How to find the best CIO Solution for my business? Full time, interim or virtual CIO?
You’ve decided it’s time to realise the strategic potential of IT. You know a transformational IT roadmap will bring significant operational and financial benefits, but you need a professional with the right skillset to pull it all together. A CIO seems the right choice, but with many ways to fulfil the role how do you know which is right for your business?
February 10th, 2021
Having a CIO-level professional on your board is the first step to treat IT as a strategic asset rather than a cost.
IT is no different from any other business-critical area. It needs a strategy, leadership, and ongoing management if you want to achieve measurable returns and competitive advantage.
Many businesses assume that the only way to gain access to a CIO’s knowledge and experience is a permanent hire. While this is certainly one option, there are alternatives available.
In this blog, we will explore the four different ways businesses can fill the CIO role and the pros and cons of each to help you with the decision-making process.
The 4 types of CIO you could hire
1. Full-time, permanent CIO
A CIO (Chief Information Officer) is usually the most senior technology executive inside a business. They hold responsibility for the IT strategy and determine areas for improvement and development within the IT systems and processes. A commercial mindset, extensive experience as well as a deep understanding experience of technology and its application, is necessary for a CIO.
Unlike an IT Manager, who usually focuses on keeping systems running and functional, a CIO is more outward-facing. They will focus on IT strategy and leadership, ensuring that IT is aligned with business goals and works in unison with the overall business strategy.
However, as the CIO is often the executive level interface between the IT department and the rest of the business, they need to keep abreast of day-to-day operations and issues. Any IT projects will likely be owned by the CIO, and they will be accountable for signing off on the solution and the actual implementation. They will ultimately be responsible for the project’s success and outcomes, ultimately the ROI.
What are the benefits of hiring a full-time CIO?
A full-time CIO provides the business with dedicated and experienced IT leadership at board level. They ensure an effective IT strategy, which works in unison with the business strategy, rather than against it, is in place and managed. This removes the load from senior leadership, allowing them to focus on their own expert areas of the business.
A good CIO can see past the hype of emerging technology, so they can advise the business on the right investments that will deliver operational improvements and a measurable return. It significantly reduces the likelihood of poor project outcomes, disruption and disgruntled staff.
This knowledge also enables businesses to address and manage risk more effectively. The CIO will be aware of evolving threats, as well as changes in the commercial landscape, allowing the business to mitigate risk while capitalising on opportunities their competitors may be unaware of.
What are the disadvantages of hiring a full-time CIO?
As many businesses seek a competitive advantage, the CIO skillset is a high demand allowing these senior professionals to pick and choose their roles to some extent, often pulling the big talent to the big brands.
This specialist knowledge makes a CIO an expensive hire. Average salaries are around £141,000 but can be upwards of £200,000.
If this is the first time the business has hired a CIO, then senior leadership may be unsure of what they need. Difficulties assessing candidates’ experience and whether it aligns with business needs only serve to make the process even longer.
However, many mid-market businesses may simply not have the requirements for a full-time CIO. Although the strategic direction and commercial focus will undoubtedly be of benefit, a less complex IT environment and a lower capacity for projects could mean a limited scope for change.
Research shows that CIO tenures are short, with an average of just 4.3 years – making them the shortest-tenured C-suite exec. Two-year stints are not uncommon as CIOs often want new challenges and the opportunity to deliver real change. As a result, a full-time CIO may turn out to be a very expensive, short-term hire. You might find yourself stuck in what feels like a constant recruitment cycle.
2. Interim CIO
Also known as a Contract CIO, an Interim CIO is an experienced technology leader who temporarily fills the CIO role.
The average tenure is between six months to two years and an Interim CIO is usually bought in to tackle a specific challenge while the business transitions between permanent CIOs. However, they are also sometimes hired to support and mentor a newly hired or promoted CIO.
