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Global Watchtower
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Should Buy-Side Localization Managers Own the Localization Budget?
Posted by Hélène Pielmeier on February 27, 2015  in the following blogs: Market Data
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Many buyers scramble to stretch flat budgets to cover an expanding number of markets, products, and publishing platforms each year. To collect updated data about how they manage their language service spend, CSA Research conducted interviews with managers and directors responsible for translation and localization budgets at 37 global companies in 10 industries in eight countries.

We confirmed that budget administration and execution tend to be centralized, but funding is not: 83% of our 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:

  • Accepting money from other units limits strategic reach. Several of the localization managers we interviewed believe that relying on money from other groups condemns their teams to a purely operational role – rather than the more strategic one they strive for. In general, these other functions are not willing to fund investment in infrastructure or innovation for language services. When money is tight, translation is often considered an expense that drains resources from core business requirements, thus requiring localization managers to find renewed financial support or deal with a reduced budget.
  • Centralized funding provides freedom to invest. On the one hand, 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. On the other hand, owning 100% of their budget means that buyers can apply their funds according to the priorities that they themselves set for staffing, process improvement, automation, service providers, or absorbing other units that provide language services. Under this model, translation is not negotiable or subject to the whims of the general manager of a business unit.
Budget ownership is power. While giving ownership of the language services budget to the localization team is the clear choice for supporting a global operation, such power comes only in more evolved organizations. We found that the switch to a higher degree of budget ownership generally occurs as the organization gains in localization maturity. Less mature organizations operate with a decentralized funding model in which they bill internal clients for services, which means that localization teams obtain funds from stakeholder budgets and then charge back the expenses.

As a result, localization managers must use a variety of budgeting and alliance building techniques to juggle two requirements to be successful: 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. Instead of focusing on ways to maximize their spend, they often waste valuable time jumping through hoops to secure money and playing internal politics to build the necessary support. Enable globalization teams to focus on the strategic work by giving them the power to own their budgets.

For more information on the findings and recommendations from this research series, see “What Buyers Need to Know about Interpreting Procurement” (for buyers) and “Insights on Enterprise Budgeting Practices” (for language service providers).

 

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Related Research
Localization Maturity Model
What Buyers Need to Know about Interpreting Procurement
Insights on Enterprise Budgeting Practices
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