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THE RISE OF THE FRACTIONAL CTO

In startups and growth companies that need a fractional CTO we often find young software visionary founders wearing multiple hats.  Designing and building great software.  Managing a team.  Responsibility for the R&D function.

Boards and company Execs may be experiencing a gap.  As part of corporate control there are expectations about how information is prepared and presented, and how decisions are being made.

What can often happen is that founders focus on the software and not so much on the organization, control and communication aspects that are necessary to succeed.

An increasingly popular option is to appoint a fractional Chief Technology Officer (CTO) to handle aspects of the R&D function that will benefit from experience, while also building future tech leadership capability.

Defining the Fractional CTO value proposition in today’s IT landscape

A fractional CTO is engaged on a part-time and flexible basis to work with software companies and businesses that have a high dependency on technology.  Their role is to set the technology strategy and work with the engineering teams to progress the program of work and keep critical services performing well.

Once the company has grown to a stage that it needs the role on a full-time basis, the fractional CTO helps find the right candidate, hands over responsibility and the engagement wraps up.

The value proposition of a fractional CTO is related to the rate of progress that can be achieved.  In today’s fast-moving IT landscape, a clear direction and proven set of controls will help accelerate progress.

Addressing the growing need for flexible and cost-effective tech leadership, especially for startups and growing businesses

A fractional CTO provides tech leadership during formative and growth stages when there isn’t budget available for a full-time CTO role and it may be difficult attracting candidates.

During the early stages there are key tech decisions being made: including where to focus scarce development resources on building tech vs leveraging open source or third party developers.

What Does a Fractional CTO Do?

Lots of meetings and not much coding! A fractional CTO provides tech leadership, bringing expertise and insights into a decision-making role and helping to define and implement a differentiating tech strategy. The role is part-time and the emphasis is on collaborating to get things done.

Strategic Technology Leadership

Defining and establishing the R&D function is a strategic challenge.  The fractional CTO works with the company executives to understand the requirements for innovation and translate that into capabilities. Organizing how many software engineers are going to be hired and what they will be focusing on as individual contributors is a key area for the fractional CTO to lead, also choosing what to outsource and who to partner with. Another aspect of planning is setting the budget and providing the rationale for operational costs and investment.

Developing and Implementing Long-Term Roadmaps Aligned with Business Goals

The development of a tech roadmap will adopt different terminology depending on context:
  • Product software companies use the terminology of Product Roadmap – in that context the fractional CTO will work with the Chief Product Officer (CPO) or Product Managers to align the technology development with the highest priority product features.  A common contemporary approach is to develop an initial Minimal Viable Product (MVP) and achieve early customer use and feedback.
  • Technology-enabled businesses use the terminology of Digital Strategy – in that context the fractional CTO will work with business leaders to align IT investment, solution implementation and technology development with business goals and priorities.

Overseeing Technology Strategy, Infrastructure, and Application Development

The fractional CTO helps span the different categories of technology and achieve clarity and confidence in the way forward. The infrastructure choices relate to how technology will deployed and how it will scale. The application development choices relate to programming languages and frameworks that will be used by software engineers who are developing core Intellectual Property, as well as the open source and third-party (commercial) software that will be dependencies.

Technical Expertise Across Different Areas

The fractional CTO brings expertise across multiple different areas and keeps abreast of waves of change.

Waves of change – cloud computing, cybersecurity, software development methodologies

Three waves of change provide an illustration of what the fractional CTO needs to be adept at handling:
  • Cloud computing – leveraging ‘as-a-Service’ offerings from the hyperscalers (such as AWS, Microsoft Azure, Google Compute Platform), and building value-adding services on top
  • Cybersecurity – applying proactive risk management principles to identify key assets and design and implement controls that are effective in protecting, defending, detecting and responding to incidents
  • Software development methodologies – driving innovation with teams including iterative (Agile, Scrum, sprint-based) software engineering and DevOps practices

Staying Current with Emerging Technologies and Recommending Their Strategic Application

The fractional CTO will provide guidance on new tech and when to investigate and apply it. A common approach is to allocate limited resources to a R&D ‘spike’ that will last a few weeks and provide a test-and-learn opportunity. A good example of a current area is in the field of generative Artificial Intelligence and Large Language Models (LLMs). A typical initial application may be a chatbot.

