What is a 'Chief Technology Officer - CTO'

A chief technology officer (CTO) is the executive in charge of an organization's technological needs as well as its research and development (R&D). Also known as a chief technical officer, this individual examines the short- and long-term needs of an organization, and utilizes capital to make investments designed to help the organization reach its objectives. The CTO usually reports directly the chief executive officer (CEO) of the firm. 

BREAKING DOWN 'Chief Technology Officer - CTO'

A chief information officer (CIO) previously performed dual roles as CIO and chief technology officer (CTO). However, as technology continues to advance, there is a growing need to separate the CIO job into two roles to ensure a company's success. The CTO has a strategic planning role, while the CIO has a technology-focused role.

A CTO is the highest technology executive position within a company and leads the technology or engineering department. He develops policies and procedures and uses technology to enhance products and services that focus on external customers. The CTO also develops strategies to increase revenue and performs cost-benefit analysis and return-on-investment analysis.

Large companies with large budgets have either a CTO, CIO or both. Many large companies need both a CTO and CIO, while smaller companies have one or the other. The choice depends on the company's vision and budget. 

History of the Chief Technology Officer

The CTO title has been in use for over 10 years, but there is still confusion about the role and how it differs from the CIO. The title was popular with dot-com companies in the 1990s and then expanded to IT departments. The CTO role became popular as the information technology (IT) industry grew, but it is also used in other industries such as e-commerce, health care, telecommunications and government.

Responsibilities of the Chief Technology Officer

While research and development has been a component of businesses for many years, the rise of information technology (IT) and computers has increased the importance of the chief technology officer. Companies focusing on scientific and electronic products employ CTOs who are responsible for the oversight of intellectual property and have backgrounds in the industry. 

But the responsibilities and role of the CTO also depend on the company. There are typically four different kinds of CTOs, whose main duties may differ:

  • Infrastructure: This CTO may oversee the company's data, security, maintenance and network of a company, and may implement (but not necessarily set) the company's technical strategy. The CTO may also manage the company's technological roadmap. 
  • Planner: This type of CTO may envision how technology will be used within the company, while setting the technical strategy for the company. This CTO will also look at how to further implement new technologies within the company to ensure its success. 
  • Consumer focused: In this role, a CTO will act as a liaison between the customer and the business by taking on the responsibilities of customer relations, getting a grasp on the target market and helping deliver IT projects to market. 
  • Thinker: This kind of CTO will help set up the corporate strategy and fuel technological infrastructure, and will analyze target markets, and create business models. Additionally, the CTO will have a close relationship with the CEO and other members of the company's senior management. 

Outlook and Future of the CTO's Role 

The U.S. Bureau of Labor Statistics predicts that job openings for CTOs are expected to increase between 2012 and 2022. The continued growth of business conducted over information systems is the main cause of employment growth in this role. Rapid advancements in business solutions, and growth in mobile device usage and cloud computing usage, have also contributed to the expected increase in job openings.

In 2009, the White House announced the appointment of the country's very first CTO, whose main focus was to use technology to help stimulate job creation, to improve healthcare and security systems and to increase broadband access. 

Technology is moving away from physical assets and moving toward virtual assets using cloud technology, big data and the internet of things. Technology is focusing more on integrating applications, processes and data. To become innovative and stay competitive, CTOs must keep abreast of big data, streaming analytics and cloud technology.

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