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App Development
6 minutes read

Virtual CIO Explained

By Robert Kazmi
By Robert Kazmi
App Development
6 minutes read

Virtual CIO services have grown in popularity recently as digital transformation drives growth and competition. Many businesses find that a virtual CIO offers them fresh perspectives and unmatched technical expertise. 

All modern businesses use software and have IT needs. However, many companies don’t know how to develop a comprehensive IT strategy or digitize their business processes. A Chief Information Officer (CIO) handles everything related to an organization’s IT infrastructure. 

This post will explain what a virtual CIO is, how it differs from a traditional CIO, and the benefits of vCIO services. 

What Is a Virtual CIO? 

A virtual CIO (vCIO) is a company or individual contractor that acts as a company’s Chief Information Officer on a flexible basis. Typically, vCIO services are contracted through an IT consulting services company. A virtual CIO performs all of the tasks a traditional Chief Information Officer would typically perform, including:

  • Developing an IT strategy  
  • Developing an IT budget 
  • Maintaining current IT infrastructure
  • Analyzing and optimizing business processes 
  • Identifying opportunities for innovation
  • Facilitating technology changes 

A vCIO works closely with an organization’s IT department. Many businesses that employ vCIO services have limited IT resources or lack a formal IT department. Companies may grant a virtual CIO more decision-making power and technology deployment responsibilities in these situations. 

If you are familiar with managed service providers (MSP), you might think that a virtual CIO sounds very similar to an MSP. However, they are different in scope. MSPs typically focus on technology service delivery. On the other hand, a virtual CIO offers a broader service that aligns business goals and IT strategy. 

Virtual CIO consulting services will be most beneficial to small to medium-sized businesses (SMBs) that don’t have the resources to manage large IT projects, such as digital transformation, on their own. vCIO services offer businesses technical expertise to help improve organizational IT strategy at a more manageable price point. 

How Does a Virtual CIO Differ From a Traditional CIO? 

If a virtual CIO performs the same tasks as a traditional CIO, how do they differ? This is a good question, and it will be helpful to explore the answer for companies trying to determine which option best suits their business goals. The main differences between a CIO and a vCIO are:

  • Employment 
  • Hiring 
  • Cost 
  • Responsibilities 

Employment 

The primary difference between vCIOs and CIOs is employment status. CIOs are full-time executive-level employees, and vCIOs are contracted service providers. vCIOs can have multiple companies that they work for. The chances of a vCIO having multiple clients increases when they are a service company versus an independent contractor. However, even independent contractors that offer vCIO services can have multiple clients. 

Hiring  

CIOs are hired through traditional recruiting and hiring channels, but a vCIO is typically contracted through an IT consulting firm or MSP. Many MSPs or consulting firms may informally market themselves as a vCIO to their smaller clients. So don’t be surprised if your consulting partner offers vCIO services but doesn’t advertise them officially on their website or other marketing materials. 

Cost 

Hiring a traditional Chief Information Officer costs more than contracting vCIO services. A CIO is an executive-level position. Executives are generally well-compensated in salary, profit sharing, and additional benefits like healthcare. In addition, the cost to hire an executive like a CIO is greater than contracting services from a provider. A virtual CIO requires no added benefits and their prices are typically negotiable. Usually, vCIOs charge a flat monthly fee or an hourly rate. 

Responsibilities 

vCIOs and CIOs share the same responsibilities. However, how they approach their responsibilities will likely differ. The difference in approach can be attributed to internal relationships and politics. For example, a CIO will have intimate, daily contact with business leaders and employees. As a result, they will understand the organization’s internal politics and decision-making dynamics. 

A vCIO will not have the same level of internal insight. However, this lack of insight can offer fresh perspectives on product discovery or product design tasks. It is easy for companies to get stuck thinking about things in one way. Sometimes the best way to get a fresh perspective is to work with someone outside of the organization. 

The Benefits of vCIO Services 

The primary benefit that most businesses will see is cost savings. Virtual CIOs can help organizations save a lot of money, and while this is a great benefit, it is far from the only one. Beyond cost savings, the benefits of vCIO services include: 

  • Availability
  • Objectivity 
  • Expertise 
  • Speed

Availability 

Typically, vCIO services are provided by a company instead of an individual. In most cases, a virtual CIO will provide 24/7 availability. vCIO providers can offer 24/7 availability because they employ a team of consultants. A traditional Chief Information Officer is only one person and cannot offer 24/7 availability. If your business operates at odd hours, around-the-clock availability will be a huge benefit. 

Objectivity 

Objectivity and fresh perspectives are significant benefits of a vCIO. It is too easy to get caught up in internal politics and organizational thought patterns when working in a company. A virtual CIO can bring your company an objective perspective on legacy technology and strategic priorities. 

Expertise 

Since many vCIO services are provided by a team of consultants, businesses benefit from a higher level of IT expertise. Hiring and maintaining an IT team is expensive, but with a virtual CIO, businesses have access to a broader depth of IT expertise. vCIO services provide SMBs with more IT value for their budget than hiring a traditional CIO. 

Speed 

Hiring and onboarding a CIO is not only an expensive process but also a time-consuming one. However, a virtual CIO can be hired and get to work faster than a traditional CIO. If time is of the essence, and for many businesses it is, vCIO services get to work quickly. Don’t waste valuable time looking for the right CIO candidate. 

Final Thoughts 

While hiring a virtual executive for your business might seem like a bad idea, there are several good reasons why you should consider hiring a virtual CIO. SMBs can get unmatched value and IT expertise from vCIO services as compared to hiring a traditional CIO. If you want to learn more about vCIO services and the value a virtual CIO can provide your business, speak with an app development partner.

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