The digital transformation evolution of business today, means IT is one of the most crucial components that power your business. Nearly 40% of cyber-attacks happen on small businesses, a sharp increase from the 18% in 2011. Given the threat all businesses face, the small to medium sized are at a much higher risk. Technologically speaking, they either overlook or invest less towards security enablement. Perhaps both, while often assuming the risks are in check, when in fact they may be the most vulnerable.
This is where a vCIO comes in.
What is a vCIO?
A vCIO (virtual Chief Information Officer) is a person or an entity that consults as a technology strategist for a company. This is either because there is no in-house CIO, CISO, or other IT strategist or the existing team could benefit from added expertise.
Every business is reliant on some form of technology today. Organizational success requires strategic conversations inclusive of IT enablement of GRC (Governance, Risk, Compliance) and business portfolio achievement. While IT departments keep the engines running, their roles are not always defined to integrate business goals and organizational roadmap. These reasons are why the CIO job emerged.
The role of a CIO was first formally created in the early 1980s. It evolved rapidly in the decades since from managing IT to leveraging technology to create strategic business value.
The rise of vCIO
It is expensive to hire someone to take care of just IT and strategy. Glassdoor data suggests that the average salary of a CIO is around $169,669 based on anonymous submissions. Other sources report similar figures. While a CIO is invaluable to the business, many either don’t justify the need or cannot afford one full-time.
A vCIO is gaining traction as a cost-effective choice, especially for the small to mid-sized companies.
With the onset of the 2020 pandemic, the trend towards vCIOs has accelerated. As companies hastened to change their business models to the new work from home (WFH) landscape, they found themselves lacking in the abilities to do so quickly and effectively. These lessons learned have proved the need for strategic focus and prompt decision making to adjust when external factors not under the company’s direct control transpire.
Responsibilities of a vCIO
The role and contribution of a vCIO may vary for each business. The following is a list of the most common functions.
Create and align IT strategy and roadmap
The primary function of a vCIO is to strategize and align the company’s IT plan and roadmap with its business goals to achieve sustainable growth.
- Understand core business processes and their integration.
- Align the IT products and services with the company’s vision and goals.
- Provide insights about the company’s IT portfolio.
- Assess and identify gaps in multiple areas such as: people, process, automation, technologies and sourcing for example.
- Spearhead new IT initiatives.
- Prepare the business for technology changes.
Allocation of resources and budget
vCIO would contribute to IT budgeting, allocation, and management of resources.
- Centralize and consolidate the company’s IT resources.
- Ensure efficiency in the tactical allocation of internal resources.
- Justify sourcing models for best fit.
- Plan or assist in creating the IT budget.
- Avoid unnecessary IT expenditures.
- Provide data-based justified cost control strategies.
Monitor and improve IT infrastructure
- Track and report technical performance metrics.
- Review IT vendor performance and suggest improvements.
- Resolve the inefficiencies in technological infrastructure.
- Assess and report on IT infrastructure, network health, security compliance and more.
- Update or replace outdated programs and software for efficiency and security.
Security and risk management
A vCIO is responsible for proactively monitoring and securing the company’s networks and overall IT infrastructure. Risk assessment, management, and mitigation is also a core responsibility.
- Evaluate the impact of technology changes on the business value stream.
- Provide robust solutions for cyber security and data protection.
- Design and implement an IT disaster recovery and business continuity plan.
- Prevent cyber-attacks, data breaches, ransomware and other threats.
- Create a data backup and recovery plan for business continuity.
- Proactively monitor and secures the company’s network and overall IT infrastructure, data and other assets.
Benefits of working with a vCIO
The primary reason to hire a vCIO is that it enables a business to be proactive and future focused. They keep up with the trends and best practices in IT and allow you to benefit from their insights. In action, this means:
- Guidance and leadership: IT depends upon decision-making and strategizing at an executive level, making a vCIO an invaluable addition to the C-suite.
- Business impact: vCIOs understand the business significance of technology and leverage that to drive positive business impact.
- Risk management: Companies outsource risk management to decrease exposure by onboarding vCIOs.
Does your business need a vCIO?
There are two important factors to consider while making this decision: Cost and value. We will detail the value of bringing in a vCIO in different cases and leave the cost-benefit analysis to your business discretion.
