Top 3 Things I Learned About Systems As A Fractional CTO

Navigating the business world today feels akin to steering a ship through rapidly changing seas. Each wave, each gust of wind, represents a new challenge or opportunity. Through Systematik, I’ve served as fractional CTO for multiple companies, spanning healthcare, online education, agencies, the energy sector and the sales industry. This unique vantage point afforded me a bird’s-eye view of the operational intricacies of varied industries.

Across all these industries a consistent theme emerged, repeatedly asserting its importance: the indispensable role of systems, primarily software and Standard Operating Procedures (SOPs). It’s clear that in today’s digital age, software isn’t just a tool; it’s the backbone of efficient operations. Simultaneously, SOPs serve as the blueprint that guides teams on how to leverage these tools, their time and the resources of the business to their fullest potential.

What struck me most was the evident difference in growth trajectories among the companies. The 6-figure businesses often navigated with essential software tools and messy processes. In contrast, the 7 and 8-figure powerhouses demonstrated a more profound synergy between advanced software solutions and comprehensive standardization of every aspect of their operation. Their growth wasn’t accidental; it was systematically orchestrated.

For the astute business owner, this distinction offers a roadmap. It’s not just about adopting the latest software or having some procedures in place. It’s about the strategic alignment of technology with clear, actionable processes. This alignment not only streamlines operations but also paves the way for scalable, sustainable growth.

Here are the 3 major lessons I learned about systematization in business as a fractional CTO.

1 - The Power of Customization: Beyond the Limitations of Off-the-Shelf SaaS

In today’s fast-paced digital landscape, the allure of Software-as-a-Service (SaaS) products is undeniable. With their out-of-the-box solutions and seemingly user-friendly interfaces, they promise to resolve business pain points instantaneously. However, while these products might initially appear to be the panacea for operational hitches, they often conceal limitations that can impede genuine business growth.

Feature Overload

One of the primary challenges with many SaaS products is their tendency to be jam-packed with features. At first glance, this seems advantageous. After all, more features equate to more functionality, right? Not necessarily. More often than not, businesses end up using just a fraction of the available features. The remaining, unused features clutter the user interface, confuse your team members and steepen the learning curve to master the software. What was meant to be a tool to enhance productivity often becomes an obstacle that forces teams to waste time navigating complex dashboards rather than focusing on tasks that genuinely drive business value.

Integration Headaches

Another concern arises when businesses rely on multiple SaaS products. Each tool might be good in its specific domain, but when it’s time to integrate them, the story takes a twist. Not all SaaS products play well together, leading to integration challenges. This often results in data silos, where valuable information is trapped within one tool and inaccessible to another.

Cost Implications

On the surface, SaaS products might seem cost-effective. There’s usually no hefty initial investment, and the subscription model means you only pay for what you use. However, as your business grows and evolves, so do its needs. You might find yourself needing to upgrade to a pricier tier to avail of a particular feature or accommodate more users. Over time, these costs accumulate, and when you factor in the multiple SaaS products that most companies use, the financial outlay can be significant.

You don’t notice it since it’s a series of small payments to different vendors, but take some time to tally up how much you spend every month on SaaS. You might be in for a shock!

Conversely, investing in custom software can seem like a more substantial initial expense, but its long-term benefits often outweigh the costs. Custom software is tailored to your business’s specific requirements, and if built correctly, every feature aligns with your operational needs. This reduces the fluff, streamlines the user experience, and ensures that the tool grows with your business, rather than becoming a hindrance.

Moreover, custom software offers a level of flexibility SaaS products can’t match. As your business needs change, your software can adapt accordingly, without the need to migrate to a new tool or deal with the hassles of integration. The bespoke nature of custom software ensures that you don’t pay for redundant features.

Here’s my best recommendation for deciding between SaaS and custom software.

Just like deciding between a custom fitted suit and one off the rack. If you can afford it, get the custom one. It will fit and feel way better on you. Most importantly, make sure you get one from a reputable tailor. But A suit is better than NO suit… So get a cheap one from H&M while you save up for the real deal.

2 - Processes: The Unsung Heroes of Scalable Operations

Many business owners start with a vision, a product, or a service. In the early stages, things are straightforward: the founder might handle multiple roles, from marketing and sales to product development. Over time, as the business grows, new team members join, and the operations expand. This is where the cracks begin to show if processes aren’t in place.

