Beggars at the Globalization Banquet

The cost of localization is very small compared to the big international revenue it generates. But our research found that most firms shortchange their localization budgets. This report analyzes the ability of localization projects – that is, the translation and adaptation of products, services, supporting materials, and infrastructure for other markets – to create demonstrable shareholder value. We found that:

• Only a quarter of our respondents formally measure ROI on their localization projects. Just a few respondents ever cycle back to re-evaluate their localization decisions. We found that once a company decides to localize, that decision means forever. When pressed, many acknowledged that it would make sense to review past decisions and some claimed that they have plans to do so.
• Our interviews put to rest the long simmering debate about the involvement of “C-level executives” (that is, CEO, CIO, CFO, and so on) in localization. Just one interviewee bore the title of vice president or higher. With nary a chief globalization officer (CGO) in the mix, vice presidents typically directed us to responsible staff at the director or manager level.
• Because our interviewees find themselves pushed to localize more material for each dollar, we expected that productivity-enhancing tools would be a top priority. They’re not. Except for translation memory used by suppliers and sometimes required by our interviewees, usage of localization-specific tools – translation memory (for example, Atril and Trados), machine translation (SDL and Systran), and globalization management systems (GMS, such as GlobalSight and Idiom) – remains very low. Less than half of our respondents use the most common translation memory tools.

What does this mean for companies localizing products, documentation, or websites? The report provides a framework for dealing with localization ROI to the same degree as it is managed elsewhere in corporations. It provides practitioners with clear, actionable recommendations on setting metrics, measuring, and improving ROI. It also provides detailed advice on how to work with translation and technology suppliers. Finally, it provides guidance to language service providers and technology suppliers on how to deal with the changing ROI dynamics of the global corporation.

This report effort was led by Don DePalma, whose 1997 report "Web Best Practices" set the agenda for formal corporate use of the internet. His 1998 "Strategies for Global Sites" was the first analyst's report that took the "worldwide" part of the web at its word. That report continues to be the most frequently cited source on globalization, noting as it did that "visitors linger twice as long as they do at English-only URLs; business users are three times more likely to buy when addressed in their language; and customer service costs drop when instructions are displayed in the user's native language."