1. You’re a small company and expect not to need one
In our experience, most small to medium sized businesses (SMBs) benefit from working with a vCIO, sometimes even more than larger ones. Innovation to compete is the SMB’s driver and the pace of growth requires them to stay ahead of the digital curve. This will require a CIO’s expertise and guidance.
2. You already have a CIO
Companies that already have a full time CIO can also benefit from a vCIO, typically seen in the case of medium to large organizations.
A vCIO is brought in for objectivity, external perspective as well as industry-specific expertise, and exposure. They usually handle standalone parts of existing projects or for designing and implementing strategies for new ones. The following are some of those requirements:
- Implementing security improvements
- Driving a tech migration
- Making infrastructure changes
- Consulting for network analysis
- Creating a risk assessment
3. You work with an MSP
Many MSPs (Managed Service Providers) focus only on technology services that are mainly tactical and operational in nature. vCIO role requires the addition of strategic support. The differentiation is important because a vCIO serves as a higher layer of support, unlike MSPs which may focus on projects, operations, implementation, and execution.
Companies that work with their MSP for operational IT may still need to bring in and onboard vCIOs for business alignment and IT roadmap.
Hiring a vCIO that can drive business outcomes
Know what to expect
A positive and productive relationship between the vCIO and the decision-makers is crucial to the success of the company. A vCIO should have:
- Technical expertise in IT systems, network security, data systems, and cloud.
- Business acumen to envision and implement IT strategy.
- Interpersonal and soft skills to successfully navigate the corporate environment.
vCIO service versus individual
There typically are two ways companies can recruit a vCIO: an individual consultant through the traditional channels or a vCIO service with MSPs. Each comes with its pros and cons.
Working with an MSP is a comparatively cost-effective way to hire resources to keep tech infrastructure and business running smoothly. Business owners can partner with a MSP to avail vCIO expertise anytime as MSPs usually employ a team to provide high availability. On the flip side, companies may not have a direct choice in selecting the vCIO assigned for them. Asking the right questions of a MSP will appease these fears. Good MSPs with vCIO as a service intend to gain deep knowledge of you and your business by building a solid relationship as a seamless member for team.
Alternatively, hiring an individual vCIO as a contractor is another possibility. Although the advantage is hand select the vCIO there are other disadvantages. If that person leaves you when the contract expires or you made a poor selection, there is no back-fill and you start all over again. Also, hiring an individual contractor is a lengthy process to advertise, interview, and select. Do you even know what criteria to use? The individual contractor approach would be more costly than a MSP with vCIO as a service. If you only require the help of a vCIO temporarily or if you are in a real “niche” industry the independent contractor approach might be a good fit.
Factors that influence a vCIO’s pay
Like any other service, the pay of a vCIO depends on the experience of the professional(s). According to Payscale, an entry-level vCIO earns an average compensation of $99,143 (including benefits and bonuses) while those with 20+ years of experience tend to earn twice that figure.
Industries like technology, financial services, healthcare, and manufacturing have a high demand for tech talent and as well high salaries. The same follows for CIOs. For instance, CIOs and senior IT executives earn a base salary of $235,806 in 2018.
- Payment model
You can work with a vCIO on a consumption or on-demand basis at an hourly rate. This is beneficial for businesses with varying levels of required service. For companies that need ongoing vCIO support a retainer or subscription model works better. The flat-fee approach is similar to the MSP model or as a part of the package.
AKAVEIL Technologies LLC for instance, bundles vCIO as a service with other MSP services so companies can stop worrying about unknown costs and high rates. They will also partner with you to ensure a consolidated team approach and working relationship.
Not sure what works best for you?
If your company is in need of IT strategic alignment, a vCIO is almost always the most effective means to do so, in terms of cost and benefit. While some companies prefer to onboard individuals, we recommend hiring via a MSP like AKAVEIL. It reduces the risks associated with the process, such as availability and finding the right fit.
AKAVEIL experts specialize in Microsoft Azure cloud architecture, virtual solutions, as well as traditional data centers, servers, firewalls, network design and management, business continuity, cybersecurity, support, monitoring, maintenance, consulting, project management and more. If you’re not sure how to proceed, we are here to help! There is no cost to talk with us and see what we can do to assist you. get a consult today!