Full transcript of finance in tech comm podcast

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00:00 Sarah O’Keefe: Welcome to the Content Strategy Expert’s podcast, brought to you by Scriptorium. Since 1997, Scriptorium has helped companies manage, structure, organize and distribute content in an efficient way.

Hi, everyone, I’m Sarah O’Keefe. In episode 15, we have a special guest, Erin Vang. Erin is the owner and principal pragmatist of Global Pragmatica, which provides statistical management and content strategy consulting to Fortune 500 companies. Erin’s been doing that since 2008 and has also held senior management positions at Dolby Labs, SAS, and SYSTAT, in software technical communications, QA, program management, and localization. Erin, welcome.

00:40 Erin Vang: Hi.

00:41 SO: Hey there, good to hear from you.

00:43 EV: Likewise, it’s always good to talk with you.

00:44 SO: Erin… It’s always fun. Erin and I are also talking a lot together because we’re going to be doing a joint presentation at TC World in Stuttgart this month on client vendor relationships. And in the context of putting that presentation together, we’re spending significant amount of time planning our meals, where we’re going to be foraging for beer, dumplings…

01:06 EV: And roasted duck, and Trollinger.

01:09 SO: Some other things.

01:10 EV: That wonderful lentil dish with the wieners…

01:15 SO: Wiener schnitzel?

01:16 EV: Not wiener schnitzels, but the wieners. The wiener wurst.

01:17 SO: The wieners, oh. You can have that, I’ll take the sauerkraut.

01:23 EV: Lentils for the win.

01:24 SO: Okay, focus. But, today…

[laughter]

01:29 EV: This is what it’s like when we try to collaborate, we end up on food.

01:30 SO: This is what it’s like. I wanted to focus today on the other topic that you’re presenting on at TC World, which is Finance 101 for Tech Communists.

01:40 EV: Yeah.

01:41 SO: So, what does that mean exactly?

01:45 EV: Well, the talk in one line is that finance is everybody’s job. It’s not just the finance department’s job. And my talk is meant to help people who are new to thinking about finance and budgeting, understand why they should be concerned about it, and how to go about getting it done.

02:05 SO: Well, and I guess the number one thing that we hear from potential customers, “Oh, we’d love to hire you, but I can’t get money.” Or, “I can’t get funding. So, could you fix that for me?”

02:16 EV: [chuckle] Well, I hope so. That’s sort of the purpose of the talk, that if that’s how you feel, you’re doing it wrong. And it’s… Finance is not that hard. It’s actually pretty easy. If you can handle content strategy, you certainly should be able to handle budgeting and winning money for your department. There is a reason that your corporation has a department. They’re already spending money to have the department. They should also be willing to spend money to help the department function more effectively. But I think a lot of departments fall down in how they go about getting the money they need to run effectively, and as a result, they don’t get the money. And it’s really their own fault.

02:55 SO: So they’re underfunded and they’re expected to run on a shoestring. If you’re talking to somebody who’s new to tech comm management, how do they go about changing that? How do you manage your finances?

03:08 EV: Well, I think the first thing is you have to understand the fiscal calendar. Companies operate on a fiscal calendar that’s not usually the same thing as the regular calendar. We think of January through December. Most companies run on a fiscal calendar that might be something else, like say June through… What comes…

03:28 SO: May.

03:28 EV: June through May.

[laughter]

03:31 EV: Can you tell I haven’t worked on that fiscal calendar in a while? Coming from Dolby Labs, we had a fiscal calendar that ran from October through September. So the first thing you need to do is get over thinking that year-end planning starts in October. If you think that year-end planning starts in October, and you’re on that fiscal calendar, you’ve already lost the game. Year-end planning starts in Q4, whenever that is. So if you have a fiscal calendar that starts in October, Q4 is three months before that, it’s September, August, July. Probably your budget planning process at the company starts in July, if you’re on that fiscal calendar. So three months ahead of whatever your fiscal new year is. Back up a little further. If that’s when your manager is asking you for your budget for the year, you’re already too late, because you need to have spent some time with your team figuring out what budget you need to ask for. So if you ask me, budget planning starts in Q3. That’s the first step, just being ready and working on it at the right time.

