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As technologies continue to drive business success, businesses often face the decision of whether to bring in a technology leader to help them align their technology strategies with their business strategies for growth. There are 3 primary technology leader roles: The Chief Information Officer (CIO), the Chief Technology Officer (CTO), and the Chief Information Security Officer (CISO). Setting aside the CISO role for the moment, the CIO and CTO roles are defined as the most senior roles focused on technology for an organization. However, the two roles are notably different. Understanding the distinctions is key to making the right hire. To help guide the decision, here is the single most important question that CEOs and C-suite leaders should ask themselves to assess their needs:
What role does technology play in your organization?
If technology is primarily used to support business operations (e.g., financials, manufacturing, supply chain, customer service, field support, etc.), you are a technology consumer and need a CIO. Conversely, if technology is your core product—such as in a SaaS company—you need a CTO to lead the development of your core revenue-producing products. Your organization primarily functions as a technology creator.
The following explains the distinction between the two terms. Technology use in organizations has become so ubiquitous that all types of organizations in all industries use technology leadership to effect the “strategic planning, implementation, and management of technology resources (both human and financial) to achieve organizational goals, foster innovation, and maintain a competitive edge in the marketplace.” However, to achieve the goal of better understanding technology leadership, all organizations using Technology Leadership can be assigned to one of two broad categories:
- Technology Consumer - Those organizations that primarily consume technology to produce their revenue and
- Technology Creator - Those organizations that primarily create technology to produce their revenue
Technology Consumers are heavily dependent on Technology Creators for innovation and transformation - spending the bulk of $4+ trillion annually worldwide to compensate Technology Creators for all manner of technology products and services (datacenter, software, devices, services, communications, etc.). This is not to say that Technology Consumers don’t, at times, create technology or that Technology Creators don’t make use of technology created by others. But, as the categories suggest, the key differentiator is whether the primary source of revenue (e.g., greater than 50%) is derived from selling technology to other organizations or derived from selling other products and services (banking, auto, construction, etc.) that benefit from consuming technology created by others.
Defining the two broad categories of organizations that engage technology leadership is useful in understanding the roles that comprise technology leadership.
“All organizations using Technology Leadership can be assigned to one of two broad categories: Technology Consumer or Technology Creator”
- Burke Autrey, CEO, Fortium Partners
So if your business stands at the crossroads of deciding what type of technology leadership role would have the most impact on your business, ask yourself:
What role does technology play in your organization?
Your answer will drive the technology leadership strategy for your organization.
For more comparisons of the key differences between the CIO and CTO roles, check out the chart below.
|
Title/Role |
CIO (Chief Information Officer) |
CTO (Chief Technology Officer) |
|
Primary Focus |
Manage internal technology systems to support business operations; focuses on primarily consuming technology to support other business goals |
Oversee technology product development for market-facing products; focuses on the creation of technology products |
|
Typical Industry |
Technology Consumer (banking, retail, etc.) |
Technology Creator (e.g., SaaS companies) |
|
Key Responsibilities |
- Strategic Technology Planning |
- Product Development Oversight |
|
- Technology Investment Management, Technology talent management |
- Product Talent Management and Process Management |
|
|
- Operational Excellence |
- Product Development Infrastructure Management |
|
|
-Infrastructure/Data Security |
- Product Strategy and Innovation |
|
|
Top 3 Priorities |
1. Operate the technology organization successfully |
1. Establish and maintain a healthy and robust relationship with Product Management |
|
2. Innovate within the organization and its industry |
2. Consistently deliver high-quality, value-focused product increments on a streamlined development and delivery platform |
|
|
3. Secure the organization by protecting its assets and reputation and remaining compliant with required standards. |
3. Build the right SaaS organizational structure and staff it with the right people |
|
|
Strategic Contribution |
Aligns technology strategy with organizational goals and industry trends; manages technology investments |
Influences product strategy and market decisions to align with business goals and strategy; builds great products! |
|
Key Distinction |
Primarily a buyer of technology, leveraging commercial technology products and services to support the business |
Primarily a technology creator, focusing on commercial, market-facing product/service development |
|
Common Responsibilities |
Strategic planning, operational excellence, team and talent management |
Strategic planning, operational excellence, team and talent management |
|
Unique Responsibilities |
Technology investment management, internal system operations, aligning with industry standards |
Product lifecycle management, innovation, product development infrastructure management, collaboration with product teams |
