Optimize translation costs 1: Understanding translation costs

Introduction

Reducing translation costs is a topic often raised when advising our customers. Many companies wonder how they can save money and reduce translation costs, e.g. when translating their software products, documentation, marketing materials, websites, etc. At the same time, however, translation requirements are often high in terms of quality and delivery times. Optimizing costs in the area of translation and localization is therefore always a matter of time, cost and quality.

There are several ways to optimize translation costs. In this blog series, we will present some selected solutions for you. 

What do translation costs consist of?

Optimizing translation costs is subject to understanding where the costs come from and how they are put together. To do so, it is helpful to consider the entire process chain during the translation. This complexity can vary depending on the type of translation project and the requirements. For example, a "simple" translation of a business letter in DOCX format from German into English is less time-consuming than the translation of a software product including documentation from German into several target languages. 

"Simple" translation projects

"Can you have this two-page letter translated into English?" said the managing director to the assistant.

With the apparently "simple" translation of this business letter, additional expenses and costs are incurred in addition to the actual translation. Even collecting and examining (comparative) quotes for the translation can take at least 15 to 30 minutes. Depending on the company, commissioning and triggering a purchase order often takes another 15 to 30 minutes. After the translation has been delivered, the company incurs further costs and expenses for checking, approving, booking and paying the invoice. This takes at least another 15 to 30 minutes too. With average staff costs of EUR 40 per hour, purchasing and accounting would amount to at least EUR 30. Compared to the order value of EUR 50  for the translation, this amounts to a not inconsiderable 38.5% of the cost.

More complex translation projects

For more complex projects, such as the translation of a software product including documentation from German into several target languages, there are also expenses and costs for purchasing and ordering as well as accounting. In addition, however, there are other internal expenses for preparations and processing within the company, e.g. for preparing and exchanging documents, setting up and testing workflows, internationalization tests, clarifying queries, layout work, function tests, etc. The expenses for external service providers are also higher in this case since additional services such as localization engineering, proofreading, editing and, if necessary, foreign-language typesetting are required. This is accompanied by higher costs for project management. Two examples of additional expenses and costs that are often underestimated by customers are the clarification of queries from the service provider and proofreading by the company’s branches abroad (in-country review).

Clarifying queries, regarding terminology for example, often requires the involvement of several employees in the company. If responsibilities and contact persons are not defined, this can easily take several hours. If proofreading is carried out by the foreign branches, this results in expenses for getting the documents ready for proofreading, document preparation and conversion, coordination, answering queries :-) as well as reviewing and incorporating the proposed changes.

Example of costs in compl

Conclusion

Translation costs in companies consist of more than just the invoices of the translation service providers. Additional costs are incurred for purchasing, translation coordination, preparing and exchanging data, quality assurance and accounting. These costs are often underestimated and account for a not insignificant proportion of total translation costs. The problem is that many translation costs in companies are not booked to a central “translation" cost center. Translation costs are spread across several cost centers, especially when translations are organized locally. Internal costs are often not even taken into account when considering translation costs. The analysis of the entire process chain from the planning of texts to their final release is a prerequisite for determining the actual costs and identifying potential savings.

In the next part of our blog series, you will learn how to write texts so they can be translated as easily and cost-effectively as possible.