Role of CTO in Organisations

posted by: MITHUN MOHAN

Introduction
The significant role of technology in strategic business decisions has created the need for executives who understand technology and recognize profitable applications to products, services, and applications to products, services, and processes. Many companies have addressed this need through the appointment of a Chief Technology Officer (CTO) whose responsibilities include monitoring new technologies and assessing their potential to become new products or services, overseeing the selection of research projects to insure that they have the potential to add value to the company, providing reliable technical assessments of potential mergers and acquisitions, explaining company products and future plans to the trade media, and participating in government, academic, and industry groups where there are opportunities to promote the company’s reputation and to capture valuable data.
Integrating these technology-based activities into the corporate strategy requires that the CTO nurture effective relationships with key people throughout the company. These include the CEO, members of the Executive Committee, chief scientists, research laboratory directors, and marketing leaders.
The role of the CTO within each organization can be simply stated as that of the primary interpreter of operational technology issues and decisions. As the role of the CIO faces outward and is concerned with policy and strategy, the complementary role of the CTO faces toward the organization’s needs, use, and replenishment of technology within strategic and policy guidelines. Historically, many CIOs performed both roles; the increasing complexity and expanding role of technology, along with expanded security concerns, have enlarged these roles to be too large a burden for one individual. The CTO role involves a detailed understanding of where technology is going, a vision of where the business should go, and the ability to mesh those together and explain on both sides how that vision is going to be accomplished. Ultimately, the CTO serves as the bridge between the technologists and program areas to help them understand these details in order to make disciplined, proactive IT investment decisions.

Origins of the Chief Technology Officer
In the 1950s and 1960s, many large corporations established beautiful research laboratories at locations remote from their headquarters and manufacturing facilities. The goal was to collect brilliant scientists and allow them to study relevant topics in an environment unhindered by day-to-day business concerns. The director of the laboratory was often a corporate vice president who did not participate in decisions regarding corporate strategy and direction. Instead, his responsibilities were to attract the best scientists, explore new ideas, and publish respected research papers. By the late 1980s, companies began to anoint R&D laboratory directors as Chief Technology Officers. Technology was becoming such a prevalent part of company products and services that senior management needed an operational executive who could understand it and provide reliable advice on its application. However, executive search agencies, under direction from their corporate customers, continued to fill the CTO position with the same people they had recommended leading R&D laboratories.2 Several experiences with these candidates soon made it clear that the responsibilities of the CTO were significantly different from those of the research scientist. The CTO position called for a technologist or scientist who could translate technological capabilities into strategic business decisions. Lewis expresses this very clearly. “The CTO’s key tasks are not those of lab director writ large but, rather, of a technical businessperson deeply involved in shaping and implementing overall corporate strategy.”
Though large companies such as General Electric, Allied-Signal, and ALCOA created the position of CTO in the late 1980s, the position has also played an important role in computer and Internet companies in the late 1990s. Many of these provide products and services that are pure technology. Therefore, the CTO can play a prominent role in directing and shaping their entire business.

Skills and Competencies of an Effective CTO
Technology
The CTO should have been a leader in a technology that is an important part of the corporate business base.
Strategy
The CTO is a corporate executive dealing with strategic decisions about the future direction of the company. The CTO must make the transition from technical expert to business strategists.
Business Growth
CTOs must make decisions about which technologies are most likely to generate the highest rate of return. The CTO thinks about technology as a moneymaking asset, not as a field of exploration for its own sake.
Interpersonal Skills
All executives, including the CTO, must be able to communicate clearly and effectively with people from all types of backgrounds.
Executive Relationships
The CTO position is relatively new in most organizations; therefore, the individual filling the position must insure that he or she is included in the executive decision-making cycle.
The chief technology officer: Strategic responsibilities and relationships
Today's CTO is expected to contribute technology expertise to business strategies-not to create independent research labs and strategies that are only loosely coupled to the company's profit engine.
The significant role of technology in strategic business decisions has created the need for executives who understand technology and recognize profitable applications to products, services and processes. Many companies have addressed this need through the appointment of a chief technology officer (CTO) whose responsibilities include: monitoring new technologies and assessing their potential to become new products or services; overseeing the selection of research projects to ensure that they have the potential to add value to the company; providing reliable technical assessments of potential mergers and acquisitions; explaining company products and future plans to the trade media; and participating in government, academic and industry groups where there are opportunities to promote the company's reputation and to capture valuable data. Integrating these technology-based activities into the corporate strategy requires that the CTO nurture effective relationships with key people throughout the company..
The CTO's key tusks are not those of lab director writ large but, rather, of a technical businessperson deeply involved in shaping and implementing overall corporate strategy.

