InfoMail, Q2-2002
GlobalVision International, Inc.


To Localize Or Not To Localize... Is This The Question At Hand?

All companies selling internationally will sooner or later face the question of whether to localize their products and services, or not .

To narrow down the scope of possible answers, it is essential for a company with a global vision to first identify the geographies that are of interest to it. Often firms enter international markets with their domestic offering and do not localize products, web pages and collateral until they see a definite opportunity to increase revenues. Revenue potential, strategic goals and other forces can help identify the most promising target markets for localization and enable a company to take a proactive instead of simply a reactive role.

Executive-level managers should then drive the decision process, soliciting input from departments across the company. Here, we look at the roles of six key groups: engineering, marketing, legal, fulfillment and customer service, sales, and finance.

Engineering
Engineering needs to be consulted first in order to understand the true extent of the global push at hand. To them, localization is a side issue. The real issue is internationalization - the changes that must be made to the product before producing a localized version. Important questions such as: “Is the product enabled for double-byte and bi-directional support?” and “Does it handle different locale nuances?” need to be asked. If the answers are yes, then your product is localization-ready, which may give you a true time-to-market advantage over competition. Otherwise, serious engineering efforts may need to take place, particularly if you’re undertaking any Asian or Middle-Eastern language localization.

Marketing
Marketing approaches this issue on two fronts: first, looking at whether competitors are localizing their products; and second, considering the value localization brings to your prospects and end-users. Studying the habits of different international end-users while considering localization is key. In many countries like Japan or China, the specific needs inevitably require localized products, while in others like the Netherlands or Canada, English proficiency and/or cultural similarities mean that it may not be a must-have. Since the value of localization to your end-users will vary, marketing should always weigh it against the feature and functionality improvements that could be made to the product itself.

Legal
Many companies forget that their legal departments should play a key role in reaching a localization decision. Their main questions are: "Are there any international regulations requiring us to localize?” and “Are we under any contractual obligations to localize?" These are serious matters -- many countries like France are imposing localization laws, such as the Toubon Law. What is important here is to try to gauge the liability to your company in any country it sells into if it does not meet local language regulations.

Production and customer service
There are significant logistical issues that production and customer service will have to deal with in order to produce, stock, ship and support international clients. As a result, plan for added overhead when following through on the localized offering.

Sales
The sales department is the place where you can get tangible answers about the opportunity that localization will bring to your company. It is no secret that most companies that localize do not do so until they have a major international customer demanding it.

If you ask your domestic sales force, you know what the answer will be. Exactly the opposite answer will come from the international arm. Neither point of view is sufficient: although localizing your product will help increase international sales and reduce the support burden, it could also distract engineering from adding other enhancements to the base product.

Resolving this dilemma is another reason why localization needs executive-level attention, by consulting the VP of sales. Posing the questions: "Do you have any clients demanding a localized offering? How much more revenue can we get from a localized version? Are you willing to take on additional quota if we localize the product? What are the savings in support calls?" will be critical for getting the proper answers to financially justify your efforts.

Finance
Once finance has relevant data from the field, marketing, engineering, production, customer service and the legal department, their task will then be to answer: "What is the return on investment for localizing in specific languages? What are the short- and long-term impacts on the bottom line?" These questions aren’t easy, but with visibility into the process and access to all the data, finance may be able to pull the numbers together and make a business case for or against localization.

Making a final decision
Even when you’ve involved all departments, the decision-making process probably still won’t be black or white. But you will be able to study the relevant issues and balance the subjective versus objective forces that guide you. If the cost to localize is much less than the opportunity it creates plus the liability it eliminates, then it’s time to move forward. The key to a successful endeavor will be creating an execution strategy to develop the localized offerings and bring them to international markets.