How to make a business case in Localization?

There are certain things in life that seem obvious that produce good results; and still, you have to overcome a great resistance to carry them out.

Some are on a personal level; for example, the benefits of eating broccoli are evident, and even so, it requires me a lot of effort to eat broccoli instead of something tastier like a pizza 4-cheese with an extra of blue cheese 😋

At our industry level, there is another series of things that seem good decisions to carry out; for example, a company, if it wants to improve its benefits, must pay attention to Localization. 

There are many case studies that explain how companies have improved their results when they executed a Globalization strategy for their products. Localization being a revenue enabler should be pretty clear at this point of the 21st century. In a digital world where we are a click/tap away of millions and millions of people having our products translated into several languages should be a no-brainer; even so, for many companies and Localization teams to convince C -suite, Product Owners, Portfolio Managers … to localize their products might be a daunted task.

To help see the value of localization to our stakeholders, I have created this white paper.

It is a summary of what aspects we must take into account when presenting our business case to our stakeholders.

How to make a business case for Localization

Our business case must focus on the benefits of Localizing our product (ROI) but we cannot ignore other areas such as the one visualized in below mindmap

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How to make a business cases for Localization @yolocalizo click to enlarge the model

The first component of our localization business case must be the why. Simon Sinek (TED Talk HERE) would be proud of me, I finally understood that I need to start my persuasion efforts finding the why!!! ☺️

1. Why?

In this section of our business case we must explain in a clear and concise way why we want to localize our product for certain markets. 

Some of the reasons we can refer to find our why are:

• Can’t read, Won’t buy. People do not buy what they do not understand; as simple as that.

• As stated in CSA’s “Can’t Read, Won’t Buy” study, language is a critical aspect of the buying decision. English reaches only 36 percent of the world’s online and offline buyers. In CSA’s study of 3000 buyers, a full 75% of respondents indicated that when deciding between two similar products, they would buy the product available in their native language.

• If people don’t buy what they don’t understand we might be in a difficult situation nowadays as most of the people living on the earth don’t have a good English level (check here the 2018 English proficiency level)

• Another factor to consider, dominance of English language is decreasing. Business insider reported in this article that English is losing its status as the universal language of the Internet

• And that trend is here to stay. Last year English language lost their podium in the number of native speakers world-wide. For the very first time in history English language and English speaker are not in the Top 3

• Last but not least, have a look at what our competition is doing. If our competitors are in that market we are considering to enter, if they translate to that language, we will not be losing a competitive advantage for not translating our product?

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2. Supporting data

It is often said that if you do not have data, you are simply a person with an opinion.

In this section of our business case, we have to overwhelm our stakeholders with data that shows that entering that market, to translate in that language is a good idea! And what data should we include here??, we must be creative, but include data such as below might be a good beginning

• breakdown of the online population by language

• evolution of the number of online users by language over time

• charts earnings per capita of the target population

• access to technology

• market size

• market revenue

• growth potential

• brands competitor overview

• customers preferences

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3. ROI

This is the holy grail of our business case. Return on investment is the comparison between the net amount of money you get out of a project (your return) and the money you put into it (investment.)

Calculating ROI in a localization effort seems like an easy task. In theory, the reality is different.

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While it is relatively straight forward to define and measure the direct revenues from our localized version, it is really difficult to measure the benefits of localization in the long run (get a strategic advantage over our competitors, get consumers brand loyalty are factors difficult to quantify).

Also indirect cost not fully related to cost per word, hours of project management, loc engineering hours are complex to include in the ROI formula. The indirect costs might be for example market entry and customer support.

There are currently no industry standards available allowing organizations to easily identify the tasks and activities that should be included in the calculation of these costs.

Until that standard is created let's remember this. Return on investment is based on two things.

• The first is making more sales revenue and profit.

• The second is properly managing your localization costs.

Also check our this post from Jan Hinrichs in LinkedIn where he explains ROI in a very straight forward way

4. Metrics

Metrics are a key component to include in our business case (and in our Localization strategy program!)

With the metrics, we are looking to 2 aspects: happiness and money. What a winning combination!

We need metrics to answer these questions:

• Are our clients happy? Are we delivering the quality they deserve?

• Are we getting what we expect? Is the ROI aligned with our expectations?

Some of the metrics that we might think to include in our business case/localization strategy are:

• Globalization / Localization headcount

• Outsourced vs. in-house globalization cost

• Localization costs against Localization Product Revenue

• Outsourced / In-House localization cost per word

• ROI Localization

There are many data/metrics/ KPIs we might include / track, but remember that Data is not free - Do not track what you can not use, or you are not sure how to use.

If you need more information and food for thoughts about which metrics you might include, Moravia has published in the past excellent webinars and articles about this topic. Please check out HERE their material as it's really useful and very well explained

5. Content Prioritization

Not all the content of our product needs to have the same level of translation. There may be parts that machine translations is sufficient, while there are other parts that we want to have the highest level of quality possible; and for that, we hire specialized translators.

Localizing everything at the same time is a sure recipe to getting overwhelmed! especially when you have limited time and resources.

How we approach content prioritization then? Some thoughts to approach it in the next table.

Maybe your needs and priorities are different, but I hope you take the idea. 

Check my post MV ... what? the Mimimum viable concept applied to Localization! ... for more information on how to focus the prioritization of the content we want to translate

6. Language coverage

It's quite challenging to treat all the markets/languages in the same way. For this reason, it might be a good idea to create a group of languages, commonly referred as Tiers. 

Different products might have different language tiers, so how to decide our language tiers? well Mr. Money rules. Focus your attention where the money is; We should be investing more time and money in the content that generates the highest revenue, and have a lighter approach to low revenue content.

Popular acronyms for tiers include:

• FIGS: French, Italian, German and Spanish

• CJK: Chinese, Japanese, Korean

• BRIC: Brazilian, Russian, India (Hindi), Chinese

7. How?

In this section of our business case, we must explain how we are going to execute our plan.

Companies ready to initiate a localization adventure have different possibilities at their disposal

• In-house localization

• Outsourced localization

• SLV

• MLV

• Hybrid

• Some languages internally while ...

• Other languages are outsourced

Each approach might have advantages/disadvantages so make sure you take time to understand which model might fit better with your product.

In-house teams offer in most of the cases a fast solution, also confidentiality/security is not compromised. However, it tends to be expensive and cannot scale as quickly as other models; on the other hand vendors can offer a competitive cost and they are highly scalable.

To have a deeper understanding of pros/cons you might check these amazing thesis from John Papaioannou The Localisation Outsourcing Decision, available at http://www.localisation.ie

Conclusion

Making a persuasive business case for localization is not really a piece of cake. It requires discipline and data. Defining ROI is probably the most crucial and can potentially be the most convincing part of our business case,

Creating our case involves a number of steps from finding our why, compiling the data, defining a content prioritization strategy, deciding our language tiers , describing our workforce (in-house vs outsourcing) and finding the right metrics to measure our progress

Working to get all data is hard work, but it's worth it because the overall trend in localization is growth.

I hope you found this whitepaper useful and good luck convincing your stakeholders when presenting your business case. One final tip, make sure you shift the conversation from cost to return on investment. Localization is a revenue booster, not a cost center!