The story of fractional CTO: How to become one, who should hire them and why

A fractional CTO position explained in one sentence would be – an external, part-time contributor who brings the needed technical expertise, risk mitigation, and cost-effective team management, working for a fraction of the time and cost as opposed to a full-time CTO. More precisely:

Fractional CTO helps you build the tech strategy and the corresponding roadmap while being flexible – allowing you to scale up or down your technology resources, and cost when necessary.

Hadzi-Djordje Karolic, Fractional CTO

We spoke to Karolic to hear his unique perspective on why the CTO is a catalyst, bridging the gap between technology and business objectives, and when and why companies benefit more from hiring a fractional CTO than a full-time one.

Hadzi Djordje Karolic also shares the career path that led him toward the fractional CTO position, as well as why the demand for these experts has been increasing lately in the industry.

Djordje, to begin with, tell us a little more about yourself. How and in what way did your tech career start, and how did you become interested in technology and programming?

Karolic: I’ve always been fascinated with technology and history – from the times of the pyramids (and theories of how they were built) to more modern times of the Manhattan Project and NASA’s lunar landings.

The part that made me curious the most was – how all that stuff works. What makes an engineer an engineer? What challenges did engineers need to face and overcome to create the systems to allow Apollo 11 to land on the moon successfully?

Is it just the education and the sciences, or is it more of a mindset, really? These are the things I’m still working on figuring out, and it is a topic of a lifetime of study. My tech career started in 1998 at a modest help desk in one of the fledgling Internet Service Providers in Belgrade, Serbia, where I learned the basics of telco computer hardware (switches, routers, RADIUS servers, etc.) and the software that runs them.

From there, my career went to explore the range of Cisco network products (the early 2000s) as a network admin, then various server solutions (Microsoft, Siemens, and others) for retail and logistics companies as an implementation specialist (and later support coordinator).

Later, I moved to the manufacturing world in 2011 to participate in a car factory startup, where I managed and supported the first successful implementation of the Siemens MES platform in the automobile industry. From there, it was a path of ever-increasing responsibilities in senior tech roles, mainly in global manufacturing and eCommerce/logistics companies.

The path to the role of fractional CTO

What was your path to the position of fractional CTO, and what knowledge and skills should an employee have to be in this position?

Karolic: Vocational studies gave me the foundational education that launched me into the world of Tech; the myriad of challenging roles and responsibilities in high-growth & fast-paced environments did the rest.

The mindset of constant learning is necessary for an employee to be successful in this role, as is the ability to be customer-oriented and have the willingness to exit the ‘all things Tech’ attitude to intense dive into the processes and everyday problems of other departments in a company.

Only when we identify the root cause of issues and problems and learn in detail the bottlenecks (tech and non-tech alike) can we drive the solutions, therefore, drive growth and success in an organization. Once you have learned to do that internally, you can start doing it for the clients, adding value and making a difference every time. 

Fractional vs. full-time CTO

What exactly is the role of a fractional CTO in the tech world, and how does it differ from the available CTO position?

Karolic: Compared to the general CTO position, a fractional CTO is a “part-time CTO” who usually manages only a specific part of the tech scope, or provides an on-demand service(s) to the organization.

Fractional CTO also brings a wealth of knowledge and experience that is not necessarily attached to the current tech stack or the industry of the company; they can look outside the box, play the devil’s advocate of sorts, and really see things for what they are, without being too much distracted by the details (forest to the trees).

How do you become a fractional CTO

Is there any special education for this position, and what does it look like?

Karolic: Since it’s a reasonably novel position, there needs to be vocational education in a traditional sense. Math, computer, or electrotechnical studies certainly help build the foundation, but it is not a given. It is a very particular set of skills – a result of an accumulated experience in tech roles over various roles in different industries. Some of the critical skills are:

• Ability to understand the complexities of various technologies
• To be able to identify the processes and recognize the patterns
• Know what the current regulations or industry standards are, and work with people from different backgrounds (tech and non-tech alike)
• Have the capacity and capability to process all the relevant data swiftly, and quickly identify the “pain points”, and what would be the most cost-effective solution to solve them, with a corresponding roadmap to achieve that

Why do companies hire a fractional CTO?

Is there an increased demand for fractional CTO in the IT industry, and if so, why is this happening?

Karolic: There is an ever-growing demand for fractional CTOs in the IT industry, mainly in tech startups that benefit from the experience and guidelines that fractional CTO can help establish and drive the baseline processes they need in their current phase.

Fractional CTOs are also sought after by the smaller companies that are not monolithic by design and are agile in their day-to-day operations; as opposed to that, many Managed Services Providers companies heavily rely on established processes and procedures where no deviation is allowed. MSPs might hire a Fractional CTO to support/drive tech for one of their key clients, but that’s about it.

Fractional CTOs are also frequently hired to augment the existing CTOs in more complex transformational IT Projects, where they manage part of the scope (ramping up a scale-up phase or implementing a new framework, for example) or a Merger/Acquisition project itself in more traditional industries (banking, energy companies, etc.).

What are the concrete benefits of hiring a fractional CTO?

Karolic: Fractional CTO helps you build the tech strategy and the corresponding roadmap while being flexible – allowing you to scale up or down your technology resources, and cost when necessary. Hiring a full-time CTO can be costly and time-consuming. A fractional CTO can bring the needed technical expertise, risk mitigation, and cost-effective team management, working for a fraction of the time and cost as opposed to a full-time CTO.

A fractional CTO can also lead a project or a program that does not require a full-time CTO. As mentioned before, fractional CTO also brings objectivity – the ability to assess the team performance or pros and cons of the current tech stack/environment and help identify the best path forward (or help reduce technical debt) while building the executive proposals, ROIs, roadmaps, and all that is necessary.

Fractional CTOs also usually have extensive professional networks, helping find the seasoned tech professionals with needed/specific tech stack experience far more accessible than the traditional HR/IT recruiting pipelines.

The challenges of the position

Tell us, what challenges you face in this position and how you overcome them?

Karolic: The technology lifecycle is becoming shorter and shorter, with new technologies emerging daily. As technology ages, engineers often want to rebuild a product from scratch (for example, when the product needs to be more scalable). This decision can impact multiple teams that rely on that product.

In many cases, this approach is no longer viable as it could significantly impact the company (if the product is internal) or the revenue base (if the product is client-facing). This is where the “build vs. buy vs. partner” approach needs to be taken. Another challenge is having cross-functional siloed teams competing for the limited resources available.

Then we have roadmap challenges where product and engineering teams need to understand (and agree on!) what we should build next and in which order. And the biggest challenge of them all: a fractional CTO is often seen by the tech team as an external consultant of sorts, brought on board by the leadership team (or non-tech owners of the company) due to their mistrust of the current tech team.

Dispelling that notion and helping Tech teams utilize the fractional CTO as their representative, effectively communicating the challenges, scope requirements, and resource needs to the leadership team or the board can be a huge win and a potent confidence builder.

The only constant is change

Does this position represent the future of tech leadership?

Karolic: It certainly does, for specific companies (startups and smaller enterprises) – the ability to control and scale the engagement, focus, and cost of tech teams and engineering roadmaps while dramatically improving time to market in product development.

More traditional companies or large-scale enterprises would find this approach too disruptive for their current operations, but the only constant in this world is – change. We all know what happens to companies that refuse to adapt. 

What are some of your professional plans for the next period?

Karolic: Continue building the awareness of the optimal Technology and Fractional CTO benefits to the startup ecosystems and companies that want to stay efficient and help more companies make what they set out to achieve. I also plan to get more involved in the local Tech Hubs that nurture and support the next generation of Tech startups.