The need for strategic IT management has escalated due to the rise of information systems and technology in companies, highlights research.
As such, numerous organizations employ a Chief Information Officer (CIO) to handle relevant tasks.
The same study demonstrates that hiring a full-time CIO isn’t an ideal route for businesses below a specific size.
Here’s when the alternative approach of hiring a fractional CIO comes in handy.
Typically, small and medium-sized businesses encounter budget constraints and prefer utilizing part-time or project-based services.
A fractional CIO allows SMBs to access proficient services part-time, eliminating the need to hire a full-time employee.
This guide will shed light on whether leveraging fractional CIO services benefits SMBs.
What Is a Fractional CIO?
A fractional CIO is a professional who provides part-time services to organizations.
Generally, CIOs oversee a company’s IT strategy, operations, and management on a full-time basis.
However, not all organizations, especially Small to Medium-sized businesses, have enough resources to hire a full-time CIO.
This is when a fractional CIO steps in to fulfill the IT leadership role as needed.
They have expertise in IT strategy, digital transformation, technology vendor management, and cyber security.
This approach allows companies to access the experience and knowledge of a CIO professional without investing in a full-time executive.
Is Utilizing Fractional CIO Services a Sound Strategy for SMBs?
Employing a fractional CIO can be an effective strategy for small and medium-sized businesses.
However, there are numerous factors to take into account. Here are some considerations to help you decide whether to hire one for your company.
- If your SMB heavily relies on technology for its growth and operations, investing in a technology expert like a fractional CIO can be worth it. They’ll guide you about the best possible technology strategy for your business.
- Investing in a fractional CIO can help those seeking cost-effective access to proficient IT strategy services.
- Since fractional CIOs work with numerous agencies, they have extensive experience in IT strategy and technology. This implies they may provide insights lacking in your existing team.
- Fractional CIOs also often bring resources and a network of contracts you can leverage to benefit your business.
- If your SMB has specific technology-related projects (like cloud migration, digital transformation, and cybersecurity), a fractional CIO can be hired for a specified timeframe to take on certain projects.
How Can Fractional CIOs Help SMBs?
Instead of refraining from assigning responsibilities that can have adverse consequences on a company’s performance, businesses can opt for a fractional CIO.
Here’s how they may assist your business.
Strategic Planning
Since fractional CIOs are abreast of the latest technological practices, they bring strategic thinking to the SMBs.
They thoroughly assess a business’s needs and create a roadmap for technology integration.
By leveraging the newest technology, they support your organization’s long-term vision.
Risk Management
Cyber attacks are becoming increasingly severe, highlights the Harvard Business Review. As such, businesses are experiencing a heightened risk of data breaches.
A fractional CIO can evaluate the existing cybersecurity framework of an organization and execute risk mitigation strategies accordingly.
This will ensure compliance with the latest regulations and alleviate the risk of legal issues and data breaches.
Cost Optimization
A study involving 200+ IT professionals across 18 countries reveals that a whopping 95% of businesses struggle to optimize IT budgets fully.
This means cost optimization alone is a formidable challenge for companies.
Fortunately, fractional CIOs are experienced in handling technology budgets efficiently.
They can improve a company’s bottom line by identifying areas where cost savings are possible - think vendor negotiations or software licensing agreements.
Project Management
Efficient project management reduces risks and enhances business productivity.
SMBs frequently take on technology projects like infrastructure upgrades and software implementations.
An experienced fractional CIO can seamlessly handle these projects while also ensuring timely deliveries within budget.
Operational Efficiency
An in-depth evaluation of a company’s operations allows fractional CIOs to spot opportunities to boost operational efficiency.
They may achieve it through process optimization or technology automation.
This allows them to deliver quick service, reduce operational costs, and enhance customer satisfaction.
Digital Transformation
Digital transformation is imperative to streamline business processes, boost customer experience, enhance productivity, and stay ahead of the competition.
Fractional CIOs are familiar with the latest initiatives, allowing businesses to leverage emerging technologies like AI, cloud computing, and the Internet of Things (IoT).
So, if you seek to optimize your existing practices to thrive in the competitive business world, a fractional CIO can help.
Advisories
Besides day-to-day responsibilities, fractional CIOs also serve as advisories to the leadership team.
Since they are familiar with emerging technological trends, they keep businesses informed to help them stay competitive and innovative.
It is therefore encouraged to choose a fractional CIO who, besides possessing hard skills, offers honest advice to help your business succeed (more on this below)
Disaster Recovery
Businesses can encounter various disruptions that can significantly impact their operations, from natural disasters to technology disasters and health-related crises to economic problems.
However, preparedness can help mitigate losses and ensure business continuity soon after the disaster. Therefore, planning for disasters is crucial to keep businesses from catastrophic incidents.
Fortunately, a fractional CIO can develop and oversee disaster recovery plans. This will ensure that companies can quickly repair from unprecedented events.
Tips to Pick the Right Fractional CIO for Your Business
Given the substantial impact a fractional CIO has on your business operations, you’d want to ensure you opt right. Keep the following tips in mind before finalizing one.
- Know your objectives. Begin by defining your SMB’s objectives and goals. What specific challenges do you want a fractional CIO to look into and optimize? Knowing your objectives will assist you in finding the right CIO for your business.
- Learn about their experience. It is always best to invest in an experienced fractional CIO to be on the safe side. Check their previous work - they must have a track record of handling similar technology projects in a relevant industry.
- Check references from their previous clients. You can also ask them about the outcomes of past projects, including technology improvements, cost savings, and more.
- Communication skills. Since technological concepts are rather complicated, you’d want to ensure a fractional CIO is eloquent enough to convey relevant information to non-technical stakeholders.
- Leadership skills. While addressing business needs through technical skills is their primary job, a fractional CIO with leadership skills acts as a trusted advisor. They closely assess your business needs and address unique challenges to ensure your strategies align with your business goals.
- Cost-effectiveness. Given that cost savings are a potential benefit of hiring a fractional CIO, you’d want to ensure you aren’t investing in someone who’d incur more than expected. Make sure you compare the fees of various service providers before finalizing one.
- Trial period. You can always start with a shorter contract to assess how well a fractional CIO fits your company's needs. This will minimize the risk if the fit isn’t right.
That’s a Wrap!
Fractional CIOs are an economical solution to access specialized IT leadership without needing a full-time executive.
They can guide your business through technological complications and deploy effective IT strategies to boost efficiency.
While it is advisable to invest in one if you want to adapt and innovate in the competitive business landscape, it ultimately boils down to your unique circumstances.
SMBs with budget constraints and growth aspirations can derive immense value from the expertise of a fractional CIO.
FAQs
Why Hire a Fractional CIO?
Hiring a fractional CIO allows businesses to handle complicated technology challenges. Companies can make informed decisions and optimize IT operations by accessing specialized IT leadership without investing in a full-time CIO.
Do Small Companies Need a CIO?
Small companies who seek to leverage the latest IT practices to stay ahead of their competition can benefit from fractional CIO services. However, whether or not these services are necessary depends on a company’s industry, size, and specific needs.