04:40 SO: And so, let’s say I want to introduce, instead of just, “Here’s the budget and for next year I’d like 3% more of just everything due to inflation and no particular initiatives.” Let’s say I do have a major project. I think that it’s time for the organization to make some changes to the content, maybe change tools, maybe move into XML, whatever. And that is a big investment, so what does that look like from a budget finance point of view?

05:07 EV: It’s huge, yeah. For a major project like that, you might need to spend a year planning it. And getting your argument together, getting your budget together, laying out what some milestones will be if you win that budget, and you can start moving forward. Your executives, if they’re going to be spending that kind of money, are going to want to know what they’re spending it on. So that could be a year right there, just persuading them. First bringing up the subject of “Okay, we’ve got some problems with our current process, or our current tool set, or the results we’re producing,” whatever your driving reason is for taking on the change. First warm them up to the idea that this is worth talking about.

05:53 EV: Then, start introducing them to the things you could be doing better, and the better value you could be producing if you had a process that was more flexible, or whatever the case may be with your project. Get them on board with the idea. Educate them a little bit on what the range of possibilities are, because let’s face it, they are not tech communists, we are. We need to educate them on how technical communications work, what some of the goals that a good tech comms team would have. Might not be on their radar, they just might be thinking that your job is to produce PDFs. It might be necessary to get your executives on board with the idea that you could be doing web publishing and producing documents that are far more accessible and valuable to the customers than what they think they’re paying you to make.

06:49 SO: So you convince… Or you, I guess, educate them really on the idea that a PDF-only workflow is not good enough, and in order to then make that change, here’s what we need to do.

07:01 EV: Right. Right, so the first step is always selling ’em on the value. Why do you want to do something differently in the first place? Telling them about the problems in your process is probably not a great way to get there. Telling them about the value of doing some other things, or doing some things differently, that will get them a lot more interested. Get them excited in why they should spend some money. Then you start breaking it down on what kinda money you’re going to spend and what you’re going to spend it on. So start with value. You always have to start with value, that’s what they care about. I always hear folks in tech comms complaining that they can never get money and their executives hate them because they’re a cost center. And I’m sorry, I hate to be obnoxious, well, maybe not…

[laughter]

07:52 EV: Okay, well, I’ll pretend that I hate to be obnoxious, but if that’s the way they’re treating you, you’re already doing it wrong. If they don’t realize that you’re a value center, you’re doing it wrong. Tech comms is one of the cheapest departments in a company. Let’s face it, you’ve got people, you’ve got salaries, you’ve got very few tools. And most of those tools really aren’t anywhere near in the cost range of the other departments in your company. You don’t have big, giant server rooms and nuclear reactors and so on. You’ve got people typing.

08:30 SO: [chuckle] I like the idea of not apologizing. Because I…

08:33 EV: Definitely not.

08:34 SO: I think I hear that from a lot of people, this sort of, “Oh, you know, we know that we’re not important.” It’s like something out of Charles Dickens. “Please, sir!”

[laughter]

08:47 SO: So how do you… Where do you go with that? How do you prove value? How do you show… How do you convince people and what does that argument look like?

08:57 EV: Well, that’s your job all year round. Reminding people what you’re doing and why you’re doing it. For most people in tech comms, it’s about supporting your users. It’s about enabling your business partners. It’s about bringing products to market or helping people use the products you’re making or the services or whatever. That’s why you’re there. You’re there because you do bring value. It’s a good idea to learn how to measure the value that you produce, and the classic thing is reduced calls to tech support. It’s kinda hard to measure in some situations because if your company’s logging the calls that are coming in and they’re not keeping track of what the calls are for, it can be a little hard to make that argument. But, it’s pretty basic. They also have a support department. And what’s the support department suffering from? It’s not that hard to point out the value is there, because otherwise why are you paying for it? Not the most elegant argument in the world, but don’t be afraid to state the obvious.

10:10 SO: Yeah, in terms of tech support, even if we can’t get good numbers on that, we’ve had pretty good luck explaining that clearly when somebody calls tech support, that’s a one-to-one conversation, and if I write a document that explains how to do something and post it on the web, then that’s a one-to-many, right? A 100 people that have that problem can read my document, or a 100 people can call, and clearly a 100 phone calls is more expensive than a 100 people reading a document. So then you have to look at the question of how expensive was it to actually develop and publish that document? The other one…

10:46 EV: Exactly. And you’ve just made the argument for several systems. Better support call tracking, better FAQs, recognition that FAQs are, perhaps, identifying the gaps in your documentation, yeah.

