The difference between CIO and CTO

7735952746_2c1c2d13c0_zThe question has two answers. One is short, the other one is long. There is also a third answer, which reads “what the CTO is not” – and this may be the most controversy topic. We’ll start with that main answer and then go thru some background, and finally round off the post with the point of all this (click to get the point now).

What the CTO (Chief Technology Officer) is not

The CTO is not a full-stack developer who builds applications in startups. Not only at least. There you go. Why? Continue to read and we’ll round off in the end, with a conclusion.

Short answer

The CIO (Chief Information Officer) maintains the IT operations, the CTO introduces technology to support the business and or customers needs.

The CTO is not a full-stack developer who builds applications in startups.

Long answer

It took a long time for companies to realize that they need to have a CIO in the executive board. Some companies still has the “fake” CIO report to the CFO (Chief Financial Officer). This was actually “just” a VP of IT Operations / IT-director who was given the impossible job of combining great IT with savings. The role of the CFO (short) is to maintain the company finances, and cut costs (read: to make sure they are cost-efficient). As IT traditionally has been seen as a cost center, meaning a department in the organization that doesn’t generate any revenue (profit), it simply just cost a lot of money. The same as HR and Accounting. It has been seen as a company support function – the necessary evil. Without it the company can’t operate. Everyone needs “IT”, right? This kind of thinking stems from old school thinking, and no real company these days still think in this way? Not true. It’s still around. But some companies understood that the CFO didn’t know enough about IT, and his/her Excel-skills was not enough to justify being the real Head of IT. Some CIO’s made it to the board. This was the first baby steps for companies to understand that they could use IT not only as support function, but to be “competitive” (meaning everyone else did it too, and if you didn’t you’d be left behind quick).

Many failed badly, as they were forced to bring up the most important KPI – cost

The CIO went on and continued to operate the IT infrastructure, the software landscape (usually a mess of 100s of different applications, poorly maintained and documented with non-existing security and old technology), user support and the microsoft office licenses. Some CIOs went a step further and engaged in IT projects to implement “Business systems”. Many failed badly, as they were forced to bring up the most important KPI (Key Performance Indicator, a pre-defined measurement management uses to control processes)  – cost, eagerly cheered by the CFO (again). So the projects was delivered like that; lengthy requirements documents which know one understood or questioned (or even needed), executed by the cheapest vendor who underbid to get the deal in the first place. A gold mine for consultants who came in to try to fix the issues, which was of course impossible, it was like putting lip-stick on a pig. The CIOs then tried to respond to the CFOs cost-saving mindset by outsourcing of services. An entire country (India) bloomed (and still is) – even though they have competition from “upcomers” (Bangladesh, Ukraine, Poland to mention a few). After a few years of messy and wrongly understood requirements they somehow got around and even though some brought “home” IT, most of “IT” (what is IT anyway? It’s everything) is still outsourced. It’s now seen as a commodity (a somewhat standard). IT-services as in installing software, enabling email and setting up a collaboration platform with file sharing, access to system etc works great outsourced, provided that they do a good job listening to the customers (hey the employees they pay!).

Imagine an axis scale. On one side there is innovation, on the other side is standardization (process). Don’t try to combine them.

But what about the development and using IT to create new great fields of fortune? The CIOs was busy outsourcing, the CFOs cutting costs. Some CIOs tried to “innovate” by creating innovative business processes. Wait what? Imagine an axis scale. On one side there is innovation, on the other side is standardization (process). Don’t try to combine them. It’s not going to work. Ok? Thanks. Ok so back to the board. They also heard about these new cool startups (like the ones in Copenhagen, Denmark). That they were able to create amazing apps and build them themselves. With college students, teenage self-taught developers and people with their own drive – “founders”. So the board thought to welcome the CTOs in. They would be free from “IT operations”, but instead concentrate on making the company “distruptive” and “innovative”. And despite the somewhat irony here, this has been a real changer for many companies. CTOs are technologically interested people, who knows how to bring an idea to a product, using technology. Of course with the help of the CIOs resources and IT skills. CTOs knows how to build things quick to show off results fast, as in MVP (minimum viable product) – which also calms the CFOs. In many new startup companies, the “regular” developer who’s a bit experienced and knows how to build great applications is upgraded to CTO. In many cases it’s a great idea. In some it’s a disaster. The CTO needs to be an enabler, a business driver motivator who understands strategic processes, how to engage the board and other key stakeholders (people with interest, direct or indirect) and get stuff done. If the new CTO doesn’t possess these skills, the company are set for a disaster. The product my be well coded but no one likes it. Because face it – working on the C-level (and everywhere else too) in a company is all about politics. Be transparent. Sell your idea. Share it. Talk about it. Pitch it all the time. Engage others. Induce trust. How? By being the corporate technology evangelist.

Conclusion:

The role as a CTO is much more than just a great tech lead. You need to know how to make a business case for your ideas, but when you do – you are a true corporate innovator who potentially can be one of the most important drivers for the evolution and development of the company, long-term.