An Interim CIO’s role typically falls into one of two camps. In some cases, they will be responsible for building corporate resilience so the business can maintain a competitive advantage. Essentially keeping the lights on. In others, they will have a more transformational role, tasked with formulating a strategic plan and executing it.
What are the benefits of an Interim CIO?
An Interim CIO offers many similar benefits to a full-time CIO but can be quicker to hire. This is beneficial for those businesses in ‘crisis mode’ who cannot afford to wait to make a permanent hire. Or for those who have time-sensitive projects (such as an M&A) and need immediate access to the skillset.
Their laser focus on a specific project or business area allows Interim CIOs to add immediate value. A dedicated, experienced professional driving the initiative increases the likelihood of that project remaining on track and delivering expected outcomes.
A rich and varied CV can make Interim CIOs valuable mentors. With experience across industries, business types and environments, they will have seen a multitude of scenarios and challenges. Not only does this knowledge aid the IT department but can help senior leadership make better IT-related decisions.
What are the disadvantages of an Interim CIO?
Much like their permanent counterparts, Interim CIOs are an expensive hire. With skills high in demand and a limited number of professionals available, they can cherry-pick their projects and command high compensation.
As a temporary hire, an Interim CIO is only going to be available for a set period so there may be limits as to what can be accomplished in that time. Businesses will need to define a clear objective for the engagement and a fixed schedule for delivery.
Existing problems in the business environment may also affect the success of delivery. Long-term or chronic underinvestment in the IT environment, problems left behind by predecessors, or a need for overall business transformation can all affect project delivery.
Company culture, along with the professional’s skill set and adaptability, are key to success. The Interim CIO will not only need to quickly get up to speed with the organisation structure and technology portfolio but also quickly win round and influence key team members to ensure objectives are met. This, of course, is not impossible, but the senior leadership team need to be confident in their hire.
3. Virtual CIO
A Virtual CIO (vCIO), also known as a fractional CIO, provides consultation on IT and technology strategy as a third party. Compared to full-time and Interim CIOs, who take an active role in company operations, the vCIO is often an advisory role.
They will have similar responsibilities to an in-house CIO, but the core difference is that the service is delivered virtually. You may not meet your Virtual CIO and there could be multiple people working on the business at different times, depending on the structure of service.
Often virtual CIO Services are more focused on the improvement of day-to-day operations, rather than long-term strategic planning, management, and innovation.
What are the benefits of a Virtual CIO?
The main advantage of using a vCIO Service is the significant cost savings compared to hiring internally. Most services are offered at an hourly rate or flat fee, making it easy to budget and account for.
With a vCIO, you will also have someone dedicated to strategic IT management, even if it’s on a limited basis. It can be a good starting point for companies new to the strategic approach and will still be better than people within the business spending a few hours here and there trying to make improvements.
What are the disadvantages of a Virtual CIO?
A vCIO typically works across multiple businesses so may not be as readily available to deal with issues that arise. Those businesses which are tech-heavy or very reliant on technology will probably need a more heavyweight and involved resource.
As a virtual service, you may have little to no ‘face time’ with your CIO. It may be difficult to build trust as the CIO may feel disconnected from the business, affecting results delivery.
Depending on the provider you have chosen, you may also need to factor in time zone and cultural differences.
A better alternative for the mid-market… The CIO Service
You may feel that a virtual CIO will not deliver the expertise and attention needed to achieve measurable outcomes. However, if you don’t have the resources or requirements to justify a full-time hire, then surely this is the only option?
There is a fourth alternative that bridges the gap while still delivering tangible value on a cost-effective and flexible basis.
QuoStar’s CIO Service has been specifically designed to provide mid-market businesses with the strategic IT leadership necessary to deliver the benefits of a full-time CIO but without the significant costs.
- Proven, seasoned sector-specific CIOs with a combined 60+ years’ experience
- A proven methodology and framework to deliver a strategy and transformation
- Completely embedded within your organisation – one of the team
- Guaranteed results backed by our Outcome Assured™ promise.
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