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09Mar

Localization Budget Ownership Preferred in More Mature Organizations

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New research by Common Sense Advisory confirms ownership of the language services budget by the localization team is the clear choice for supporting a global operation

(BOSTON) March 9, 2015 – Many buyers of language translation and interpreting services and technologies scramble to stretch flat budgets to cover an expanding number of markets, products, and distribution channels each year. To collect updated data about how they manage their language service spend, independent market research firm Common Sense Advisory (CSA Research) conducted interviews with managers and directors responsible for translation and localization budgets at 37 global companies in 10 industries in eight countries. The results are published in the report, “Take Command of Your Translation Budget.”

The research findings confirm that budget administration and execution tend to be centralized, but funding is not: 83% of interviewees report that they are responsible for executing a large portion or all of their organizations’ translation projects. In contrast, only 25% own and control a centralized budget. The remaining 75% share funding ownership with other functional areas, business units, or product lines. However, the majority spend against the budget as if they own it.

Interviewees cited various advantages and disadvantages for not owning their budgets, including:

  • Accepting money from other units limits strategic reach. Several of the localization managers interviewed believe that relying on money from other groups condemns their teams to a purely operational role – rather than the more strategic one they should play. When money is tight under this model, translation is often considered an expense that drains resources from core business requirements. This forces localization managers to renew financial support or deal with a reduced budget.
  • Centralized funding provides freedom to invest. Allowing business units or corporate teams to manage their own funds encourages them to invest wisely in translation because they have a stake in what happens with their money. However, localization managers can more easily add staff, automate processes, and train vendors when they own the budget.

Comments Rebecca Ray, the report’s lead analyst, “Budget ownership is power. While giving control of the language services budget to the localization team is the clear choice for supporting a global operation, such power appears only in more evolved organizations. We found that the switch to a higher degree of budget ownership happens as the organization gains in "localization maturity."

This research shows that localization managers must use a variety of budgeting and alliance building techniques to juggle two areas to be successful with their funding strategy: 1) expose enough data to demonstrate that they are good stewards of company funds; and 2) maintain enough camouflage to ensure flexibility as they adapt to shifting priorities.

Concludes Ray: “Organizations that are focused on international expansion should enable their globalization teams to build sustainable funding models based on 100% budget ownership. Doing so will allow translation and localization managers to invest appropriately to support the global growth strategies of their companies.”

For more information on the findings and recommendations from this research series, see “Take Command of Your Translation Budget” (for buyers of language services) and “Insights on Enterprise Buying Practices” (for language service providers). 

Members of the media may schedule a briefing with the report’s lead analyst by contacting Melissa Gillespie, Melissa@commonsenseadvisory.com,+1 760-522-4362.

About Common Sense Advisory

Common Sense Advisory is an independent market research company helping companies profitably grow their international businesses and gain access to new markets and new customers. Its focus is on assisting its clients to operationalize, benchmark, optimize, and innovate industry best practices in translation, localization, interpreting, globalization, and internationalization. For more information, visit: http://www.commonsenseadvisory.com or www.twitter.com/CSA_Research.

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