Why Your Business Needs One
The role of a Chief Information Officer (CIO) has become more and more crucial as organizations step out of the business market landscape transformed by the COVID-19 pandemic and into the future. Digital transformation has accelerated in the last few years, and many companies have failed to keep up with the demanding pace. One reason is that they neither have a CIO or those that have do not have the time or ability to acclimate organizations to the rapidly changing market. Enter the Virtual Chief Information Officer (vCIO). The definition of success for any organization must include technology at the forefront if they aim to meet business objectives and thrive for decades to come. Leadership which includes a strong CIO is a necessity. Does your business have one on your staff?
Managed IT services providers like ProStratus provide effective Virtual Chief Information Officer (vCIO) services, guiding businesses to take proactive steps toward balancing technology and business priorities. By leveraging the expertise of a managed IT security provider, you can benefit from highly customized and up-to-date strategies that grow your business, mitigate risk, bring goals and technology into alignment, enable solid investments, and set up your organization for the future.
The continued adoption of virtual CIO services has elicited a comparison between full-time in-house CIOs and Managed Security Service Providers (MSSP). For some organizations, virtual CIOs have been a business-saving response to a growing need and admitted lack of resources for an executive-level addition. For others, they are a means to leverage diverse expertise and an opportunity for expenditure reduction, among other benefits. This article delves into the demand of post-pandemic digital acceleration, the role and key responsibilities of the virtual CIO, and their benefit to organizations driving growth.
What is a Virtual Chief Information Officer (vCIO)?
The Chief Information Officer (CIO) role was introduced in the 1980s to bridge the gap between business needs and IT resources. A CIO is an individual equipped to discuss strategic issues, market trends, and business processes, as well as cloud vs. on-premise systems, performance monitoring, and cybersecurity. With advancing technology and a global shift in business models as a result of the pandemic, a Virtual Chief Information Officer (vCIO) has been utilized more than ever.
A Virtual Chief Information Officer (vCIO) is a service offered by a managed security service provider (MSSP) that provides businesses with consultation for technology strategy, including implementing strategic IT goals, managing IT strategy, and budgeting.
IT strategy has become increasingly essential to the growth and continued success of any business. It is no longer sufficient to simply adopt a piece of tech or system to fulfill and manage your current business needs. Companies need forward thinking in technology strategy to drive business for the next year, next five years, etc.
Businesses will save time and resources by utilizing the vCIO services provided by an MSSP rather than hiring an in-house CIO. And a ProStratus vCIO comes with our entire technology team’s combined knowledge and giftings.
How the COVID-19 Pandemic Accelerated Digital Transformation
Any good business plan must be flexible and adaptable to an ever-changing market and growth needs. A dramatic shift in the market occurred during the COVID-19 pandemic when quarantining necessitated that consumers turn toward online channels for their needs. In 2020 alone, online sales increased 43% or $244.2 billion from the previous year. This shift in consumer buying habits accelerated the digitization of companies’ supply chains and internal operations by seven years.
Rapid digitization of business processes has touched every operation, including IT strategy. The need for CIO skills increased exponentially during the pandemic as companies realized the power of digital transformation with their cloud-based services that allowed productivity in a time of crisis. According to Business Talent Group, demand for interim CIO and other related roles grew 83% between 2020 and 2021.
Businesses were looking to get more from technology, with global IT spending totaling $4.4 trillion in 2022, a 4% increase from the previous year. To do this, an experienced IT leader was needed, and vCIOs were able to fill that skills gap. The vCIO option may have been set up as one of many temporary solutions to meet the new and increasing demands on businesses during the pandemic. Still, it is expected to become a long-lasting, if not permanent, change. These changes are part of an effort for an organization to remain competitive in the current economic environment.
Why Are Businesses Utilizing Virtual CIO Services?
There has been a rapid uptick in the past few years of companies utilizing vCIOs to handle the balance between business priorities and technology. The set of companies primarily using virtual CIOs is small to medium-sized businesses, though companies of all sizes can benefit from vCIOs.
Businesses of all sizes recognize the importance of technology leadership, but small to medium-sized businesses might be slower to enter the recruitment market. Organizations that realize they lack a strategic view of technology at the executive level are looking to remedy that deficiency. The remedy is employing a vCIO to create a business-wide technology roadmap to align with their priorities.
