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Fractional CTO: Roles and Why Business Need It

27.10.2021

What is CTO as a service (CaaS)?

The CTO role for every company, especially startups, is one of the most important. The recipe for success for growing companies that offer any kind of information technology service lies in the quality of provided services. And it is the CTO who holds the highest technology executive role, mentors tech departments, prepares tech strategy, and more and more.

CTO as a service or CaaS is a type of collaboration between out-house CTO and organization. CaaS allows businesses to include third-party consultants and managers in development processes.

Such a form of collaboration is preferable for a number of advantages like cost-effectiveness, flexibility, goals, and achievements. Below we have considered more cases of virtual CTO hiring and its advantages over hiring a CTO as a part of your company.

Types of virtual CTO services

There are a few types of CaaS services. The biggest differences between each of them are based on time-spending and areas of responsibility. So, due to the specific business needs, customers can choose the best and profitable option. If you have an imprecise requirement for the virtual CTO – get free consulting from our specialists.

So let’s determine the main types of CaaS and what is CTO virtual services:

Full-time CTO services

The full-time remote CTO is a good option for companies that have a big pool of operating tasks that need permanent control. Also, this type of collaboration is great if your company wants to add fully new technologies or change strategy, or do other large-scale technical things. Roughly speaking if your company needs to solve the questions in real-time, close a wide pool of tasks, or change tech things at all – the full-time remote CTO is your option.
And as an advantage CaaS allows companies to choose candidates from a wide talent pool worldwide, to find the best matching candidates. As an option for the perfect CaaS solution, you would need to know what is nearshore development and how it works.

Fractional CTO services

The fractional CTO services are the more limited type of collaboration. Such an option assumes that the CTO is focused only on the agreed directions or tasks and shares responsibility with the in-house team as well. For example, companies are hiring a fractional CTO to develop a new software product, create a new strategy, or R&D of features.
This is a great option for businesses that have no need for a full-time CTO or need a high-level specialist to manage specific tech tasks. Also, with the support of a fractional CTO, you can avoid the bottleneck situation when the biggest part of all technical processes is managed by the unique employee.

Part-time CTO services

Part-time CTO is a hybrid model between previous options. On one side the virtual CTO is fully included in all company’s processes, on another side, the contractor spends fixed hours per day or month. This model is a great fit for businesses with an existing technical team that needs a more experienced view.

CTO-adviser or CTO consultant

In comparison with previous types of models, this one can be targeted only on solving specific issues. For example, if you are on the stage of idea generation, or need to prepare the technical requirements, a CTO-advisor is someone who can help you.

But this contractor works on different projects, and wouldn’t be dedicated only to your project. This is just a technical person, without orienting and submerging at your business goals. CTO consulting service helps translate business requirements to the technical team, gives you a hint, and assists with urgent questions.

Interim CTO

The interim chief technology officer is a solution for the unexpectedly formed bottleneck. If you are faced with a situation of replacing the current CTO in a few days, but still don’t have an appropriate candidate, an interim CTO is a solution. This contractor can support all processes and assist with new CTO hiring.

Pros and cons of CaaS with Outstaffing Companies

Suppose you have already decided to hire a virtual CTO. There are different ways for this. One of the appropriate options is IT-Staffing companies that target dedicated team creating.

The main advantages of cooperating with such companies are:

Accesses to the wide talent pool
Outstaffing companies have access to a huge number of candidates. Thanks to their experience they can recommend a shortlist of perfect candidates just for your project, with the appropriate experience.
Cost-effectiveness.
There is no need to spend money on bonuses, permanent salaries reviews, labor taxes, and other expenses. With the CaaS model businesses reduce the expenses and pay only for completed tasks.
Flexible work model.
You can choose time-material, full-time fractional, or another model which will fit just your needs.

There are some disadvantages. Few points you should put your attention to:

Quality of NDA
You should be confident that you signed the thoughtful NDA. CTO is an important role and included in the big part not only technical but business questions
Time wasting for the onboarding period.
You need to lay the time for the onboarding period to dive CTO at your processes.

