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Global Watchtower
Common Sense Advisory Blogs
Landing the Budget to Translate: Not Easy for Buyers
Posted by Rebecca Ray on June 25, 2014  in the following blogs: Business Globalization, Translation and Localization
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Research from Common Sense Advisory shows that a typical buyer organization’s investment in translation and localization is minuscule compared to the revenue it enables. The budget for these areas generally represents less than 1% of total investment in marketing or R&D, even when staffing and technology costs are included. When managers and directors demonstrate the ROI of translation, they often fund additional languages, especially as B2C and B2B customers continue to climb the income ladder. However, these managers still find themselves competing against other business areas for resources during the budget cycle to maintain stable investment in markets outside of their home country.

Common Sense Advisory is currently researching the budgeting process for language investment (click here if you’re interested in participating). It varies due to many factors. These include an organization’s corporate culture, the level of localization maturity it has achieved, and whether or not it operates in a regulated industry or as a U.S. public company beholden to Sarbanes-Oxley
  • Corporate culture
    When a company’s culture requires a very formal process, globalization managers need to gather data from various groups within the company, provide several budget drafts to financial managers, and perhaps even present to executives or management steering committees. Businesses with a less formal process may only ask translation managers to iterate their budgets once or twice, based on the previous year’s spend rates, and then present it for approval to their managers.
  • Level of localization maturity 
    Companies that are less mature in terms of their localization efforts generally don’t centralize their budgetary planning requirements. Translation or localization managers may only control money for a subset of the entire enterprise’s content; for example, marketing materials, training content, or product components. At these earlier levels of localization maturity, the translation budget may even be allocated with minimal input from the manager responsible for delivering the work.
  • Regulated industries and Sarbanes-Oxley
    Public companies in the U.S. are subject to the Sarbanes-Oxley Act passed in 2002. This federal law requires close scrutiny of financial activities, including the requirement for individual executives to personally certify the accuracy of financial data published by their companies. This can lead to more detailed budget tracking and the transfer of funds from one cost center to another. The same often applies to companies that operate in regulated industries.
If you are an enterprise buyer of language services or technology and interested in sharing your budgeting experience, please e-mail Rebecca Ray. In appreciation of your time, you will be invited to a special webinar during which we will share the results of our research, including our recommendations.


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Keywords: Enterprise process globalization, Localization, Localization maturity, Procurement, Return on investment, Translation

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