The Myth of Spontaneity

There’s a common misconception, especially among startups and smaller enterprises, that processes and SOP’s are bureaucratic tools, meant only for large corporations (my old business partner swore by this). Some believe they stifle creativity and slow things down. While spontaneity has its place, particularly in the creative aspects of business, operations require a structured approach. Processes ensure consistency, quality, and efficiency — three pillars on which successful businesses are built.

To drive the point, consider McDonalds. What makes them the largest franchise in the world is processes. From how you’re supposed to sauce the bun to the way you layout the seating at your location, everything is documented and has a process in place. That is inherently what gives a franchise like that it’s value. Imagine everyone flipping burgers at McD’s had the liberty to improvise on every order. I’ll leave the example there.

Document Before Delegating

As businesses grow, the need for delegating becomes imperative. You cannot, and should not, do everything yourself. But how do you ensure that the tasks you delegate are performed with the same level of precision and dedication that you would offer? The answer lies in well-documented processes. Before you outsource or delegate any aspect of your business, it’s crucial to have a clear, concise SOP in place. This serves as a guidebook for the individual or team taking on the task, and ensures they have a clear roadmap to follow, minimizing errors, and maintaining consistency.

I use voice notes to document processes efficiently. I will riff into my phone’s voice note app for hours, then give that recording to my assistant who will then throw it into ChatGPT (even though she says she doesn’t). This chain of outsourcing has resulted in fantastic documents that our teams use tp work their roles to their full potential.

Avoiding the Traps of Tribal Knowledge

Relying on “tribal knowledge” or unwritten rules and processes is a dangerous game. If a key team member leaves, they take this knowledge with them and leave a knowledge void in their wake. Documenting processes ensures that even if individuals move on, the knowledge remains within the organization. In my teams this is a non-negotiable for members in crucial roles. They are required to on a regular basis, take a day, to revisit and update existing documents related to their position.

It’s essential to understand that having processes doesn’t mean rigidity. On the contrary, a well-defined SOP serves as a framework within which someone can operate. It provides boundaries and guidelines, but within those, there’s ample room for innovating and getting creative. Processes should be seen as living documents, that evolve with the business’s needs and the market’s demands.

3 - The Power of Simplicity: Building Robust Systems Over Complex Solutions

Every entrepreneur has been there at some point: caught by the shiny object syndrome of the latest SaaS solution promising to revolutionize their business. The pitch is often irresistible — advanced features, AI-driven analytics, seamless integrations, and so on. But as the saying goes, “Not all that glitters is gold.”

Beware of Over-Complexity

The modern business software landscape is a testament to human ingenuity. There’s an app or platform for nearly every conceivable function. But herein lies the danger: complexity can be the enemy of progress. I’ve observed time and time again companies dump loads of cash every month for software solutions with thousands of features that none of their teams would even begin to know how to leverage. The software, which was supposed to drive efficiency, ends up becoming a stumbling block.

The Strength of Core Fundamentals

It’s easy to be swayed by the allure of sophisticated tools, especially when competitors are raving about them. However, one thing I’ve consistently noticed is that businesses that prioritize foundational systems and procedures over the newest flashy tool tend to fare better. These companies understand their core needs and build robust, simple systems around them. They might not have all the bells and whistles, but they have reliability, ease of use, and clarity — qualities that foster productivity and drive growth.

It’s not an argument against innovation or the adoption of new technologies. Instead, it’s a call to evaluate the real needs of your business critically. Just because a software solution is new or packed with features doesn’t mean it’s the best fit for your company. I’d argue that in most cases, a well-thought-out process, backed by basic but reliable software, can deliver superior results.

It’s not about having the most tools; it’s about having the right ones.

As we’ve journeyed through the lessons I’ve garnered from my experiences as a fractional CTO, the underlying theme is clear: the essence of effective business operation lies in strategic systematization — using the right combination of custom software, well-defined processes, and fundamental robust systems.

It’s not about being resistant to new technologies. It’s about making informed decisions — discerning which tools truly align with your business needs and which are simply shiny distractions. The difference between a 6-figure business and an 8-figure output machine often boils down to the strategic alignment of technology with clearly defined processes.