As you grow your business or pursue your digital transformation initiative, you’ll need to add a few more chairs to the leadership table to support your new needs.
Especially when it comes to technology it can be hard to know what you need — do you need a CIO? A CTO? A director of IT?
At the end of the day, you need someone who can leverage technology to support your business strategy. Whoever you hire should be able to think holistically about the business as well as specifically about the technical logistics of digital tools.
For most business leaders, thinking about technology, digital transformation, and IT in the correct way can be the biggest challenge. By explaining a few disciplines within the digital technology space, you can get a better idea of what to expect from your IT strategy.
CTO: Chief Technology Officer
Generally speaking, CTOs focus on more customer-facing technologies.
Their goal is to improve your product or offering, whether by improving the product itself or by improving the buying, ordering, and delivery experience around the product. Though customer-facing, these efforts must be connected and informed by the greater business strategy and competitive advantage.
The technology implemented by the CTO should support a specific competitive advantage.
For instance, when Domino’s pizza started its digital transformation in 2008, the bulk of its technology investments supported the convenience of ordering and delivery, because that’s the advantage Domino’s competes on.
It would have been a miss if Domino’s had focused its technology on making Michelin Star-quality pizzas, because Domino’s knew its customers weren’t buying Domino’s for quality.
Domino’s developed tools for engaging with customers digitally with its online order tracker, mobile app, and ordering integrations across new digital channels and platforms. Additionally, Domino’s built an internal GPS system for its delivery drivers. These tools fall squarely within the CTO realm.
CTOs have a very technical skillset. It’s common for a CTO to have a background in software development or engineering. Appropriately, CTOs are responsible for managing the developers, vendors, and engineers who build new customer-facing technologies and perform research and development. CTOs may consult several departments to learn more about the customer experience and how customers are interacting with the business and prodUct.
Success for CTOs lies in the top line. CTOs constantly think about how to tap into new markets or out-maneuver the competition to increase sales. They also track the performance of the internal development team, usually by how quickly they can build and implement a new feature.
CIO: Chief Information Officer
CIO focus on internal processes, including IT.
Anything that falls into the realm of managed IT is the responsibility of the CIO. This includes cybersecurity, regulatory compliance, reporting, automation, data storage, CRMs, ERPs, to name a few. At its core, the CIO’s job is to manage and optimize the tech infrastructure that the business needs to operate.
For example, Vudu Consulting an IT strategy and consulting firm based in Oklahoma City, helped a client in the oil and gas industry move from a weekly reporting interval to hourly interval. Access to real-time information helped Vudu’s client lower the cost of a barrel of oil from $36 to $6. This type of project would fall to a CIO role.
The CIO is also responsible for the business’s IT strategy, that is, how the business uses technology to empower each individual business unit from finance to legal to HR. The IT strategy provides a framework for measuring the performance of individual business units and the business as a whole.
Your CIO implements processes for managing your company’s data and gleaning actionable insights from that data that result in more streamlined processes and lower costs. Usually, these efforts alone are enough to achieve a digital transformation that revolutionizes a business.
CIOs may have a less technical skillset. A CIO may have a background in computer science or IT management, but they must be good project managers and good communicators in order to facilitate cohesion across several departments. The CIO looks at the big picture to prioritize IT initiatives and make sure all internal systems work together coherently. The CIO manages the different IT groups working to sustain your digital infrastructure.
Success for CIOs lies in the bottom line. The ultimate goal of a CIO is to maximize the ROI on its systematic investments. Their work can help increase the efficiency of the business’s workflow and give business unit leaders and C-suite executives better information with which to make decisions. They make it easier for team members at all levels to achieve maximum productivity.
Which one do you need for your digital transformation?
Whether you need a CTO or CIO depends on your digital transformation goals. One sure way to fail in your digital transformation initiative is to expect your IT team to do everything. If you don’t have a clear, concise business strategy in place, you may want to create one before making such an important hire.
If you do have a clear, concise business strategy, what problems do you expect your CIO or CTO to solve? What challenges does your business face? What does digital transformation mean for your business, specifically?
You probably need a CIO if:
- You want to optimize your internal process, workflows, and infrastructure, or if your goal is to meet compliance requirements by your industry.
- The value driver is access to data, automation, and reporting, then a CIO may be more helpful.
You probably need a CTO if:
- You’re looking to enhance the customer experience by creating new digital products or offerings.
- The value drivers in your company sit within the product you offer your customers and how you offer it to them, a CTO may align with your needs.
Of course, if your business has value drivers that fall in each camp, you may need both. The data and insights typically provided by a CIO may inform what type of products the CTO should create. When the CTO launches a new product, the CIO will help structure internal processes to support that new product.
If hiring two new C-suite-level executives is cost-prohibitive, you could consider using an IT Consultant to advise you on how to meet your immediate needs and discern how to prioritize in-house hiring.
Many companies combine these roles, even bestowing a combined title of CITO. It’s true that the line between customer-facing innovations and internal processes can be blurred, and your business model may allow one person to straddle both positions. However, you should be realistic in how much you expect one person to accomplish, and you should equip them with the budget, staffing, and trust they need to fulfill both roles successfully.
You may have noticed the proliferation of new technology roles in the business world — like Chief Digital Information Officer, Chief Security Officer, Chief Digital Technology Officer. As technology becomes more and more of a strategic necessity for businesses, the more splinter roles will appear to accommodate the widening scope of digital. At the same time, these leaders will more and more have to work laterally to support the business and IT strategies.
Alignment above all
At thE end of the day, you make a hiring decision to meet the needs of your business. No matter what role you end up hiring for, there are a few key qualities you should expect from a worthy candidate.
- Your candidate should have a mind for business strategy beyond their niche, specialty, or department.
- Your candidate should be a good communicator who works to understand other business units and can help assist with the change management process that comes with any digital transformation.
- Your candidate should have the organizational and project management skills to scope and execute a project effectively.
- Your candidate should have the acumen and professionalism to provide value at the leadership table.
Every part of your business uses technology to some extent. The age of break/fix IT management is over. Your CIO or CTO will either help or hinder your business — there is no in-between.