Innovative businesses realise that in a fast-changing market, where the demand for intelligent technology is essential for high-growth companies, investment alone is not enough.
Without delivering an integrated digital ecosystem and the change management to support it, digital transformation programmes will not realise their true potential.
To succeed, organisations need multifaceted individuals who are equal parts IT experts, skilled communicators and visionaries. That individual is the CTO. But how will you know when the time has come to appoint one?
What a CTO can bring to the table
In large part, the decision to appoint a CTO comes down to where a firm is on its journey to digital transformation.
Working with ambitious businesses in most sectors, we know how they have delivered efficiency and growth by supporting investment and technology implementation.
Historically, the first phase of tech investment is delivered by internal teams led by an IT manager who often reports to a CFO. But to successfully pivot from implementing IT projects to creating a vision for digital transformation, you’ll require the strategic view provided by a CTO.
A CTO is typically responsible for a company’s technological needs, research and development. They’re usually digital business leaders, passionate about technology and keen to stay on top of current trends. They evaluate a company’s short and long-term needs, use its capital to make fruitful investments and watch for disruptive competitors.
Moreover, the right person in the role will enable your organisation to be better positioned to answer questions like:
“What role will technology play in delivering the business strategy in the next 5-10 years?”; or “How could Artificial Intelligence or machine learning reduce costs to serve, differentiate new products and services, or increase profitability?”
Hiring a CTO is, therefore, pivotal to the growth and maturity of a company – and this is no longer confined to specific sectors such as fintech innovators. But it is crucial to understand what they will bring to the table and when – not least because the salary a top CTO can command will be well into six figures.
Many start-ups take on a CTO in the early stages of their development if they have a defined vision and long-term plan. More established businesses, however, may prefer to wait until they have a transformation strategy and investment in place.
Creating a comprehensive digital strategy is recommended to fully understand the current and target states of your business and determine whether you need a CTO.
With a clear vision for your product and business, you will understand what type of CTO you need, what they can do for you, what to expect – and when to appoint one.
A solid digital strategy will define where you want to get to and how you intend to pick off the low-hanging fruit, industrialise operating strengths and maximise growth. It should be a living document that reacts to business priorities, helps shape the future team, advises on budgeting, and engages stakeholders.
Broadly speaking, firms can follow a robust framework carved into three phases:
Diagnostic
Pinpointing the current state of the business and defining strategic objectives and priorities
Strategy
Gap analysis of operations and desired outcomes; proposed projects, defined in a roadmap
Implementation
Delivery of the roadmap projects; aligned with co-ordinated, ongoing reviews and updated resourcing requirements
When your firm has a clear brief in the form of a digital strategy, you can tell when it’s time to deliver your vision and implement associated operational change successfully.
In our experience, the CTO’s role in leading a digital transformation programme at this juncture cannot be overstated.
Once you’ve identified a need for change and defined a clear direction, filling this position results in more stable and sustained programme delivery. It is, of course, possible to find a good CTO for the going rate mentioned earlier. If this is not an option, there are effective alternatives. For instance, we have seen effective CTOs promoted from other senior roles, like solution architects, development team leads, or CIOs.
With digital becoming central to success for many businesses, CTOs are becoming an increasingly important hire, thanks to their unique mix of technical competency and business savvy.
We recognise that the decisions involved in digital transformation are often as complex as they are wide-ranging. Putting a CTO in charge of delivering fundamental change to your business can feel daunting, but it doesn’t need to be. By building a robust strategy and a detailed transformation roadmap, you can plan when and how to introduce the CTO’s invaluable skills to your business.