Part 3 of the article series Translation: Are You Costing Your Company Money? looks at what happens when companies over emphasize translation and localization costs.

Lessons from Fukushima

Dealing directly with clients everyday, I often get to witness the adage penny wise pound foolish. Let’s jump right in with a real-world example to illustrate how relentless pursuit of cost can sink your project.

Real-world example
I was positively thrilled when the project manager of the financing arm of a luxury motorcar brand confirmed a quote for a challenging Japanese translation and localization project. However, the client called a couple of days later to cancel our services, apologizing profusely. What happened? Another vendor submitted a belated quote several hundred US dollars below our offer. What can I say, competition is tough!

If that was the end of the story, there wouldn’t be much of an example here.

This project manager contacted me again 10 days later despairing at the quality of service provided by the vendor. His team of professionals flown in from Germany would be back in Tokyo in 2 weeks, and could we provide our services then? Ok, no problem. However, having been left hanging out to dry once before, I informed the client we would require a binding contract with full payment upfront no later than one week before the team flew back into Tokyo. What else could he do but agree?

Now, one would think lesson learnt; however, this project manager insisted on haggling over the quote, right down to the wire. Finally, a couple of days before the project was due to start, realizing that it was not possible to assemble a custom team for this particularly tough project by the deadline, I had little choice but to cancel.

Let’s do a quick ‘n dirty costing of this self-defeating behavior:

• Weeks of haggling - certainly cost more than a couple of hundred bucks.
• One unnecessary round trip for a team of four - USD12,355 (Berlin Tokyo Economy Class).
• Team’s lost productivity - USD8,624 (average finance and IT professional hourly rate on payscale.com calculated based on 7, eight-hour days for a team of 4 professionals).
• Impact on sales of repeatedly delayed project... (This project was for the Japanese translation and localization of a web-based motorcar financing and leasing system.)

Sure, this is one of those extreme examples that could possibly fall into the category of “Did you hear the one about…” However, this kind of self-defeating behavior manifests itself often in companies where there is an over emphasis on cost reduction.

Here's why chasing the deal can be costly
The result of excessive emphasis on reducing costs will, if not doom your project outright as in the example above, ensure a translation project riddle with errors negatively impacting your bottom line. The reason is quite simple:

There comes a point in the cost reduction process where more is less - the law of diminishing returns.

This is the point where incremental cost reductions (absence technological improvements) start producing diminishing returns in terms of quality (i.e. increase in the number of errors). This happens in the translation industry when vendors are forced to:

• Cut corners during the translator evaluation process resulting in unqualified translators on the project.
• Bring low cost non-native translators onto the team producing unnatural, or stilted, translation.
• Employ automated machine translation (MT) that more often than not produces gibberish.
• Cut back, or skip altogether, the proof-checking process allowing errors to go to print undetected.

My company is very conscious of the cut-throat competition we face in the global translation industry. So, when a vendor located in a well-known Southeast Asia cost center offered irresistible rates, the possibility of outsourcing piqued our interest. I commissioned a trial translation -- If it sounds too good to be true, it probably is…

The math behind the diminishing returns of offshore costs centers
The vendor was offering rates 50% below what we pay our native Japanese translators. So, it was not surprising when the trial translation came back several notches below our quality standard. Being unnatural and stilted it was immediately evident that this vendor was using non-native translators on client projects.

When a service provider offers clients a complete satisfaction or 100% money back guarantee as my company does, there is absolutely no compromising on quality. Let’s just say the idea of outsourcing to cost centers has been shelved, indefinitely.

However, this experience did get me thinking about the business model of cost centers. A professional Japanese translator with the right skills and experience can command upwards of 10 yen per source word. So, you have to wonder what kind of translator would take a 5 yen hair cut (50% reduced rate offered by this vendor)... There can only be two possibilities:

1. Unqualified native translators that can’t find work in Japan, or
2. Non-native translators

Neither could complete a translation project according to your quality expectations. Both would produce errors that seriously impact your bottom line.

Applying the lessons of Fukushima to translation
In conclusion I draw on the Fukushima disaster to drive home the point that over emphasizing cost may be the root cause of errors costing your company lost revenue.

Facility operator TEPCO ignored a 2007 study by its own senior safety engineer concluding there was a 10% possibility of the March 11 scenario unfolding within a 50-year period. Ultimately, the Fukushima incident spiraled out of control because the emergency diesel generators were flooded when the historic tsunami overwhelmed the plant’s inadequate seawall defenses. According to Toshio Kimura, a retired 12-year veteran of the Fukushima No.1 plant, “If they’d moved the emergency diesel generators to a position above the expected tsunami level it would have cost the company a lot. So, nobody proposed it.” Cost now:

Hundreds of billions of dollars.

And, that is the lesson I hope you take way from this article. Over emphasis on cost reduction can lead to counterproductive results that will end up costing your company considerably more than the cost of a quality solution for your projects.

About the Author
Ivan Vandermerwe is the CEO of SAECULII YK, the owner of Translation Company Tokyo, Tokyo Visit SAECULII for the latest professional case studies, articles and news on Japanese Translation Services

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