11:03 SO: So what kind of arguments do you see over in localization?

[laughter]

11:10 EV: Yeah, localization is another group that famously gets thought of as a cost center only. Because that’s what the localization manager usually does, is spend a whole bunch of money and doesn’t ever have any revenue to show for it. But localization project managers never ask to do new projects for their health or for their amusement. They’ve been asked by somebody to do the new project. So the first question you can ask in localization is, why are we doing this project? And there’s your answer right there. There’s a business opportunity that you’re trying to make, and whoever is asking you to do it, they’re arguing for your value. You’re probably not thinking about it that way, but it’s true.

11:56 EV: Now, if you succeed, and you get something out there localized, more than likely your sales are going to pick up in that region that you’ve just enabled. Unfortunately, it’s the sales people and the business managers who are going to claim credit for that, if you let them. So it’s a good idea to remind people, “Before we localized this project for you, your revenue looked like this. After we localized this project for you, your revenue looked like this. Gosh, do you think localization contributed some value?”

12:32 SO: We’ve had numerous cases where our clients have told us that they shipped a product to some country and their equipment or their product is literally sitting on a dock in Latvia, [chuckle] and Latvia customs is saying to them, “No, I’m sorry you cannot import this and you can’t sell it here because you do not have technical content in Latvian, and until you do, this stuff is going to sit on the dock, and oh, by the way, we’re going to charge you rent.”

13:03 EV: Yeah, I’ve got one that’s even better. I was asked to get something localized for a product that we needed to ship into Korea, and the reason for localizing is that those customs regulations required documentation to be in Korean. And I penciled together a budget in approximately 60 seconds that it would be, I think, $10,000 maximum, and I then spent well over $10,000 in email exchanges with all kinds of people who didn’t want to pay the $10,000. We easily spent the $10,000 in our salaries arguing about who was going to pay the $10,000. And what was really ridiculous about it is that if we had sold a single unit of that product in Korea, it would have been $40,000.

13:55 SO: Well, there you go.

13:58 EV: So I don’t really buy it that localization’s too expensive, especially not for that project. Arguing about it is what’s expensive.

14:09 SO: Yeah, we get… Some enormous percentage of our content strategy projects are actually driven by localization issues, because the “localization is too expensive” argument, or actually it’s usually localization takes too long. There’s too much of a delay. We finish the English, we want to ship Korean and it takes six months, and why is that?

14:30 EV: And another mistake is thinking that that’s different. If something takes too long, that’s also a cost.

14:36 SO: Oh, absolutely.

14:37 EV: Time is money.

14:38 SO: And yeah, so that time-to-market issue can be actually a primary driving factor behind some of the content strategy projects that we do. That if we can fix the source content, then we can fix the target delivery issue. So…

14:56 EV: Another driving factor is that since most tech comms departments don’t have too many writers, and they don’t have too few projects, there’s a bandwidth problem in the department. And if you have processes that are inefficient, the tools you use, the process you use that speeds up localization is also going to speed up internal process, and if you can get your localization process, translators are always asking great questions about the content that you wrote that wasn’t clear enough, if you can bring that forward in your schedule so that they’re asking the questions before you’ve published the vague paragraph in English, that your English content is also being approved. So spending that money on localization and on process improvement to support localization also supports the English doc quality. That’s another value measurement that people forget to point out to executives who are trying not to spend the money.

16:00 SO: So we’ve talked a lot about value, and I think that a lot of what we also see in our client base is people being asked to sort of do more with what you have or do more with less, and that leads us to this question of outsourcing and offshoring. What’s your take on that from a finance budgeting kind of point of view?

