Why Every SME Business needs A CTO, Just without the exec pay

Despite what some in the technology industry may tell you, not every SME needs an internal exec in charge of technology.

Your business may not have the ability or requirement to exceed in technology within your category. Likewise, maybe you already have a team, but they could do with an in-partial mentor, guide or sounding board to bounce ideas off.

Having said this, many large "non-tech" manufacturers have been hiring CTO-level talent for some time now: such as the former Apple and HP exec Eric Chaniot's 2015 appointment at the Tyre industry behemoth Michelin, or Juan Jose Delgado, ex-head of Amazon Europe hired by the brewery giant Estrella Galicia in 2017.

What is appropriate for an SME? Can you have the best of both worlds, the talent without the exec compensation package, at your level of growth? We say you can!

Digital first world

As a result of the Covid shutdown, whole market routes have been turned upside down. Businesses like Lindt Chocolatiers were forced to open an online shop in 5 days to maintain trading.

Having someone on hand who deeply understands technical requirements and has extensive business acumen is invaluable in your ability to be nimble and reactive. Access to crucial expertise in a digital world is more important now than ever and is essential for continued growth and trading as we move further into the online world. Business and Tech go hand in hand in this kind of reactive pivot; one without the other would be like going to war with plenty of armour but with no weapons in the armoury.

“Easy I’ll just hire someone”, Tech Industry Recruitment

The problem with simply hiring is that Tech talent is still in short supply. You don't want to hire senior positions or CTO talent in a rush; it may even have equity implications. How do you know the CTO you just hired is not a Senior Developer without the business acumen, or the opposite, a former IT Project Manager that does not know the technology well enough to know what new business opportunities are possible or the foresight to see what is coming up?

Some SME organisations and start-ups have already started embracing tech bootcamps to fill tech recruitment challenges at a junior level, choosing to employ less experienced staff and mentor on the job. Although perfectly valid, the problem with that strategy is that it leaves a massive gap in technical strategy and thought leadership if it is not backed by a comprehensive mentorship program at the CTO level and down. Furthermore, without a technical strategy, the work will mount in inefficiencies, potentially overwhelming the team and leading to a financial crisis with profound financial implications.

The Difference Between a CTO, CIO and IT Director

For those outside of tech, it can be confusing to understand the difference between the CTO (Chief Technology Officer), CIO (Chief Information Officer) and IT Director, but they could not be any more different. Don't believe us? We'll leave this Times article over here for further reading.

Many growing medium-sized companies do not recognise the difference between the roles, which results in a merging of roles akin to a jack of all trades and a master of none. So here is how we define it.

IT Director:

The IT Director, the head of IT's primary role is to oversee the daily tasks and operations of the wider IT team. In other words, the IT Director is responsible for keeping systems up and running, including oversight of support services, staff management, IT asset lifecycle management, and likely some project management. The IT Director would usually report to the CIO.

CIO:

Meanwhile, the CIO, who typically reports to the CEO, is responsible for the strategic technology planning for the internal facing organisation. The CIO develops and improves strategic planning, process, and procedure related to the organisation’s technology. In addition, the CIO would likely participate in new technology initiatives resulting from business activities such as mergers and acquisitions and evaluates their impact on the business.

CTO:

The CTO, or sometimes the Chief Data Officer (CDO), is traditionally an exec-level position reporting to the CEO. The CTO role arose from technology companies requiring an external face to the company’s products they market and sell. They are usually a highly skilled technologists with business and technology acumen. They will have the insight and foresight to direct the development of business defining new product development, or help transform existing services to meet the demands of a digital-first world.

This definition has broadened recently, as we have alluded to earlier in the case of Michelin and Estrella Galicia, to include all transformation activity where technology can be utilised for business advantage.

The CTO is as different from the CIO as the Marshal of the Royal Air Force is to the Admiral of the fleet in the Royal Navy.

A Fractional CTO - How we can help Businesses that need a CTO's insight without the full time exec

To help, we are introducing a new service: “CTO-as-a-Service” (CTOaaS), sometimes also called a fractional CTO. This service allows us to act as a sounding board providing impartial advice, challenging your thinking and helping develop your strategy. We can introduce the correct people to help, as well as research and provide guidance. In addition, we can introduce and implement key technology and get down and dirty in the tech detail where necessary.

A good CTO has a foot in both Business and Technology. So while helping your Exec team navigate business growth planning, team structure and risk management strategies for data loss prevention, we also have the skills and experience to deep dive with your technical team. We can talk them through the practicalities of DevOps culture, the merits and downfalls of micro-service architecture, implementation strategies of Cloud first development, software testing and more.

I need a little more help than that

If a greater level of help is required, we offer a weekly mentorship service offering a higher level of implant in your organisation customised to your needs. This could be from 1 day per week to a complete five-day implant.

Why Code Tonic

We are proud to say we own other product businesses and fully grasp business outcomes in our recommendations. If we make a recommendation, we have probably already experimented with it in our business. Our consultants are hands-on and understand the detail while experienced enough to have strategic business oversight – skills that are rare in tech.

We have worked with three-person companies in the events industry, to SMEs in FinTech, all the way up to developing cutting-edge mobile commerce applications for multinational manufacturers in their far east markets.