Strategic Responsibilities of the CTO
The CTO position is far from being standardized. Each company has unique requirements for its CTO and provides a unique organizational structure into which the person will fit. This section describes some of the more prominently cited responsibilities of the CTO.

Monitoring and Assessing New Technologies
The rate of change of technology guarantees that knowledge and expertise gained several years ago will no longer be completely valid. This creates the need for a technologically current person to serve as an advisor to senior executives during strategic decision-making. Paul O’Neill stated that a CTO should be expected to, “identify, access, and investigate high-risk, high return technologies possessing potential application within existing businesses or for creating new businesses”.
Strategy Formulation:

• Senior advisor to Bureau management and the CIO on technology investments and initiatives
• Participating with CIO and other Senior IT leaders including Architecture team in planning the short and long-range technology strategies;
• Providing leadership in ensuring appropriate technology usage
• Developing IT technology standards and protocols in line with federal requirements and industry “best practice;”
• Assesses new and emerging technologies to determine application to Bureau programs and services
• Identify and oversee business process driven technology improvements
• Manages and chairs the IT configuration control board
• Strategic Innovation
  Michael Porter explains that, “companies have to find ways of growing and building advantages rather than just eliminating disadvantages.” A significant part of this is strategic innovation. In some industries, new products based on new technology are the lifeblood of the company. In other industries, core products remain unchanged for decades, but the processes used to create them are continually evolving and becoming more efficient. O’Neill emphasizes that established companies need a CTO to “assure development of fundamental technologies offering clear competitive advantage for current and future businesses.”
  Opportunity Evaluation
• Identifies and evaluates new technology developments and gauges applicability to business processes by providing the Solution Architecture that satisfies business goals and objectives;
• Maintains a current working knowledge of IT best practices and innovative solutions within both government and industry;
• Develops, recommends, influences, and evaluates technology support, infrastructure operation, COTS/GOTS, custom applications, and governing policies;
  Cultivates and maintains knowledge regarding IT best practices and innovative solutions.
  

Tactical Planning and Prioritization

• Recommends, develops, integrates, administers, and evaluates policies, procedures, and standards needed to provide flexible and cost-effective IT services (specifically related to Web Services, Software Development Life Cycle, Technology Refreshment, Solution Architecture, and Technology Research and Collaboration);
  
• Provides Subject Matter Expertise to the Chief Information Officer;
  
• Solves IT business issues while managing IT costs and risks;
  
• Defines essential education and training required for the implementation, operations, and maintenance of Department information technology.
  

The distinguishing feature of all of these roles and responsibilities is their focus on operations. Long-range system architecture, blueprint development, and business process alignment with Departmental policies and strategies are the responsibility of the Chief Architect. The CTO assists in the association and realization of these areas through technology and its application to the operational environment.
Mergers and Acquisitions
Mergers and acquisitions (M&A) are an important part of the growth strategy of many companies. These involve important strategies in financing, governmental oversight, taxation, corporate culture, and technological synergy. The CTO’s role in due diligence includes evaluating patents, reviewing technical publications, and studying trade data to determine the value of the target company and to rank it against its competitors.
Marketing and Media Relations
Media attention to company products and capabilities plays an important role in the success of those products. Constructing the information and images released to the public is primarily the responsibility of the marketing and sales departments. However, technical expertise is required to accurately translate some product details into terms that can be marketed.

Government, Academia, Professional Organizations
Prominent technologists are often called upon to provide services to government, academic, and professional organizations. It is the duty of CTO to provide necessary helps for these activities.
Company Culture
Earlier sections described how the CTO could contribute to strategy, acquisitions, media relations, government committees, and academic research. But, the CTO can also serve an important role in creating the internal culture. The CTO should initiate activities and policies that create a technology-friendly culture aligned with the company’s business strategy. Other technology leaders throughout a company may create policies and practices that attempt to attract and retain the highest quality people available. However, if these are not aligned with the corporate business strategy, they may attract excellent people who are not able to contribute to business objectives.
The CTO should insure that policies and practices are constructed to attract the right kind, right number, and right placement of technologists. This will require the establishment of formal and informal networks to implement the policies and to insure that they are aligned throughout the company. These networks will also serve as the conduits through which corporate vision and direction can be communicated.

Conclusion

It is important that the CTO not become the senior technologist of the company. Instead, he or she is the senior business executive with a focus on technology. In the CTO position, senior management is not looking for enthusiastic advice from a research scientist. Instead, they need sound advice on business decisions involving technology.