16:23 EV: Well, since you’re asking me to speak about it from finance and budgeting, I won’t go into the question of the quality of the work you’re going to get when you offshore. In some cases… Oh, I’m going into it, aren’t I? Well, let’s go into it for a second. Sometimes you should offshore. Translation is a great example. If you have somebody in Japan, living and working in Japan, speaking the language and hearing the language in your industry in Japan, they’re going to do a better job of Japanese translation than some Japanese native who happens to work in your New York office. So the quality can be much, much, much better when you offshore. On the other hand, sometimes people offshore to just get the problems out of their house and pay cheap labor to do it. Well, if you ask me that’s usually throwing good money after bad because you’re asking, for instance, programmers in some other country that you’re never ever going to talk to about what the point of your product is to fix bugs in a code base they don’t understand, and you’re never going to explain it to ’em. That’s probably a bad idea. So that’s the good or bad from the perspective of the quality you’re going to get and why you’re doing it.

17:33 SO: But since today’s topic is budget and finance, it can be deceptive. Offshoring costs often seem cheaper, but they’re actually not cheaper because of that quality trade off. Also… Well, let’s make the case for offshoring. When you… And it’s not even really about offshoring, it’s about outsourcing. You might be outsourcing work to a contractor down the street as opposed to somebody in another country. The tradeoffs that I tend to think of as a people manager are mostly negative, that I’m going to be pouring lots of training into people that are not going to be around a year from now. And that’s a waste of my time and resources because that talent goes out the door, everything they’ve learned goes out the door. That’s a great big loss for me as manager. What you have to remember is that your managers and the finance department see it the other way around. That when you hire an employee, you are taking on a permanent cost for the rest of eternity because it’s hard to fire people, and it’s expensive to fire people. So if they don’t work out or if you don’t need them again, by the end of the year you’ve got a problem to solve.

19:02 EV: So if I hire somebody for a three month project to get three months of work done, I personally as a manager don’t enjoy that because I’m going to pour three months of effort into training them, and then I’m just barely going to get any work done. Finance loves that, though, because they know that the end of the three month project, which might have turned out to be a bad idea and they don’t even want to finish the project, they can just stop paying the consultant. If I hire somebody for that three month project or for what I believe is a long future of three month projects, I like that as a manager because I’m investing in them, and I’m building up their skill set, and I’m building up the value that they’re going to return for me. Finance doesn’t like it because I’ve just signed up an annual salary, and the cost of an employee is not just their salary, it’s usually some factor of salary cost like one and a half times or two times.

19:58 EV: I think the fully loaded cost of most corporate employees in the United States is twice their salary, which might sound crazy but there’s parking, there’s health care, there’s office space, there’s equipment, software licenses. There’s a whole bunch of training. There’s a whole bunch of costs to an employee besides just the salary they pay. There’s also the long term cost of having them on your books, and what that looks like to shareholders. There’s a reason that corporations cut jobs when their finances are in trouble, and that’s because it makes shareholders happy. When you cut jobs and you cut permanent ongoing salaries that you were otherwise going to pay into eternity, that looks really good to shareholders who think you need to cut costs. Doesn’t look so good to employees who are trying to get job security and have probably earned it, but that’s how finance people think about it. So I think that we people managers at the corporate level who are thinking about offshoring something, we need to understand why finance wants us to do it. You need to at least be able to prepare… Excuse me, you need to at least be able to make the argument in terms that line up with how they’re thinking about it too.

21:15 SO: Right, because they very nearly literally don’t speak our language, right?

21:21 EV: Yep. Absolutely not, yeah.

21:22 SO: Start talking [21:23] ____…

21:25 EV: Well, it’s like the joke of “if it takes 60 players to play the Beethoven’s Symphony 40 minutes, how long does it take 80 players to play Beethoven’s 9th Symphony?”

[laughter]

21:37 SO: I’ve heard another version of that, but I think I like that one better.

[laughter]

21:41 EV: And then, the solo piano version takes two or three weeks I think.

[laughter]

21:48 SO: That’s great. Okay, so… [laughter] I have a feeling we could go on for a very long time, [laughter] but in speaking to somebody that will say, “Okay, well, here I am as a manager, and they’ve handed me this budget thing and I’m not a finance expert,” what’s the number one thing that you would tell them?

22:10 EV: Well, first of all, it is your job and you better not think of it as administrivia, that will hurt you. It takes money to do our function, whatever that function is. We’re talking tech comms, but this is universal. It takes money to do stuff. Training, salaries, software, tools, hardware, office space, it all takes money. So if you want to be able to get stuff done, and especially if you want to be able to get stuff done smarter and better, you need to know how to ask for the money to get it. A lot of this is just practical and it’s taking responsibility for it. It’s knowing that in Q3, it’s time to start polling your team on what they’d like to be able to do next year, what conferences they want to go to or classes they think they need to take, what special projects they think would help get improvements off the ground.