Main cases of CaaS usage. Who can hire a virtual CTO for a project?

We described above the main types of CaaS, their pros, and their cons. Let’s consider the typical cases you can solve with the virtual CTO

Case 1. The company needs a technical specialist to control the team and code quality.

The quality of the code, its relevance, and roadmap fulfillment are the three whales on which the technical component of the project keeps. The CTO fully manages the whole development department also when it concerns hiring remote developers. Also, he or she is included in the global strategic planning which allows creating plans for the tech teams for the next quarters with KPI, metrics, and requirements. This case CTO is a fully included part of the team.

Case 2. You want to check the quality of the already developed solution.

There is a common case where a group of enthusiasts created some software, full version, or MVP. Due to its quality or market needs, there is already an existing group of customers and there is a wide sector of potential clients. To obtain more customers and endure a high load, some parts of the application should be redesigned.
CTO, in this case, can find stumbling blocks for future product growth or offer up-to-date technologies. Unlike less experienced colleagues, CTO will include in the plan possible costs, markets tech strategies, and own vision.

Case 3. If you need to create a robust development plan

Good planning is the start of success. The CTO’s experience will be very useful at the first stages of product development, namely with roadmaps preparation, technology choosing, product budgeting. Moreover, a virtual CTO can assist with team hiring and process development. All these components assist businesses to build plans with clear estimates.

Case 4. You don’t want to hire a full-time CTO due to the low load for this role.

Very simple and common case, when you have a strong already developed product, our strong technical team. This way you need CTO services in the form of consultations, or to close some periodical tasks. In such a case you might choose a freelancing platform to find a consultant. Explore how Toptal works.

What qualities should are you looking for in a Virtual CTO?

So, you’ve decided which model of cooperation suits you, and understand the pool of duties for remote CTO. How to choose the right candidate? What should you pay attention to?

Strong technical background. A very obvious point. We will not dwell on it for a long time. The wide experience with different technologies and a deep understanding of all development stages will help to build the correct processes and deal with or prevent the complex technical challenges that your company might face. Typically the great candidate for this position has at least 6 years of development and a leading position in the past. This experience is able to help with the development of hard and soft skills.
Great communication skills. CTO is often included in different communications: with the team, clients, investors, C-level associates, so on. As a leader of the technical team CTO must have strong management skills including being ready to solve issues, motivating, and explaining. There is no way to build strong interior processes without great communication.
Decision making. Making decisions and being responsible for them is one of the most important marks of a good manager. Ask your candidate about previous situations that required you to make a decision, about the existing alternatives at that moment. This case will show you what facts he operates on at such moments.
Strategic skills. The CTO is the role that is foreseen to be a strategist. The candidate should be experienced in strategy development and be able to dive not only into technical processes but into businesses too. By nature, CTO’s are looking at the full picture and can develop a plan that will lead the company in the right direction. To be a good strategist CTO should develop different skills like reasoning, emotional intelligence, creativity, and much more.
Time-management skills. CTO included the biggest part of companies processes. To do all things really well he or she should have excellent time-management skills. Without this skill, your business will be faced with missed deadlines, inefficient workflows, and unwanted stress. Feel free to ask your candidate how he handles multitasking flow, what tools or strategy use.

How Much Does CTO-as-a-Service Cost?

The CTO salary is one of the highest in the IT sector. Due to the Payscale, in the USA, it can reach from $90k to $240K per year. Of course, this figure depends on different factors: skillset, number of certificates, experience. One of the main factors that impact CTO salary is location. An example, due to the Payscale the middle yearly salary for CTO in Ukraine will be around $63K and $90K in France. Below you can find the detailed chart with salaries. The fractional CTO rates will be different due to the less load.

average-salary-cto-worldwide

Fractional CTO: Roles and Why Business Need It

What is CTO as a service (CaaS)?