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Can't afford a CIO? Try renting one

With the growing demand for seasoned executives among start-ups and mid-sized companies, new rental services are emerging to help them make their business and technology plans work.

Everything's for lease these days--cars, furniture, computer systems. So why not a chief information officer?

That's what Janie Tremlett eventually asked herself as the vice president of technology strategic services at start-up Breakaway Solutions. Tremlett, who launched Breakaway's CIO outsourcing program this year, said she saw a growing demand among start-ups and mid-sized companies for seasoned executives to help them make their business and technology plans work.

The problem: Small firms can't afford a big-name executive. And while executive recruiters make their bread and butter placing top-level talent in permanent jobs at Fortune 500 companies, the smaller companies that can't offer major-league salaries are largely ignored.

"What we're finding is that companies don't feel they can progress without the assistance," Tremlett, who rented her own skills as a chief information officer to companies before joining Breakaway.

So far, the Boston-based firm has picked up about 50 customers who buy services from four CIOs, including Tremlett.

The arrangements work for both sides, she said. A growing company--often staffed by 20- and 30-somethings--gets access to an industry veteran. In turn, the executive gets to work on temporary projects, gather more experience, and move on.

CIO services range from a one-time business strategy assessment to a complete outsourcing agreement under which an executive dedicates a block of time each week to a client. Under this arrangement, the CIO might make recommendations on what technology applications a company requires, what it can afford, and how it should best staff a project.

Breakaway, which also provides consulting services, systems integration, and hosting to its clients, plans to expand the program to include the rental of other top-flight executives, including chief financial officer and chief marketing officer, with a goal to offer virtual management teams to clients.

"We come in and basically do whatever the company needs us to do and tackle the specific issues they want us to tackle," Tremlett said.

Clients pay between $35,000 to $75,000 for a three- to four-week assessment, she said. Pricing on more elaborate services will vary on the type of job and contracts can range anywhere from two months to two years, she said. Hiring a full-time CIO will cost anywhere from $100,000 a year to $300,000, according to analysts.

"Getting a CIO is very expensive," said Janet Kraus, CEO of Boston-based start-up Circles, which coordinates personal services such as housecleaning and dinner parties for customers. "This is an ongoing relationship with Breakaway that will grow bigger and smaller as needed. That's the beauty of it. I don't have to make a choice right now."

Circles paid Breakaway approximately $35,000 for Tremlett's services.

IDC analyst Meredith McCarty-Whalen said Breakaway and its competitors are increasingly focusing on management needs of dot coms and start-ups.

A CIO rental program is beneficial for both parties, she said, as the CIO is exposed to cutting edge Internet projects, and the start-up gets access to senior level expertise.

Laurie Orlove, an analyst at Cambridge, Massachusetts-based Forrester Research, said Breakaway's program makes sense for smaller companies that can't bring an experienced CIO on board. Orlove said many young companies make the mistake of promoting a junior-level tech wizard for the job, when they should be looking for experience.

"That's a major error," Orlove said. "They don't have the management skills. A CIO is entirely a communications and management job built on a strong tech background. It's selling, it's planning, it's strategy, it's management."