23:07 EV: Start polling your team early, beginning in Q3. “What do you want to be able to do this year? What do you think we as a team need to be able to do this year?” Never mind the large strategic projects we were discussing earlier, where you spend a year with the executives. Bottom up, your team also needs to think about what they want to do in the next year or so. Get that figured out. Then think about what else do you need to be able to do this thing. It’s maybe not just the software that you want to buy, but also some time, some training, some classes, some books on how to use that new software. Build that up starting at your team level. Think critically as a manager about which of those things you think are good idea, which things deserve your support and you’re going to bat for them when people above your head want to cut back further.

24:02 EV: Be prepared with your arguments for why these are good ideas. So budget building usually does start with a bottom up thing where you’re putting together a first ask from your team. You might be getting a baseline budget from finance like, “Here’s the money we’re going to give you this year, tell us how you’re going to spend it.” And it’s probably some percent up or down from what you had last year. Well, think about that, you’re not ever going to get substantially more money for doing the same activities this year that you did last year. So if you have new activities, if you have new reasons for spending more money, which could be as simple there’s more projects to do, recognize that you have to make that argument. “Yeah, you just can’t just give us 2% less money than last year because you’re expecting us to do 30% more work next year.”

25:02 EV: Anyway, you do generally get some version of last year’s budget back as your starting point for this year’s budget. Spell out where you’re going to spend it, what additional money think you need. Recognize that if you could build up your budget over time, you will get there someday. This is something where in business you have to recognize that business finance is not always the same as personal finance. In personal finance, I’m always looking to save my money to spend less of it, to spend it later, to keep it sitting in savings longer, that sort of thing. In business finance, at the corporate level they want to do that, and at your department level, you sorta want to do that. It’s called fiscal responsibility. But what’s more important in business finance is spending what you said you were going to spend on the things you said you were going to spend it on as well as earning what you said you were going to earn on what you said you were going to earn it on. That’s how shareholders judge our results.

26:13 EV: So if you budget for something in Q2, a big Q2 thing, do that thing in Q2 and spend that money on it. If for some reason you can’t do that thing in Q2, have a plan for that. Don’t just let that money slip through your fingers. If there’s something that you can move from your Q3 plans into Q2 so that you still spend the money you said you were going to spend, and then maybe you can borrow your Q3 money to do the Q2 thing that you couldn’t get to, that’s always better than just giving up, letting go, not spending the money you said you were going to spend. If you don’t spend the money you said you were going to spend, you’re never going to get it back.

26:53 SO: So it’s sounds as though you’re saying that finance is… Essentially, it’s a deliverable just like anything else.

27:00 EV: Oh, that’s good, can I use that line?

27:04 SO: You may use that line.

[laughter]

27:06 EV: I like that. Yeah.

27:07 SO: Okay and…

27:08 EV: It really is, it really is.

27:09 SO: Yeah. And I think that’s very helpful because as I said probably 90% of the people that we work with just don’t have a lot of experience dealing with budgets and asking for anything, let alone some big strategic investment.

27:26 EV: Right.

27:26 SO: So I think this is very helpful to them. So I think on that note, we’ll wrap it up. Looking forward to seeing you in a couple of weeks in Stuttgart.

27:35 EV: Can’t wait to eat with you.

27:37 SO: If any of our listeners are going to be in Stuttgart, let us know and we will share all of our best beer and dumpling restaurant locations. And thank you for doing this. I think it was very helpful, and I will see you soon.

27:53 EV: Looking forward to it.

27:54 SO: Yep. See you soon. Bye Erin.

27:55 EV: Bye-bye.

27:58 SO: Thanks for listening to the Content Strategy Experts podcast brought to you by Scriptorium. For more information visit Scriptorium.com or check the show notes for relevant links.

About the Author

Sarah O'Keefe

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Content strategy consultant and founder of Scriptorium Publishing. Bilingual English-German, voracious reader, water sports, knitting, and college basketball (go Blue Devils!). Aversions to raw tomatoes, eggplant, and checked baggage.

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