Organizations can acquire strategic knowledge from an IT leader to ensure effective integration of their technology systems. A vCIO will also collaborate with senior managers to uncover opportunities for continued innovation. Best of all, this work is done on a consultative basis, saving the large expense of an in-house CIO.
What Are the Responsibilities of a Virtual CIO?
A technology leader advises, guides, and strategizes the future of a business toward growth, efficiency, and increased productivity. A vICO should have a thorough knowledge of business use of technology beyond business applications, compliance requirements, and industry trends. They need to fully understand each organization’s specific business purpose, model, and use of technology.
The vCIO acts as a liaison when businesses contemplate implementing new technology. They are tasked with considering infrastructure requirements, expenses, downtime, and scope of work to determine the value and prevent unforeseen issues. The vCIO’s key role includes the following:
- Strategy and Budgeting
- Technology Alignment
- Business Goals
- Technology Plan and Roadmap
- Opportunity Cost
- Standards and Alignment
- Strategic Roadmap
- Business Risk
Strategy and Budgeting
Effective IT strategy and budgeting involve concrete business investments in tech and providing an avenue for the business to gain an understanding of the value of IT to the organization. Successful strategy and budgeting involve tactics like IT show back, IT chargeback, and service-based costing. The COVID-19 pandemic showcased a great need for business resilience. It necessitated that qualified virtual CIOs become proficient at zero-based budgeting techniques to justify IT budget, IT expenses, guarantee cost transparency, and provide space for business responsiveness.
The role of the vCIO is to justify business changes, including how the investment will benefit the organization. Additionally, once the change has been approved, the role is to ensure that it has been properly implemented and is made effective. When seeking technology alignment for an organization, there are several factors that the virtual CIO must consider, like understanding the problem, how it affects or if it affects everyone, providing a solution, defining impact, and identifying which issues are related to technology or specific to the business.
IT isn’t just the machinery that can power a business but also an enabler of growth and innovation. The virtual CIO is entrusted with creating strategies to meet business goals. All IT strategies should be focused on creating a competitive advantage in the business marketplace, fueling expansion, improving products, services, and customer experience, as well as organizational performance and efficiency.
Technology Plan and Roadmap
Before a plan or roadmap can be created, the virtual CIO must first identify the needs of the organization and identify the needs of the workforce. Once that assessment has been executed and the necessary information collected, the vCIO can move forward with transforming IT strategy into an agenda. Road mapping involves concisely articulating IT strategy for stakeholders, using that to define a set of goals or priorities, translate those goals into measurable objectives, and develop a set of metrics and KPIs to evaluate performance.
Opportunity cost isn’t just about system processes for the overall cost of purchasing and implementing; it’s the cost of missed opportunities that comes with taking one action over another. That cost must be included in all financial assessments related to business decision-making.
Analyzing the precise opportunity cost associated with an organization’s existing IT assets requires complex computations involving an exhaustive review of all IT cost centers, profit centers, and generated revenue.
To conduct this assessment there are many considerations, including production possibility, how technology affects productivity, determining if the current technology is disadvantageous, determining future competitiveness of the technology, and the costs associated with keeping or replacing existing technology.
Standards and Alignment
Business-IT collaboration is imperative for the success of any organization. An effective IT leader doesn’t just concern themselves with departments and lines of business using IT products and services but the success of every department and the organization as a whole. Maintaining standards and alignment means developing, implementing, and updating organization-wide IT standards. It also entails balancing innovation and maintenance, generating the maximum value from IT assets, reducing the gap between IT strategy and business objectives, and ensuring compliance with operational standards.
Strategic road mapping can be a difficult and time-consuming task. The objective of IT strategic planning is to provide clear direction the organization can take action on. Virtual CIOs must utilize business strategy to map out the strategic planning process. Strategic planning or prioritization includes establishing strategic IT objectives, aligning IT approach with business objectives, structuring actionable steps, creating and documenting a strategic plan, and clearly communicating said plan to garner support.
Risk management is an integral role of the virtual CIO and plays a pivotal part in the success of an organization. Risk management and information security have become more laser focused since the digital transformation acceleration of the pandemic. The objective is to find more reliable, risk-related data, better identify materializing risks, and align risk-related elements with business strategy.
