With technological requirements becoming increasingly more demanding by the day, having a seasoned tech professional like a CTO on board can make a difference. However, a CTO is an executive-level position, which is an expensive long-term hire, a luxury that many businesses simply can’t afford
If you are a startup or small business looking to hire someone for better technological guidance but don’t have the budget or resources to employ someone full-time, fractional CTO services are for you. Read on to learn more about why you need fractional CTO services for your business.
What is a CTO?
An abbreviation of Chief Technology Officer, a CTO is the technological backbone of any company, providing valuable insight and advice on tech strategy for any struggling company.
Competitors are constantly making use of the latest technologies to better their business, and with the help of a CTO, your company can integrate itself with trending innovations in the tech space. It is an executive position, and the CTO is answerable for multiple responsibilities including tech strategy creation, data compliance, staff training, and budget monitoring.
What are Fractional CTO Services?
As the name suggests, fractional CTO services offer the attention of an experienced seasoned CTO but at a fraction of the price. Fractional CTO services provide the same technological solutions to businesses or organizations that an acting full-time CTO would do but on an on-demand freelance contractual basis.
This is an ideal option for a startup or small business owner who cannot afford a full-time CTO but still need the services they provide. Fractional CTO services are also a great option for businesses that only require the consultation of a CTO for a short project or new endeavor. In this way, they will get the undivided attention of a professional who will focus on the required problem areas in a manner that is both cost-effective and time-saving.
Full-Time CTO vs. Fractional CTO
Although the two may sound similar, there are major differences in the job descriptions, responsibilities, and salaries of a full-time CTO and a fractional CTO. A full-time CTO is a committed professional who is completely in charge of a company’s technological strategy and decision-making. A full-time CTO is involved in every company matter that has to do with the management of tech. Typically, companies that are very large and have elaborate technological requirements have a full-time CTO on board.
A fractional CTO is an employee that is typically recruited on a needs basis by a company. Not all companies require the services of a CTO full-time and thus resort to hiring fractional CTOs on a freelance or contractual basis instead. Startups and small businesses often hire fractional CTOs when they are about to launch a new product or require tech advice. The past decade has seen an influx of tech being used in business, which is something not every company owner is well versed in. Hiring a fractional CTO can be a good commitment that is inexpensive and short-term yet still gets the job done.
Roles and Job Description of a Fractional CTO
The following are some of the responsibilities a fractional CTO will take on. If your business is lacking in any of these departments, consider hiring one for a better future.
- Tech strategy and communication
- Making sure company objectives are enforced
- Executive decision-making and administration on anything technology-related
- Assignment and leadership of a team dedicated to tech solutions
- Creating and overseeing software development, deployment, and operations
- Supervising the design and distribution of technology products
- Establishing a successful security program to ensure the privacy of company data
- Introduction of the use of relevant software for business management
- Keeping a regular check on the maintenance of technology infrastructure
- Enforcing data compliance and security to avoid any breach
- Advising on business negotiations.
- Managing vendor relationships
Benefits of Fractional CTO Services
From cost-effectiveness to immediate availability, there are many benefits of fractional CTO services. Here is a list of some of the reasons why bringing a fractional CTO on board can be so advantageous to your business.
Cost-Effectiveness
The most significant benefit to having a CTO on a fractional basis is the cost-effectiveness of it. A CTO that is hired to work full-time, as a dedicated professional can be very expensive. In fact, according to online sources, the average annual salary for a US-based chief technology officer is $194,006. This is in contrast to fractional CTOs who are typically paid by the hour or for a flat fee ranging from anywhere between $500 to $15000 a month. The duration of time a fractional CTO will provide their services to you will depend on your contract, but it is much less expensive than a full-time position, especially if you are only hiring one short-term.
Short-Term Commitment
One of the best parts about fractional CTO services is that they are freelance. This means that deciding the duration of time that services will be provided is part of your contract and therefore pre-decided. If you only need a CTO to guide you on an upcoming endeavor-say a product launch- then a fractional CTO is your best option. This is an ideal scenario for companies that don’t need the services of a CTO long-term.
Remote and Hybrid Working
After the pandemic, the entire paradigm has shifted in regards to remote and hybrid work models. Many companies and organizations have caught on to the idea that hiring employees remotely can be an option that is both cost-effective and productive. Fractional CTOs work remotely a majority of the time, with many having clients all over the world. With a fractional CTO, you don’t have to worry about catering to the in-office needs of another employee, because their services are just a click away.
External Experience
The freelance nature of a fractional CTO means that they often are working for multiple clients simultaneously from all over the country, if not the world. The experience of managing so many different companies’ technology needs brings an insight that is unmatched by any CTO who has spent years at the same job. This external experience will bring both great knowledge of technology trends and easy identification of deep vulnerabilities. The result is a holistic professional who has laudable business experience.
Immediate Availability
The primary business model of fractional CTO services is that they are immediately available on demand. For any struggling business that needs instant advice on improving the management of its technological requirements, a fractional CTO will be there to facilitate. Sometimes, a business only needs the attention of a CTO for a specific set of projects, in which case fractional CTO services are the best option.
FAQs
How much does a fractional CTO cost?
A fractional CTO can cost anywhere between $100 to $300 on average, with rates depending on multiple factors. CTOs that are more experienced and skilled will be more expensive. Rates can also change depending on the nature of services required by the company. Examples of common services fractional CTOs provide are tech strategy creation, software training and deployment, product launch marketing, and tech consultations.
What are the key performance indicators of a fractional CTO service?
Metrics that can be used to measure the performance of a fractional CTO service are team engagement, employee satisfaction, client retention, return on investment, cash-to-time ratio, and digital availability.