What is a Chief Technology Officer? Everything you need to know about the CTO

Once in the shadow of the CIO, CTOs are now transforming into innovation-focused technologists - and the business can't get enough of them.

How the CIO is changing again to focus on future growth

What is a CTO?

The chief technology officer (CTO) is the executive responsible for managing technology within an organisation; that can include everything from creating a technology strategy though to cybersecurity and onto product development. They need to understand broad technology trends and be able to align innovation with business goals.

What skills do CTOs have?

Salary research specialist PayScale says popular skills for CTOs include expertise in software architecture, leadership, IT management, product development, and project management. However, CTOs are increasingly prized for their knowledge of pioneering areas of technology, such as digital products, technical vision and research and development (R&D).

What does a CTO do?

Gartner says the CTO has overall responsibility for managing the physical and personnel technology infrastructure, including deployment, integration, systems management, and the development of technical operations personnel. CTOs also manage vendor relations to ensure that service expectations are delivered.

In a sign of the increased expectations of top-class CTOs, the analyst says the role is moving beyond infrastructure management and towards driving technology innovation and leading digital product development. The analyst says CTOs should be looking to evolve their responsibilities in response to the business' demands for digital transformation.

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That's a sentiment that chimes with Lily Haake, head of the CIO Practice at recruiter Harvey Nash, who says CTOs would have historically been senior architects who reported into the CIO and held responsibility for infrastructure. Now, her firm sees many types of CTOs, with some running big software development teams that manage a company's digital platforms.

"It's so nuanced and the title in itself can mean so many things to many different people," says Haake. "It's difficult to say what the perfect CTO looks like because it will be led by what sector you're in, how big the organisation is and what the ultimate product or service is."

What's the difference between a CIO and a CTO?

That's a good question, seeing as the chief information officer is also often defined as the most senior IT executive in the business. The difference between the CIO and the CTO depends very much on the type of business you're talking about.

Some businesses only have one or the other – and in these organisations, the person holding the title, whether CIO or CTO, is the most senior tech chief in the enterprise. Many big businesses, however, have both – and that's where things get complicated.

In firms with both, the traditional split is that the CTO is responsible for the operational concerns associated with technology implementation. CTOs drill down into the details of technology. They have a strong systems focus and they know how technology works, making it more of a chief architect role.

CIOs, on the other hand, tend to focus more on engaging with the business. So while the CTO might go and speak with vendors to source technology, the CIO makes sure the internal business gets the secure and governable systems and services it wants.

How does the split between CIO and CTO work in technology companies?

While the CIO focuses on internal applications of technology, the CTO is very much externally focused. In these companies, the CTO – as well as being an expert technologist – becomes the external face of the vendor's technology offering.

Perhaps the most high-profile example of an externally focused CTO is Werner Vogels at Amazon, who's in charge of driving technology innovation within the company. Along with CEO Jeff Bezos, he's one of the well-known personalities behind the business.

How do CIOs and CTOs work together?

The most effective CIO and CTO partnerships involve trust and teamwork. Lexmark CIO Brad Clay says the relationship is in practice one between IT and R&D.

"When we work well, we're both able to leverage one another's strengths," he says. "Understanding our differences is key; the CTO is an inventor at heart and their role is on development, whereas a CIO is focused on mastering multiple skills with a view to acquiring technology or expertise rather than building it."

Clay says it's worth remembering that CIOs and CTOs are ultimately all working towards the same goal – supporting and driving business growth. Acknowledging one another's strengths and expertise will help to foster areas of mutual agreement, such as where skills gaps between IT and R&D teams can be plugged by one another.

"This was important at Lexmark when we looked to build an integrated cloud platform to roll out our products and services faster," he says. "Our CTO's team initially wanted to build a platform from the ground up, and we were able to convince them customising a third-party platform would be a better and faster route to meeting customers' needs, shortening build time from three years to 18 months."

Does the size of company impact the role of the Chief Technology Officer?

Most definitely, says Dave Bishop, CTO at lovethesales.com, who says responsibilities vary greatly depending on the maturity of the company. The CTO title is common in startup and scale-up organisations that are using technology to help the business grow quickly.

Bishop was part of the founding team at his organisation. He was actually the only engineer in the business for the first year or so, where the firm needed to gain a huge amount of traction and secure further funding.

"Scaling the team became the next priority in order to grow the business and to keep pace with our ever-increasing ambitions," he says. Being a CTO in a startup or scale-up can sometimes feel daunting. In a single day, a CTO might find themselves managing team issues, debugging machine-learning code, reviewing legal documentation and then presenting at a JavaScript conference in the evening.

"I find that being a CTO is mostly about making trade-offs – you are in a state of constant flux, trying to juggle technical debt, costs and constantly changing product requirements. In order to be a successful CTO, all of these balls must stay in the air," says Bishop.

If every company is now a technology company, where does that leave the Chief Technology Officer?

In a pretty good position, actually. As the importance of technology within the business has risen, so has the demand for knowledgeable technologists. So much so, in fact, that some businesses – including established enterprises – have opted to rely more on a CTO than a CIO.

