Why Companies Are Turning to Fractional CTO Services

Demand for fractional CTO services is growing among U.S. companies grappling with AI adoption, cloud complexity, and tightening technology budgets. Latin America is emerging as a source of that executive talent and the model is gaining ground, but experts warn that clients who approach it purely as a cost-cutting measure may miss the point.

The fractional CTO model, in which a senior technology executive splits time across multiple clients, has existed on the margins of the IT services industry for years. As AI reshapes technology roadmaps and startups face pressure to do more with leaner teams, companies that once couldn’t justify a full-time CTO are finding they may no longer afford to go without one.

Alberto Francis, chief executive officer and founder of Black Birch Group, said that one of the misconceptions clients bring to the table is that this is simply about saving money on a salary. Assembling a fractional C-suite requires judgment that goes well beyond a résumé review, he said.

Executives on his team don’t operate as isolated consultants but as part of an interconnected group, offering clients a multi-tier advisory relationship that spans technology strategy, execution, and third-party vendor oversight.

The talent itself, he said, tends to come from a tight and carefully vetted circle. Many of his executives come from the financial sector, are New York-trained, and have deep knowledge of high-stakes strategic planning and specific verticals such as cloud infrastructure. The result is a certain type of executive: “We have all been through enough pressure to come out as diamonds.”

According to Rodolfo Viola, who has worked as CTO and CIO for several companies in the United States, Costa Rica and South America, fractional work is usually time-limited and involves very specific tasks. “Not just anyone can provide that kind of service. When you choose a provider, you’re relying on their experience.”

From his years as a fractional executive, he cited two examples of when bringing on board a temporary CTO makes sense: operation consolidation, like merging three offices into one, or when startups conducting roadshows need an experienced person to project an image of professionalism.

For founders uncertain whether they actually need a fractional CTO, Francis offered a relatively clear threshold. Once a company reaches 50 employees, or approximately $3 million in revenue, the calculus changes. At that stage, technology spending requires executive-level oversight – someone capable of looking at the business holistically and ensuring IT investments drive efficiency rather than inflate costs. Below that threshold, the priority shifts: less about governance, more about laying the right technical foundation, he said.

The distinction between a fractional CTO and a VP of engineering, he said, is not about seniority but rather about orientation. The CTO role, even in its fractional form, is fundamentally strategic. “It’s not a day-to-day operation,” he said. “It’s the last line of defense.” To prevent one client’s technology crisis from cascading into another engagement, his firm enforces a hard cap: no executive takes on more than three clients at a time.

Viola added that non-disclosure agreements offer an effective protection for providers and their clients to avoid any potential conflict of interests.

On the question of what Latin America specifically brings to the model, Francis said that  professionals in the region offer multilingual capabilities and a drive and ambition that is more difficult to find consistently at the same level in the U.S. market. “They have more hunger to advance a career,” he said. The region’s lower cost of living allows executives to align their personal career goals tightly with client strategy, making it easier to retain and develop talent over time. Black Birch currently employs just north of 100 people, most of them located in the Dominican Republic and focused on engineering and analysis.

Regarding the impact of artificial intelligence on senior technology leadership, he said fractional CTO services are more indispensable now. It is not whether a company adopts AI – most of his clients already have – but how to embed it coherently into business operations without the strategic foundation to do so responsibly. Companies that skip that step, he warned, tend to accumulate significant AI expenditures with limited returns. “Because of AI, I would say it is even more wanted than ever,” Francis said.

Viola agreed with this view, saying that the final decision – who brakes and who accelerates – is up to the driver, not AI. “That’s something you have to understand. You have to take that interpretation seriously. If I give you a knife, an ice pick, and an axe, you could kill someone, but it all depends on how you use those tools.”

As for the moment when a client decides to hire a fractional executives full-time, Francis has a relaxed view. “If we are able to help any organization to the point they can hire one of our fractional C-suite, I won,” he said. The conversion happens often enough to serve as a reputational signal, he said, but not so frequently that it disrupts his business.

Viola himself experienced this first hand: after arriving in Costa Rica for a nine-month commitment, he ended up working there for nearly a decade.