Chief technology officer: What does the title stand for?

With IT usage's changing dynamics, the chief technology officer (CTO) designation has seen substantial change (and lesser allure). So what does it mean now?

Today, it's common to find that the designations of chief information officer (CIO) and chief technology officer (CTO) are ill-understood in India. This is because the relevance of a CIO or CTO is entirely contextual. Their roles depend on how much the company is driven by technology. The CIO functions more from a management point of view, while the CTO focuses more on technology management.

The CIO has to manage internal data and resources (IT infrastructure and systems). It's common to find that the present day Indian chief technology officer is more product- and customer-focused, as well as externally-oriented (vendor and customer). The CIO and CTO complement each other; the CIO translates the business need to the CTO. The task at hand decides who the boss is. Says Pramod Krishamurthy, CTO of Birla Sun Life Insurance, "Considering the inclinations, the one who is typically closer to the business invariably gets more of the power that comes along with decision-making. Thus, the CIO has a slight edge in a user organization. In a software organization, a CTO would have the edge because he is typically user-facing."

We need to look at user organizations and software organizations to better define the role of the chief technology officer. In an organization, the chief information officer is business-inclined and tries to define what needs to be done, converting the business need to the business strategy. The CTO focuses on how this gets done. He decides whether to build (develop) a technology or to buy it. He is also concerned with how this fits in with the company's systems landscape. Therefore, a chief technology officer has a more prominent role in product development companies than in user companies.

In user organizations, the chief technology officer helps to provide for the business need. Mohan Chandrasekaran, the CTO of Reliance Life Insurance, gives an example to illustrate the point. "We have experienced tremendous growth in customers from 1,00,000 to more than 3,00,000. They use our call center service. Previously we had 3,000 staff, but now, catering to this growth would have multiplied the staff three times. Instead, the customer is provided better service through automation, where systems take 80% of the decisions."  

A chief technology officer has command over the technical leadership. If there's a fair amount of development being done in-house, then people management skills also gain importance along with vendor management skills. Notes Atul Kumar, the president and CTO of Ispat Group, "Domain knowledge is very important for a CTO. Along with the technology, he has to keep abreast of the business need too."

In case the CTO is absent, the CIO will provide options and look for outsourced solutions in most Indian organizations. Technical knowledge is available from vendor organizations and outsourced partners, but a business bent of mind cannot be purchased—so the CIO may be preferred. However, Chandrasekaran differs, "One cannot say that a CTO is not required if outsourcing partners are available. Outsourcing comes into the picture for better management of processes and data."

New technology has the CTO's attention —not that of the CIO. Due to this aspect, many Indian companies find it a cost-effective option to overlap these roles. Technical competence is the mark of a chief technology officer. A synergy of the two is what many organizations are looking for these days, which is why in most companies the roles are merged.

Nevertheless, the chief technology officer's role is not becoming extinct. There is demand for them, but the supply is short. Since very few are available to become CTOs, the extinction rumor has started going around. Says Kumar, "If the spark of business comes to a CTO, I would say that the CIO role has no use. The problem is that CTOs are not participating at the management level; they are working only at the specialization level. Thus, it seems like they are not adding business value."

The problem is that CTOs are not participating at the management level; they are working only at the specialization level. Thus, it seems like they are not adding business value.
Atul Kumar
the president and CTOIspat Group

 The chief technology officer functions as the business IT alignment manager. He is not an expert in all technologies, but knows whom to assign which project and how to get the optimum from them. If the CTO lacks this, his technological inclinations could become a handicap, but, like the CIO, there is no need for him to know all the business aspects.

A chief information officer without the expertise to roll out a technology would need a host of consultants; in such cases, a CTO is a must. And, an IT revamp necessitates the involvement of a chief technology officer. Explains Chandrasekaran: "I am not an expert in insurance, but I have a business analyst to provide me with the info that I need. I can contribute by putting a technology for automation and identify business project agreements. This helps because more people need not be recruited and we could expand faster."

After making investments in technologies, the need for return on investment (ROI) is enormous. To ensure this, a CTO is needed. For example, technology has a very important role to play in process manufacturing. So the CTO's role is critical in functions like these. Since there are multiple technology providers today, there needs to be someone with a good understanding of the technologies to be able to contribute to and develop the company's systems.

Of course, IT is a very diverse field, and even a CTO would not be able to be an expert in all the available technologies. This necessitates a tower-based approach, with the involvement of various specialists in the IT team. Also, a synchronized manner of working needs properly interconnected systems.

Enterprise architecture will be a key element in this. If all the systems are interconnected, the role of technology is vital. In this context, integration is a key element of the automation journey to manage people across all departments. This brings into the picture a chief technology officer's expertise, and this makes the position indispensable. So yes, the CTO role is here to stay—and for quite a while.

Read more on CW500 and IT leadership skills

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