Take Trainline CTO Mark Holt, who is the company's senior technology leader. His explanation of being a CTO, rather than a CIO, is that his company is a technology business. His day-to-day focus is innovating through technology on behalf of the customer, not on running operational IT systems.

How does the CTO role interrelate with other digital leader positions?

There's now a host of other C-suite positions that have an influence on technology decision-making, such as chief data officer, chief digital officer, and there's also long-standing positions to consider, including head of IT, vice president of IT and IT director.

In many ways, the rise of these new C-suite positions has heaped more pressure on the CIO than the CTO. With increasing amounts of technology spend residing with line-of-business departments, there have been numerous debates about the significance of the CIO role because CDOs operate in territories that are traditionally seen as the preserve of the CIO.

CTOs, on the other hand, are detached from this battleground. The inherent strength of the CTO is their detailed understanding of systems and services. Being a CTO at a time when technology has never been more important to business sounds, on the face of it, like a good career strategy.

So is the CTO the new CIO?

CIO remains the most commonly used title for the executive who runs technology, but the IT leadership position is in an almost-constant state of flux. As Ian Cohen, chief product and information officer at ICS Group, suggests, there is still no good definition of what constitutes an IT leader – and we've been struggling to find a definition for more than 30 years.

"The experts haven't yet come up with a decent collective term for people who just have a passion for what technology can do and how to use it to become different kinds of companies. I've been an IT director, CTO, CIO, chief product and technology officer and even a consultant, but I've ostensibly done the same thing all the way through because my passion has stayed the same – technology for the betterment of our customers, colleagues and organisations."

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The IT leadership role is a C-suite position in an almost-constant state of flux.

Source: Harvey Nash and KPMG

What Cohen recognises is that the underlying nature of technology to modern business means that more organisations than ever before want an executive who is not just comfortable talking about tech but who really understands the difference that the tactical use of systems and services can make to the organisation.

CIOs have spent 20 years proving they understand business issues as well as technology concerns. Yet, in many ways, what the enterprise needs now is someone who understands technology in detail and can demonstrate how these tools can help the business transform.

This focus on technology, particularly in the creation of a firm's products and services, helps to explain why increasing numbers of tech chiefs – such as Tarah Lourens at Rightmove – are taking on the chief product and technology officer role.

What makes a great CTO?

Harvey Nash's Haake says CTOs are still technologists first and everything else second. The CTOs she places tend to have taken an engineering-led route to the top. They might, for example, have started their career as a software engineer and will always understand the nuances of technology.

Yet technical capability is not the only success factor. Haake says the CTOs she's recruiting are expected to have deep technological knowledge, but their ability to move from a senior engineering position into the C-suite is dependent on softer skills, such as engagement and influence.

"What's going to make the difference is being able to engage with the business, being able to influence business stakeholders, and ultimately drive new revenue via technology," she says.

What is the CTO career path?

The increased prevalence of technology is good news for those who hold the position. In blue-chip firms, CTOs have traditionally reported into CIOs. Haake says her anecdotal evidence suggests that CTOs are starting to move more towards reporting into non-technologists, such as the chief executive or the chief operating officer (COO).

In fact, Haake says CTOs are well placed to move up the executive ladder. The underlying role of technology in modern business means Harvey Nash is seeing more requests for COOs with a technical background. Even if they don't take on broader responsibilities and become COOs, the career outlook for engaged CTOs is bright.

"Access to new customers via technology is so important, so a strong technologist is going to be absolutely critical to the business," she says. "You might stay as the CTO but you should expect to have a seat on the executive team if you're successful."

How much can CTOs expect to earn?

Harvey Nash reports that 60% of digital leaders say good pay is the most important factor when looking for a new job. PayScale says an early career CTO with up to four years' experience can expect an average salary of £82,723. A mid-career CTO with up to nine years' experience averages £80,000. Experienced CTOs (10 years and above) can expect to earn more than six figures.

Harvey Nash says the global average wage for CTOs touches £120,000. The average CTO salary in the United States is $244,907, according to Salary.com. Top-class executives can expect to earn more. Glassdoor reports that a recently placed CTO snared a £200,000 annual salary, plus a £50,000 annual bonus.

What's does the future of the CTO role look like?

In short, very rosy. Haake says tech is "very à la mode" right now. While the traditional narrative of the CIO role around information systems management is becoming outdated, increasing numbers of digital leaders are seeing themselves as technologists, with a strong focus on digital, innovation and R&D.

"A CIO who's only focused on enterprise systems and transformation might find that they are usurped by an exciting R&D-focused CTO who's going to really change the game for the company," he says.

That's something that chimes with lovethesales.com's Bishop, who says CTOs have a lot to look forward to: "It seems to me that as technology becomes even more ingrained in our increasingly complex world, the CTO role will be ever-changing. Those who manage to build a dynamic and dedicated team around themselves, will be constantly learning and constantly challenged."