CIO vs. CTO: Their Functions and Differences

 

Both CIO (Chief Information Officer) and CTO (Chief Technology Officer) are executive-level roles that play strategic roles in the technology space, but they perform different functions; one is inward-looking and another is outward-looking.

However, there exists confusion about these roles, particularly among laypersons, and some even use these titles interchangeably. While both roles are technology functions, the focus and objectives of their functions differ largely. In short, the CIO and CTO seem similar to an extent but they differ in responsibilities and objectives.

One of the key differences between these two roles is that a CIO looks for mechanisms to reduce investments in IT infrastructure and applications and save IT operating costs while enhancing productivity and efficiency and ensuring compliance. CTOs, on the other hand, tend to focus on the outward and leverage new technologies to scale and grow business opportunities.

What does a CIO typically do in a company?

A CIO typically leads a company’s — tech and non-tech — overall strategy around its internal IT infrastructure and operations. One of the major objectives that management looks up to from a CIO is to simplify and automate business processes and provide insightful analytics and information, using the optimal convergence of technology platforms, infrastructure, and applications. This is of course to achieve maximum efficiency and productivity in business operations, at minimal investment and cost in technology.

Under the broader objective of the role to align the IT organization with the overall business goals and strategy of the organization, the functions, and priorities of a CIO consists of the following:

• Developing and managing the strategic goals for internal IT infrastructure and operations
• Exploring and implementing new applications and tools to enhance business processes
• Negotiating and collaborating with suppliers and partners to adopt the best-fit business solutions
• Enhancing company results with the adoption of effective solutions and insights
• Ensuring the security and compliance of T infrastructure
• Reducing the investment and saving on the cost of running the IT organization.

What does a CTO typically do in a company?

CTOs, who typically work for tech companies, have the mandate for building technology products that meet customer needs. A CTO is required to constantly research and identify technology solutions to enhance the company’s product and service offerings. CIOs put strategies in place to manage the tech team who designs and develops the products and evaluates the features, experience, and functionality of the product.

A CTO typically focus on leveraging technology to build products that would help companies drive the growth of their top-line, and responsibilities and priorities of the role commonly include the following:

• Developing and managing strategies for designing and building the best technology products and services for customers
• Collaborating and negotiating with vendors and partners in order to enhance the products of the company
• Designing the product using the best technology to deliver to help improve the business of the company
• Manage and guide the teams to develop products that can capture new business opportunities
• Evaluating and implementing the new and emerging technologies and best practices to ensure that the new products are security compliant.

A CIO’s focus on budget and cost can become a bottleneck in the organization’s ability to generate value by modernizing technology at scale. At the same time, the CTO’s focus on opportunities to grow and scale business and revenue and provide the best customer experiences will need investment and new costs with no immediate payback. These two diverse focuses will have to be balanced for companies that have both roles on board, to gain the best benefits. Every company will approach the balance between these two roles differently, and some may even combine them.

Key differences between CIO and CTO roles

CIOs typically focus on business productivity and efficiency than CTOs and manage and control the budgets, costs, and investments of the IT organization with the objective to automate business processes and provide insights into operations and business aspects. While both roles are focused on technology, they differ in the backgrounds and skillsets required and practice their capabilities for different purposes and objectives.

They both participate in the development and execution of business strategy for the enterprise, but a CIO predominantly looks at the business model and operations across the company to provide solutions that will positively influence the overall business goals and objectives. On the other hand, a CTO focuses more on adopting technology platforms to innovate, build, and improve the company’s products, models, and customer experience.

The CIO’s priority is to optimize the operating business model of the company, while a CTO works with the objective of delivering products and services to meet the demands of the customers. Likewise, the CIOs can impact the bottom line positively by bringing in efficiency and productivity, and CTOs impact the topline by building and innovating products to grow business.

A company’s approach to the differing roles

“There is no one standard for the roles of CIO and CTO,” said Dan Priest, managing partner at PwC. “While there are common themes related to technology management, there are important differences across companies and industries.”

However, in tech businesses, the CTO is commonly a revenue-generating business function. CIOs, on the other hand, have the responsibility for the IT services and operations required to run the business. In most non-tech companies, where the role of CTO usually becomes irrelevant, the CIOs are accountable for the management of internal and external technology requirements.

Are both CIO and CTO needed in a business?

There is no hard and fast rule about this and each company usually has its own methods to define these roles. While most larger enterprises have both roles, smaller and mid-sized companies may go for a single person who can double up both roles, or they might decide to simply outsource their IT service needs.

However, a CTO is more critical in a tech company, particularly a tech product company, than a CIO or that role may not exist in such companies, at least in the initial stages. Also, cloud SaaS applications help companies manage most of their internal IT requirements without the need to have internal resources. In such companies, a chief product officer or chief business officer, or chief revenue officer may fulfill the function of a CTO.

How can CIOs and CTOs work together and collaborate?

There is an inherent risk of conflicts between CIOs and CTOs because they have several shared responsibilities, sometimes overlapping with each other. They should figure out means to resolve the tensions and find ways to collaborate for the benefit of the organization.

In summary, it is CTOs who matter in tech companies and CIOs may not be even relevant, while in other industries, both may have a role to play, particularly in large and diversified companies. In some companies, CTOs may report to CIOs. It all depends on the industry, size, structure, and governance policies of the organization. If you want one or both roles for your business, but cannot afford them full-time, avail of their services on the on-demand model from freelancing marketplaces.

Originally written on AiDOOS Blog at https://www.aidoos.com/blog/cio-cto/