Fractional CTO for a Startup: How It Works
CTO stands for the Chief Technology Officer, a C-level business executive. It is a vital role for almost any type of business, especially in the modern days.
However, not every company can or needs to have a full-time CTO, and fractional CTO services are on the rise.
In this article, you’ll learn who a fractional CTO is, what such a professional can do for a business in terms of roles and responsibilities, and how to find a suitable expert.
Who Is a Fractional CTO
The merger of digital technologies leads to Industry 4.0, also known as the next industrial revolution. Every business has a digital presence now, whether reaching customers or increasing team collaboration.
The role of IT was always a critical one, but nowadays, it is impossible to function without it. That’s why CTO plays such an important role in any organization.
31% of businesses said that technology is their number one priority in the Gartner report. The same study shows that 56% of CEOs claim digital interventions improved their bottom lines.
CTO is an expert responsible for the technical landscape of the company’s vision and mission. Such professionals bring their expertise to achieve business goals, increase productivity, and transform internal and external operations.
But hiring a full-time CTO is extremely expensive and challenging. And for companies that do not have tech at the core, it is often unnecessary. The average fractional CTO cost is much lower and offers the same level of expertise.
A fractional CTO is a C-level professional that works with a company on a fraction of the responsibilities or areas of expertise agreed upon before. So, in case you do not need a full-time CTO, you can find a fractional CTO that will execute only vital functions for a fraction of the budget.
Such experts usually work one day per week with a company, which is enough to fulfill the said responsibilities.
What can companies that offer fractional CTO services do for a business? For example:
- Evaluate internal processes, find gaps, and help hire professionals to fill them in;
- Create an authentic technology strategy that aligns with the business strategy;
- Evaluate the current technology environment and propose the areas that can be bettered or transformed. Implement new solutions, frameworks, or environments for better productivity, and increased ROI;
- Take care of cyber security;
- Help in the development of a specific product.
It is a perfect solution for a startup CTO position, mid-sized business, or large company that doesn’t need a full-time expert.
Cases When a Company Needs Fractional CTO/CPO
Now, let’s discuss particular situations when companies might need fractional CTO services.
● You want to save money but bring business to a new level. Average fractional CTO rates are also relatively high, but because you hire virtual CTO for a limited time and functionality, it is significantly cheaper than opting for a full-time employee. This is especially vital for organizations that do not have enough funds for such a visionary to hire fully.
● You have a product to develop, but your devs lack correct guidance. Senior IT professional or Team Leader does not have the same level of expertise when it comes to guiding the development of a product. Fractional CTO, on the other hand, can take all responsibilities of strategizing, road mapping, guiding, and releasing any type of tech product you need.
● You are looking to optimize internal efficiencies. Digital technologies are always in development, and frameworks and environments that were efficient previously might not be the best today. Hiring a fractional CTO allows digitally transforming internal processes for increased efficiency. It can include DevOps, Agile methodologies’, creation of CI/CD, or other highly-collaborative and responsive environments that boost productivity.
● You’re working on a specific project that requires insight from a seasoned tech executive. For example, technology is not the core of your business, yet you are working on a new eCommerce platform for your products. And you need an advanced expert to help with this project in terms of technical vision, coaching, and guidance.
● When you are looking to innovate or disrupt your industry. High-level tech competencies allow implementing cutting-edge technologies, creating competitive products, and boosting the overall company’s performance. It can be something that will help a business to stand out.
● When in need of a visionary plan, matching the long-term goals. Having a technology strategy is a must for any organization. A startup fractional CTO helps to make such services available even for beginners and SMEs.
Interim CTO vs Fractional CTO vs Part Time CTO
There are three models of accessing CTO services that all save costs and help to transform businesses digitally. Often they are mistakenly used as interchangeable terms. Yet, every one of them has its specifics and limitations.
Fractional CTO is responsible for specific areas of requirements. So such an expert is responsible for a fraction of CTO duties. Other ones are shared with in-house professionals.
A part-time CTO refers to an expert that takes all responsibilities of this role but works only for a part of the time, for example, a couple of days a week.
The interim Chief Technology Officer is a transitional expert a company hires between finding a full-time expert. For example, an organization lets go of a previous C-level technology executive and wants someone to oversee responsibilities while looking for a new one.
Here is a comparison table of these three models to showcase the differences even further:
Benefits of Hiring a Fractional CTO
Fractional CTO services to offer a wide range of benefits for businesses of all sizes and industries, such as:
- Saving costs on hiring a full-time expert;
- Getting a technology strategy aligned with business goals;
- High-quality development of tech products or services;
- Getting a full evaluation of the technological environment, its efficiency, possible gaps, and advanced that can be made;
- Accessing outside perspective on the modern technological landscape and what can be implemented in the company’s operations;
- Immediate expertise based on many years of working in the industry. It saves a lot of time than looking for a permanent in-house professional.
It is all about experience, cross-domain knowledge, technology ROI, and availability. And being an outsider also has its pros as such professionals are less likely to be involved in internal politics.
Fractional CTO Responsibilities
The exact responsibilities may vary based on what the company and expert agree on. A fractional CTO takes care of the fraction of areas a Chief Technology Officer is usually involved in. But generally, those responsibilities lie in the following range:
- Developing technology strategy concerning the business core and goals;
- Promotion and implementation of the relevant technology for efficiency and better productivity;
- Participating in executive decisions regarding technology leadership and management;
- Designing and guiding software development, whether it is a stand-alone project, operational methodology, or a new service;
- Creating road maps and plans regarding technology;
- Implementation and maintenance of cyber security measures;
- Developing technology through SDLC;
- Involvement in project and vendor management.
This role is not about coding but about the provision of exclusive technology visionary and strategizing to optimize the company’s processes and operations.
IT Fractional CTO Resume Sample
Fractional CTO Salary Worldwide
It is no secret that salaries differ from country to country, which makes outsourcing an incredibly profitable venture. By hiring an expert in other countries, a business can dramatically cut the fractional CTO cost while enjoying all the benefits of such cooperation.
Here is a comparison of monthly salary rates for fractional CTO in 5 different countries to illustrate the point.
*Ukrainian salaries are provided based on Mobilunity’s Recruitment Team research on the local job markets. All salaries are net and do not include the service fee (in case of hiring on a dedicated team model). The salaries are provided for comparison purposes and could be not entirely accurate. Contact us to know the exact cost of hiring a developer corresponding to the required parameters.
Fractional CTO FAQ:
Mobilunity is Your Partner in Finding Fractional CTO in Ukraine
Mobilunity is a Ukrainian IT company that offers professional fractional CTO services for clients all over the world. We have more than a decade of experience and a lot of satisfied international partners, such as i-doit (Germany), XPLG (Israel), Zenchef (France), Paidy (Japan), and Esurance (Switzerland).
Esurance is a Swiss InsurTech company that partnered with Mobilunity to successfully find a remote CTO in Ukraine. Here are the highlights of this case: