Technology is intertwined with practically all businesses these days, and dependence on tech will continue to grow, meaning that for most organizations, there should be someone in charge of technology.

A chief technology officer (CTO) may not be necessary for every organization, but for any business where technology is a key driver of growth, it will likely become necessary to have a CTO at some point. 

For small tech companies and small to mid-sized non-tech companies where technology is a key business function, the role of the CTO is to own engineering delivery and define the technology framework, ensuring the company stays ahead of the technology curve. 

For companies of a larger scale, the CTO role moves away from engineering delivery and starts exclusively focusing on engineering excellence.

The CTO is then responsible for ensuring the tech stack of the company is continuously evolving, and that the right tech decisions are made to enable continuous innovation.

“This is a strategic decision and has to be driven by the CEO’s office, with important inputs from the IT team and the rest of the C-suite,” explained Sachin Gupta, CEO of HackerEarth, a software provider that helps organizations with their technical hiring needs. “Once a company finds it needs more support in terms of tech strategy, it is time to reevaluate if you need a CTO.”

He said with every company feeling pressured by the increase in digital transformation, those within the company that feel the most pressure should have a seat at the table when the question of hiring a CTO is being discussed.

“The role of a CTO is a strategic one and should be fully leveraged in that capacity,” he said. “The ROI of investing in a well-compensated CTO will decrease if the role is positioned as a tactical role.”

From Gupta’s perspective, the CTO should be involved in creating a vision and roadmap for how technology will be used in the organization, setting up objectives and key results, technical excellence and innovation, and working with other executives to ensure that the tech strategy aligns with the business strategy.

“It’s important that the CTO gets an equal seat at the table and is given a charter that matches the resources at their disposal,” Gupta said. “It’s also important to ensure that the rest of the business leaders fully understand the impact technology will create on the business, and they are supportive of making necessary investments.”

Matthew Warner, CTO and co-founder at Blumira, a provider of automated threat detection and response technology, said the big question is: What type of CTO do you need for your organization?

 “In some cases, the CTO may be ideating on visions for new technology, be a leader and enabler for your business, or perhaps acting as the person in charge of all infrastructure,” he said. “Who you hire must fit within your company’s needs.” 

Warner added the primary stakeholders involved in making that decision depend a lot on the type of organization and what its goals are for the new technical leadership.

“A company that builds software and is looking to scale will need engineering, revenue generating, and product teams to buy in just as much as fellow C-suite company members,” he said. “A company that builds widgets, for example, will need buy-in from a wider array of the organization if focusing on modernizing the manufacturing process.”

Gupta said initial processes to determine whether a CTO is needed include the evaluation of internal systems and meetings.

“If you find that your company is falling behind others, it may be because of the lack of strategic use of technology,” he said. “Companies need to review how and why they are using certain technologies and software to keep up in the digital age, and CTOs can fill this role.”

He added that it’s also important to evaluate the organization’s innovation quotient, determining if the engineering is just focusing on delivery and is potentially falling behind in keeping the tech stack cutting edge.

“Is it that the engineering teams are so drowned with delivery that they are not able to drive fringe projects which could lead to innovative outcomes?” he said. “If the answer to those questions is ‘yes’, then you should look at bringing on board a CTO.” 

Gupta said organizations also must evaluate the kinds of strategic decisions that need to be made around things like tech budgeting challenges, optimizing the work of the internal tech team, and evaluating outside tech solutions.

Warner pointed out that determining the problem you want to solve through a CTO hire should also be a key factor in the decision-making process. 

“If there is currently no CTO position filled, it means that there has been no technical leadership,” he pointed out. “You need to look at what issues this may possibly have created.” 

He said these identified issues can then drive the questions such as:

Will solving these items result in the business growing and/or being more successful?
Were these issues caused because of a cultural problem in teams or siloing?
Will the company invest in new directions and how will friction be reduced?
Who will fit into my existing successful areas of the business the best?

Warner said by identifying focus areas of issues, roles and responsibilities, data points should be also identified.

“The CTO is the technical leader of the organization, but they are a partner just as much,” he said. “They should be able to work with each department to ensure that they are providing support and guidance when needed. Most importantly, they should work within the confines of the identified need for the organization and support its growth and success.”