Nearshore Americas

The Tricky Role of CTOs in the Age of Coronavirus

Challenges presented by Covid-19 are changing the way Chief Technology Officers (CTOs) think about their job and the operational environment, not least because they are now forced to find new solutions in the context of work-from-home arrangements.

Supply chain disruption, for large and small companies, has emerged as the Achilles heel for CTOs.

An Everest Group survey of outsourcing customers, prior to India’s shutdown, reveals that 14 percent of respondents observed major business disruptions and another 21 percent were seeing the beginnings of serious issues as of April 1. More than half had seen minor disruptions.

In addition to remedying WFH challenges, data engineers are also now being expected to track trends and mine data that can form the basis of new solutions for fractured economies and over-burdened institutions and companies.

They are also being challenged to find ways to reduce cost.

Whether they are working in companies that are fighting to stay alive or in those that have seen increased demand because of the current environment, CTOs have a tricky role to play in the age of Covid-19. It is a role which requires caution, but also knowing when and how to take an opportunity.

Howie Altman, an experienced technology entrepreneur and co-founder at the product engineering firm Actualize Partners, says that for companies that are struggling, it is almost like the engineering teams are back in school, and they have to complete an important homework assignment in a week or two.

Teams are “doing whatever it takes to introduce a new product or change an existing product so that the company can regain some ground that they’re losing,” Altman told Nearshore Americas.

CTOs’ New Creativity

howie altman
Howie Altman, Co-Founder at Actualize Partners

On the other side of that coin, Altman said that there are opportunities for companies in industries that are seeing higher demand to scale very quickly. Some are struggling to keep up with that demand, whether it’s on the infrastructure side or on the output side. Altman sees the role of the CTO as a highly creative one.

“One of the startups that I work as a fractional CTO for is in the recruiting space. It’s an AI-enabled recruiting platform. And they just started making placements, meaning they’ve just been earning some revenue from candidates they’re placing in the last few days. But before that, for the last two months, it’s been completely dry. Zero revenue to the last two months,” Altman said.

To solve this, they created an entirely new product line in about a week-and-a-half, something they had never done so fast, even as an agile company.

“It’s literally like we had an idea. We sketched it out. We checked with a couple of people if it made sense. We designed it basically like on a notebook piece of paper, tested it. The minimum viable product was literally a week-and-a-half after. The idea was crystallized. And we’re now just adding the additional features that are required not to need so much manual effort,” Altman said.

The Nearshore CTO in the Current Environment

From a Nearshore perspective, José Bonetti, co-founder at the Dominican Republic-based IT company GBH, agrees with Altman and sees opportunities for CTOs in the region to boost growth.

“I don’t see an exodus to the Nearshore or outsourcing in general. But I think there is an opportunity that even I have experienced. Some companies want to place their projects in autopilot, and they want that autopilot to be at a lower cost,” Bonetti said.

jose bonetti
José Bonetti, Co-Founder at GBH

Bonetti says that Nearshore companies need to be aware that their clients are having a hard time right now, and their role is to help relieve their struggle.

“In our case, we are implementing rate-reduction strategies, in some cases near to cost level, to support those businesses that are suffering and have been our partners for years. We are betting on them and our relationship,” Bonetti said.

In the context of the pandemic, Nearshore IT companies have led the way in moving to a WFH scheme without significant issues, as was the case with Bonetti’s GBH.

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Altman believes investors in the US are keener than ever to reduce costs.

At the same time, he said, “they’re very scared of… outsourcing blindly to places like Pakistan or Ukraine where the quality is very hit or miss, and mostly not good.”

In that regard, Nearshore teams and IT companies present the perfect middle-ground for the Covid-19 era.

With this opportunity, CTOs in the region, and IT companies in general, need to be strategic. That way the Covid-19 opportunity can solidify into a long-term one arrangement.

Under the conditions of the pandemic, the Nearshore might be under consideration for some companies in the United States for the first time. CTOs can help them to make that decision.

As the research firm Mckinsey noted in a recent article, these engineers should not only “lead the way in sourcing, storing, and serving up the necessary data but also work alongside business and functional heads to identify and drive these new priorities.”

Diego Pérez-Damasco

Diego Pérez-Damasco is a writer and managing editor at Nearshore Americas. He has more than six years of experience covering politics and business in Latin America. He has been published in media outlets throughout the Americas and holds an MA in International Journalism from the University of Sussex, United Kingdom. Diego is based in Costa Rica.

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