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Are Fractional CTOs the Growth Enablers for Indian SMEs?

Are Fractional CTOs the Growth Enablers for Indian SMEs?

McKinsey research identified seven levers that Indian companies can pull to accelerate growth. They classified these seven levers into two categories – the core and beyond the core. The 'core' includes – unleashing digital and data, agile resource reallocation, and investing in the next line of leaders, whereas 'beyond the core' includes – pursuing adjacent opportunities, creating new breakout businesses, driving exports and M&A.

In this blog, we try to understand the role played by fractional CTOs in strengthening some of these growth levers for Indian SME businesses.

Fractional CTOs Helping Digital Transformations and Growth

According to the study, companies that showed higher growth over the years as compared to their peers have used digital transformations and data analytics to support various organizational processes such as marketing, product planning, design and development, and delivery.

Digitizing business operations has become necessary to compete in the always-expanding dynamic markets, especially post-COVID-19 pandemic. The pandemic changed the way we do business by enabling new technologies that facilitate remote working. For employees to be able to work from remote locations, it became imperative to implement the required digital infrastructure and use standard digital processes.

Technology is proving to be a backbone for businesses to survive and thrive in the global competitive market. Hence, the technology leader has become a key influencer for all companies, large or small.

A CTO is responsible for selecting and implementing the right technology to support the digital transformation of the business. 

They help optimize the investment in technology and customer success with the help of data analytics. 

The CTOs are also responsible for managing the data security. They have become indispensable for companies that strive to improve their operations and grow.

Can all SMEs hire a CTO?

Indian SMEs have limited resources to hire a full-time CTO or chief technology officer. The costs of a full-time CTO are too high for a small or medium-sized business. This gave rise to the practice of outsourcing the technology function leadership to shared or fractional CTO services companies.

Fractional CTOs help Indian SMEs identify and overcome technology-related challenges and help streamline and grow their business.

Fractional CTO Driving Agile Resource Management

The growth-oriented companies use agile methods of resource reallocation to improve profitability. There are many tools, technologies, and methodologies available for facilitating resource allocation, for example – ERP enterprise resource planning software SAP, Microsoft Dynamics 365, Oracle, Agile methodologies such as Scrum, Kanban, Extreme Programming (XP), Lean Development e Crystal and agile project management tools ZOHO, JIRA, Asana, etc.

The fractional CTO, or the technology leader offering retainer-based services, plays a significant role in selecting the right technology and tools for agile resource allocation on both strategic and operational levels. Even for a small or medium-sized business, competing in the global market is becoming imperative to succeed and grow, and improving resource management is the key to improving product competitiveness. For such SMEs, hiring a fractional CTO becomes cost-effective.

Supporting Second Line of Leaders

Recruiting and training leadership talent can be costly and time-consuming for SME businesses due to the limited resources and high recruitment and training costs.

Fractional CXOs can fill this gap. By hiring these tech experts on demand or a retainer basis, SMEs get expert advice at an affordable cost.

These experts can provide the necessary support and guidance to the second line of leaders.

Creating New Breakout Businesses

Along with the founder and the product development team, a CTO serves a key role in generating ideas for new products or services after studying the markets, both local and global. 

Large companies hire strategy consultants to identify opportunities for exploring new products and markets. 

Fractional CTOs can identify new product opportunities faster since they usually have broader industry experience and advanced knowledge of technology.

Hiring an on-demand CTO benefits SMEs since they can help create new business opportunities and support the development and delivery of these products or services. 

How to Select the Right Fractional CTO for Your SMB?

Fractional CTO or virtual CTO is still a new concept in India. There are individual CTOs who offer their services on a part-time or shared basis to companies in need of technology advice. Some of these CTOs are listed on the job sites such as Uplers.

Some firms, such as CTO Bridge, have many CTO partners. These partners have diverse experience across many industries and various types of businesses. If you choose these CTO firms, you get better service and specialized solutions for the problems that your business is facing. 

Do These Three Steps Before Hiring a Fractional CTO

1. Define what you want from CTO

  • Starting with a clear purpose while searching for a suitable CTO for your business goes a long way to ensure success. 
  • Chief technology officers have the expertise to help your business get out of technology-related problems that are operational in nature. 
  • They can also help you improve your products or services, and tech enable your business. 
  • They can form an integral part of designing your technology strategy.
  • As a founder or a CEO, you should list problem areas that you need the fractional CTO to resolve. This will give them a clarity of purpose and help select the right person for the job.
  • Have a clear RFP (request for proposal) explaining the task, time commitment, and the expected results from the fractional CTO.

2. Communicate with the in-house IT team

  • You might already have an IT person or a team in-house who usually looks into the business's technology needs. 
  • It will help if you take stock of the in-house capabilities and assess the need to outsource the technology leadership. 
  • Explaining to the in-house IT team the decision to hire a part-time external leader will also help manage their resistance toward the external hire.

3. Check Case Studies and References

  • You can use professional social networks like LinkedIn or job search sites like Uplers Indeed to search for a fractional CTO. 
  • While doing so, ask prospects for relevant case studies to understand their industry experience. 
  • Use reference checks as usual in the hiring process.

No business can survive long without using the latest technology, and fractional CTOs are a good alternative to hiring full-time CTOs for small and medium-sized enterprises in India.

Don’t hesitate to set up a free consultation with our CTO now.