Team Management and Collaboration

The fractional CTO guides and supports the existing IT teams and oversees their work.  A key part of the role is to provide timely approvals and decisions to keep things moving along.

Providing Guidance and Mentorship to Existing IT Teams

Guidance relates to direction and focus / priorities.  Mentorship relates to professional development and personal growth.

Overseeing IT Operations and Project Management

The fractional CTO oversees the day-to-day of IT operations and the portfolio of active and planned projects. In the context of Agile and Sprint-based delivery, the fractional CTO will typically attend showcases and receive the feedback for improvement from retrospectives.

Benefits of Hiring a Fractional CTO

The major benefits of hiring a fractional CTO are to achieve clarity on the technology direction and to drive progress on execution.  

Cost-Effectiveness and Scalability

Many startups and growth companies contemplate hiring a fractional CTO due to budget constraints. 

Access to Top-Tier Tech Leadership Without the High Cost of a Full-Time CTO

A fractional CTO engagement costs less than a full-time CTO.  A typical workload would be between 10-15 hours per week. 

Ability to Scale Expertise Up or Down as Your Business Needs Evolve

Instead of being a fixed capacity, the fractional CTO can flex to meet the technology challenges that arise. There is normally some flexibility within an engagement that can vary week-by-week. 

If one-off projects require extra effort this cost can be added to the monthly invoice.  

Accelerating Growth and Innovation

The fractional CTO helps with direction setting and keeping up the pace of progress on execution. 

Drive Technology Innovation and Implement Strategic IT Solutions to Propel Growth

The effectiveness of the R&D activities can be dramatically improved with the injection of energy from a fractional CTO with broad industry experience.  This can be understood as a force multiplier on the the existing tech spend.  

Leverage Experience to Avoid Costly Tech Mistakes

With an experienced fractional CTO providing tech leadership on demand, there is an opportunity to learn the easy way, rather than by failures and costly tech mistakes. 

Filling Leadership Gaps and Providing Objectivity

Fractional CTOs help fill leadership gaps and provide fresh outside perspectives.

Bridge the Gap Between Execs and Their Tech Teams

There are lots of different ways that gaps can open up, depending on the situation:

  • As noted in the introduction, a young software visionary founder may be focused on the software but pay less attention to organization, communication and control
  • A business-oriented Exec team may have difficulty engaging directly with tech teams

A fractional CTO can be viewed as light-weight organizational middleware that keeps the Execs and the tech teams integrated. 

Offer Fresh Perspectives and Strategic Direction for IT Initiatives

Because the fractional CTO has a wealth of experience outside, and maintains other concurrent engagements, they bring objectivity and fresh perspectives to the role. 

Who Can Benefit From a Fractional CTO?

A fractional CTO is particularly beneficial for early-stage software companies that are investing and building tech but aren’t yet ready to commit limited budgets to hiring a full-time CTO.  

Start-ups and Early-Stage Businesses

Early-stage software companies benefit by gaining the experience of a fractional CTO to help shape the future, prioritize efforts and guide tech teams as they execute.

Businesses Undergoing Digital Transformation

Business that are investing heaving in tech and disrupting the status quo with a digital transformation agenda can benefit from a fractional CTO.    

Organizations Needing Interim Tech Leadership

Larger companies may find themselves without a CTO for a period of time due to executive transitions or reorgs.  The fractional CTO can fill the role on an interim basis.  

How To Find the Right Fractional CTO

Finding the right fractional CTO begins with understanding your needs and considering what sort of profile and experience you are after. 

Many providers offer a low-risk initial engagement period (e.g. 1 month) to ensure cultural fit and compatibility.  During this stage you should look for a collaborative style, check that fractional CTO availability meets your expectations and seek 360 degree feedback from your team before proceeding to a longer-term commitment.