, can offer your business the technical expertise that it requires in order to grow.
For instance, if your business is focused on digital marketing, a fractional CTO can play a crucial role in designing and implementing technical strategies for scaling SEO for your business, while offering experience with premium link building.
Your Product Development Quality Is Becoming A Concern
Are your customers dissatisfied with your product or service? Are they sending out emails or leaving negative feedback and reviews on your website?
These unfavorable circumstances can negatively affect your business and can lead to stagnation or even downfall. If your business is consistently facing backlash, it might be time to hire a fractional CTO to ensure that your product development needs are being met.
Your Business Works With Sensitive Data
As you begin to scale your business, you will need to develop better information systems to store and streamline sensitive information.
A fractional CTO can help you build stronger information systems to decrease the chances of data breaches and ensure that proper cybersecurity protocols are being implemented.
Your Business Needs Innovation To Stay In The Race
If your product or service is getting lost in the hundreds of other similar products that your competitors are offering, it is time to get a fresh perspective from a leading tech expert on finding more innovative solutions. They can bring a kick to your business model to not only keep you in the running but also help you win in the long term.
Your Business is New To The Industry
A novel business is susceptible to multiple market risks such as financial woes, technology risks, compliance, regulatory misinformation, or the ever-evolving market needs.
This can be a make-or-break point for your business. A CTO can bring technical and leadership skills to the table, reducing the risks associated with starting a new business, helping you strengthen your feet in the industry, and finding ways to scale your business in the long run.
Cost Of Hiring A Fractional CTO
The cost of hiring a fractional CTO depends on many factors, namely:
- Their overall work experience
- The industry and niches that they’ve worked in.
- Specialized and general skill set
- Time devoted per day, week, or month.
Based on the factors above, the average cost for hiring a fractional CTO can range anywhere from $1000 to $300 per hour based on the size of the organization and who’s using these services.
For example, a CTO will charge higher for creating a plan for the VP of a Fortune 500 as compared to a small consulting firm that requires SOPs creation for their new business.
Fractional CTOs can also be hired on a monthly retainer basis. The cost can vary vastly, but an average hiring cost can lie between $5000 to $15000 a month. This also factors in the cost of whether you’re hiring a fractional CTO directly or through an agency.
As compared to this, a full-time Chief Technology Officer will cost a business over $300,000 dollars a year.
For organizations that can’t afford to hire a full-time CTO just yet but require technical expertise to scale their business, a fractional CTO is the right choice.
Ways To Hire The Right CTO For Your Growing Business
Create An All-Encompassing Job Description
Hiring for any role requires precision and an understanding of what is expected of the person who fills the role in your organization. So make the job description as detailed as possible.
When you give potential candidates a fair idea of what the business needs are, how much experience they must possess, as well as a count of all the technical and soft skills that you’re looking for, you make the hiring process easier for you and the candidate.
Define Your Business Goals
Just like any other job description, a fractional CTO can also be hired once you know what your business needs in order to grow and how the position will fit into your business goals.
Maybe your business needs a person who can handle cybersecurity threats that your business is facing but product development isn’t your concern right now.
So, finding a person that fits with your vision for your business is essential for hiring the right CTO for your growing business.
Narrow Down The Talent Pool
It can be really difficult to sort through hundreds of resumes and cover letters when hiring for a fractional CTO. To keep the recruitment process fair and manageable, use an Applicant Tracking System (ATS) to narrow down your talent pool based on certain criteria.
You can instruct the ATS system to pick resumes that have skills such as Python and experience of working in the service sector. It will reduce the time and effort that it would have taken to go through all resumes.
If you’re a recruiter looking for ways to match your current talent pool to the right job, LoopCV can automate the hiring process for your business.
Evaluate The Candidates
After you’ve shortlisted some of the candidates for a technical interview based on their resumes, it’s time to evaluate their skills. Using a competence over credentials approach will be beneficial here.
Create a test that represents what the potential fractional CTO will be doing on a regular day at the job. This will help you evaluate their competence as well as skill set.
Find A Cultural Fit
Finally, once the candidate has cleared the technical round, it’s time to have a one-on-one interview with them to see if they’re a good fit for the organization. Since a CTO is in a leadership position, it’s important that they get along with their team as well as management.
Asking questions regarding their problem-solving skills, leadership skills, and time management skills will give you a better understanding of how they will fit into the role and with others at the company.
Ask For References
Since a fractional CTO works in a part-time capacity, it is important for you to ask for references. These can be organizations that they’ve worked in the past, either in a fractional or full-time capacity.
You can also ask for a portfolio of their work, check their LinkedIn profile, and run a background check on them to ensure that you’re hiring a trustworthy person.
Create A Watertight Contract
A fractional CTO isn’t a full-time employee, which means that their services to your business are contractual in nature.
That’s why you need to create an all-encompassing contract whereby all the requirements, roles and responsibilities, monetary compensation, extra benefits, work timings, and other necessary items are listed clearly to avoid any confusion down the road.
Get your contract checked by your legal team or a work advocate so that you don’t miss out on any details and nothing in the legal document is stated vaguely.
Welcome Your Fractional CTO Aboard
After all the formalities are completed and all the legal documents are signed, it’s time to welcome your fractional CTO to your team.
Whether you work in a remote or on-site setting, make sure to introduce everyone on your team to the fractional CTO, help them get started with the work, and handle any queries that they may have.
This will make the onboarding process easier for both you and your new contractor, which can help you achieve positive results faster and help your business grow.
Making The Right Choice
Finding the right fractional CTO can be an arduous task, but the pros of hiring a fractional CTO far outweigh the labor that it requires to find the right CTO.
In order to grow your business and achieve your short and long-term technological goals, it’s important to find someone who’s a technical and cultural match and understands your business requirements.
And at the end of the tunnel, you’ll find someone who will help your business flourish and grow along with the digital evolution!
