Outsourced CTO - Is It Worth It? What Can You Gain?

Introduction

As an executive, the Chief Technology Officer (CTO) plays a pivotal role within an organization, serving as a dedicated full-time professional. However, with the trend of omnipresent outsourcing, a fundamental question is - can an outsourced CTO work efficiently as a decent and safe solution?

Who is an outsourced CTO?

In modern startups and IT-related firms, the Chief Technology Officer (CTO) is a vital figure. They're the ones who plan, strategize, and communicate key tech decisions, typically being a crucial part of the top management team.

While top CTOs may not experience the same level of household recognition as figures like Elon Musk or Jeff Bezos, their impact is undoubtedly profound. Companies in the tech realm, including giants like Uber, Snapchat, HubSpot, Amazon, and countless others, owe a significant portion of their success to the strategic brilliance of their CTOs.

So, what are the typical responsibilities in the role of a Chief Executive Officer?

• managing technology infrastructure
• guiding software development teams
• leading software development life cycle
• overseeing the company's technologies and tools
• establishing and managing relationships with tech partners
• running due diligence operations
• analyzing business and clients' needs
• developing long-term technology strategies
• planning technical development and investments
• outlining strategies and approaches according to business goals
• identifying cybersecurity threats and developing data security strategies
• complying with existing regulations.

Can you outsource CTO?

Technically, a Chief Technology Officer can work part-time, full-time, or on an hourly basis, allowing extra flexibility. However, considering the CTO's responsibilities and role, a full-time commitment is often necessary. So: can you actually benefit from working with an outsourced CTO, who is not a part of your company on a daily basis?

A short answer is: yes, you can.

In the era of trending IT outsourcing, using CTO as a Service is also expanding, indeed. It is applicable mostly to midsized companies that don't require a permanent CTO position, but still wish to benefit from leadership, technical expertise, and supervision over software development cycles or software development teams. This model aligns well with their needs and offers a cost-efficient alternative to hiring a full-time expert.

However, although there are numerous companies that already benefit from working with an outsourced CTO, the question is: does this model align with YOUR specific requirements and objectives?

Pros of a CTO outsourcing

CTO outsourcing undoubtedly comes with a number of benefits for the company:

• Cost savings. Hiring an outsourced CTO is typically more cost-effective than employing a full-time executive. In the CTO as a Service model, you pay only for the services you need. It also comes with great scalability as you can easily reduce or increase engaged resources anytime.
• Diverse expertise. An outsourced CTO usually has experience across various industries and technologies, providing the company and startups with a broad set of skills and competencies.
• Flexibility. You can hire an outsourced CTO on a part-time or project-specific basis, which allows you great flexibility and access to the expertise you need on a minimum budget.
• Innovation. Outsourced CTOs often introduce fresh ideas and innovative approaches to technical challenges, promoting and driving creativity within the organization. They can also provide an unbiased point of view and identify issues that can be overlooked internally.
• Knowledge transfer. Hiring an outsourced CTO can increase the skills of your internal team in terms of software development, IT management, applying technologies, and leadership.
• Efficiency. An outsourced CTO can streamline and improve your technology operations, aligning them with your business objectives and promoting growth.
• Access to professional network. Outsourced CTOs often have extensive networks in both tech and business areas that can be leveraged for partnerships, collaborations, and finding the right talents, which reduces HR-related risks and workload.

Cons of a CTO outsourcing

On the other hand, CTO outsourcing also comes with a set of drawbacks such as:

• Limited on-site presence. An outsourced CTO may not be physically present within the company, which can lead to challenges in understanding the organization's culture and dynamics. They may also face difficulties with getting familiar with your specific business processes, goals, and challenges.
• Communication barriers. Remote collaboration can sometimes result in communication challenges, which may affect project management and team integration. An external CTO may not maintain as close relationships with your team members as an in-house counterpart would do, making it challenging to resolve issues or conflicts.
• Security concerns. Outsourcing can raise concerns about data security and confidentiality, especially if sensitive information is involved.
• Dependency risk. Overreliance on an outsourced CTO for critical technology decisions can lead to dependency issues and potential difficulties if the partnership ends. Outsourcing may also result in less control over the CTO's work and priorities, potentially affecting the alignment with your business goals.
• Commitment issues. Finding a CTO who will be committed to your project fully and enter it with a decent amount of passion, interest, and dedication might be challenging. Your project may not be a priority for an outsourced CTO unless really big money and remuneration come into play.

How to hire an outsourced CTO?

So, how to make sure that your outsourced CTO will be a good fit for your company? Let's delve into the essential expertise to seek when evaluating potential candidates. What key professional attributes should you prioritize in your search for a CTO?

• Leadership skills. As a CTO is a crucial part of your top management who takes over the responsibility for the development of a key area of your company, someone having a vision and charisma is simply a must.
• Experience. A Chief Technology Officer should boast a proven track record of accomplishments and a technical background, validating their qualifications and competence in the field.
• Ambition. Ambition is the fuel for growth. An executive, including a CTO, needs the determination to drive your company forward.
• Managing people. A CTO must be a person with the ability to hire and manage teams and guide them through projects with a dose of technical expertise and a human approach.
• Product sense. Beyond implementation skills, a CTO should possess the ability to select strategic projects, craft products from scratch, and be able to make the right software development and business decisions. This includes the capacity to lead and guide product development teams while adeptly identifying potential risks.
• Problem-solving and decision-making skills. The outsourced CTO role demands exceptional problem-solving and decision-making capabilities, as it often comes along with making immediate and complex decisions to address emergent issues. The individual should be aware that they're in charge and that their role is to lead and decide, not only advise.
• Imagination and innovative thinking. A CTO should take the initiative to generate new ideas and perspectives, especially in the early stages of startups, where many potentially viable business ideas have been probed. A proficient CTO's value lies in their ability to conceive novel solutions, continuously seeking opportunities to create something innovative and valuable.
• Committment. Last but not least, try to find an individual fully committed to your project. Regardless of your requirement for a full-time or part-time hire, they should bring dedication and the wealth of benefits you seek from an outsourced CTO.

On the other hand, hiring a good CTO based on having an idea about a certain product, project or need will not be easy. Research, learning, looking at the competition, validating the idea, talking to different people, building prototypes and mockups, and offering a stake in the company’s future may help convince them to join your team. Then, before you go on a hunt, make sure your idea is thoroughly prepared and compelling enough to attract your target.

How to find an outsourced CTO?

With all of the above in mind, we assume you do want to try out hiring an outsourced CTO. But how and where to find the right professional?

There’s actually a niche for CTO outsourcing on the market with services like ctooutsourcing.com, outsourcedcto.co.za, and lots of other companies and individuals working to help non-technical people grow their businesses. However, hiring for a CTO position requires opting for safer options. One of them is reaching out to outsourcing companies offering CTO as a Service model.

Would you like to try CTO as a Service? Or maybe you're already looking for an experienced outsourced CTO who would manage your software development team and software developers? Don't hesitate to contact us. We have years of experience offering "CTO as a Service" and working with professionals who can provide you with top-notch IT advice and confidently act as your Head of IT within this framework.