This process involves protecting customers and employees from outside interference and themselves, as well as accelerating cloud migration, securing remote work infrastructures, utilizing artificial intelligence solutions, creating a standard structure for AI governance for privacy purposes, etc.
Benefits of Investing in Virtual Chief Information Officer Services
With continued global tech advancements, IT service management may become increasingly complex. Organizations that fail to properly implement expert IT leadership will get left behind in the race for success. Virtual CIO services will take the reigns of your organization’s IT management and ensure your IT infrastructure is working to achieve your business objectives.
Aligning Technology with Business Goals
A business without CIO competencies isn’t always able to identify if its IT environment is working in conjunction with its business objectives. Employing a virtual CIO can save you time and resources in the day-to-day management of your IT environment. Gaining an understanding of your IT environment will assist in assessing your business goals and customizing recommendations to best suit your objective.
Flexible IT Solutions
Employing a virtual CIO for your IT needs is a flexible service option that gives you control over how much or little assistance your organization receives. Hiring a third party, as opposed to a full-time, in-house CIO, will provide greater objectivity within consulting without pressure from internal politics.
Hiring an MSSP to provide virtual CIO services will allow your senior managers to focus on their operational tasks and increase their productivity while an expert handles the complexities of IT management. While the vCIO does work in collaboration with senior management, it is their responsibility to handle analysis, staff planning, IT budgeting, risk management, etc.
The business market is an ever-changing landscape, as evidenced by the pandemic. With a virtual CIO, your organization has years of expert IT experience and greater knowledge of a broad range of IT technologies and platforms at your disposal. They can advise and provide direction through the changing market with best-practice solutions that will help your organization remain relevant and improve business results.
Protecting your organization’s critical data from cyber-attacks and natural disasters is a key component of managing IT risk. Instead of complicated “tech speak” typically associated with tech staff, a virtual CIO has knowledge of technology and business practices and is able to convey, in plain language, the legitimate value of IT projects and their associated risks. It’s the best of both worlds, with clear communication on objective benefits and technical details.
Drive Successful IT Projects
One of the biggest benefits of hiring a virtual CIO is leveraging the expertise they acquired through previous successful IT projects. Driving IT projects to completion while simultaneously managing budgets is a skill set your organization could use to achieve your business goals and objectives efficiently and confidently.
A broad range of expertise is required to properly navigate and manage modern IT systems with all their complexities. Employing a virtual CIO comes with peace of mind that you can to turn to them for guidance through various problems. A qualified vCIO should be able to provide direction on managed security services, managed cloud services, hardware/software procurement, and data backup and disaster recovery plans.
A virtual CIO allows you to benefit from their expert IT services, planning, management, and support without needing to pay for a full-time senior-level IT executive. A vCIO will work in the best interest of your organization and empower your business to be successfully competitive in your market.
How Cost-Effective is it to Adopt a Virtual CIO?
There are many benefits to utilizing virtual CIO services in place of a full-time in-house CIO. Regardless of the avenue, the role itself is integral to mitigating financial losses of new technology adoption, antiquated existing technology, or misalignment of technology to attain business objectives. Understanding the cost-effective value of a virtual CIO would require looking at the cost of an executive-level in-house CIO.
The average salary of a full-time executive-level CIO is between $100,000-$175,000 a year. Those figures do not include the additional cost of benefits like healthcare, 401k, stock options, etc. It’s also important to take into consideration that industry and geography would sway those figures significantly.
Since the vCIO is not a full-time employee with benefits, the cost could be significantly less. What would help determine the cost savings of hiring a vCIO is the scope of their involvement in your organization. For example, if you employ vCIO services for your business to validate progress with annual summits, quarterly reviews, or status calls, then costs could be 10% of the full-time salary cost. Even with more operational involvement, it is still a contract position, so it’s the difference between a paid salary with benefits and an hourly or flat fee without benefits.
A virtual CIO provides all the same resources, expertise, and benefits as a full-time, in-house CIO at a fraction of the cost. Incorporating an IT leader into your organization will ensure its success in the current business market landscape and for decades to come, making your technology systems work for you and not against you.
By outsourcing your vCIO needs to ProStratus, you can be assured of a diverse range of expertise that will take your organization to the next level. Contact us today to learn more about our Virtual Chief Information Officer services and other IT services.