NeuEon Insights / Business & IT Strategy, Leadership & Team Management

Virtual CIO or Fractional CIO: That is the Question

At NeuEon, we get asked this question all the time, “What is the difference between a Virtual CIO and a Fractional CIO?” Is it just semantics or are they truly different?

A Virtual CIO (VCIO) is a term coined by Managed Service Providers (MSP) to provide guidance on what hardware, software and services the client should use as it relates to the technologies used and sold by the provider.

Over a decade ago, we coined the term Fractional CIOTM, based on the concept of fractional jet ownership. We realized that VCIO just didn’t fit with what we bring to a client – part-time/on demand Chief Information Officer services to organizations that do not have a CIO.

Not only are the terms different – so are the services and the people that deliver them.

By design MSPs setup to provide services as value added resellers (VARs).  This means that for products or services they sell, they are paid a commission on that product or service by the original equipment manufacturer (OEM)… OK had enough Three Letter Acronyms (TLA) yet?    Therefore if your VCIO is telling you what to buy and getting compensated for that recommendation, it is inherently a biased recommendation.

A Fractional CIO, by contrast, is paid by you, the client, to be objective and give advice and recommendations that are in your best interest.  A Fractional CIO can look across industries and vendors to understand and select the best technology to meet your business objectives.   Typically a Fractional CIO has done the CIO role in previous companies or have equivalent years of strategic management experience.

A Fractional CIO can also help design an IT organization that is right for your business.  That may mean a completely outsourced model for all IT support needs – either building an in-house team or a hybrid approach.  Each situation is different and should be in line with your business strategy.  If the technical staffing mix includes in-house resources, a Fractional CIO can provide mentoring to your more junior staff members.  By definition if you’re a “C” anything you probably have 15+ years experience and have learned how to help staff members with their career path and direction.

Another critical function of a Fractional CIO is vendor management.  This includes all the vendors in your technology portfolio, Internet Service Providers, Infrastructure as a Service, broadband vendors and Managed Services Providers.

Sometimes they have to fire vendors for non-performance… this would be an uncomfortable conversation to have with your “VCIO”.

For many of our clients, bringing an objective viewpoint is critical as the internal C-team is looking for new ways to leverage technology and make sound business decisions on technology investments that make strategic sense. Even though both a Virtual CIO and a Fractional CIO are by nature “part time”, having this role act on behalf of the best interest of the business is what the role should be about.