White Paper: ROI for Technical Documentation Outsourcing

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1 Abstract Outsourcing business services is a regular process in the present global high-tech world. This business has grown to encompass knowledge processes along with the business processes in the recent years. Outsourcing of technical documentation is proving to be an investment that has high potential returns. However to en-cash this potential every outsourcer needs to understand what he stands to gain eventually before implementing the strategy of outsourcing. This white paper tries to draw attention to the implementation of ROI concept in technical documentation outsourcing and list out the various subsequent returns. It also highlights some of the factors that drive outsourcing technical documentation as well. Introduction Outsourcing has come long way in widening its scope from the production of goods in the earlier days to comprise the business and knowledge processes in the recent years. With the advances in information technologies, communication networking and their business applications, together with the globalization of the world economy, have led to the emergence of the new areas of outsourcing besides HR and Financial Services. Technical documentation is one such process where there is scope for outsourcing and specialization. As today s world depends increasingly on high-tech products and services, every innovation creates a demand for documentation. User guides, technical reports, maintenance procedures, assembly instructions, project proposals, QA manuals to name a few are required by business and domestic users. Technical documentation has become an unavoidable scope of doing business, but it also presents opportunities to drive sales, maximize customer satisfaction, and radically reduce the support costs. However, the technology today has enabled the entrepreneurs to outsource this process in order to make it cost effective and focus more on the core competencies. Why should you outsource Technical Documentation? Technical documentation outsourcing allows being economically efficient, because you pay for the service only when you use it. It s like electricity you don t pay when the lights are off. Outsourcing can offer definite advantages - but only if you do it right. Simply stated, it is the "make or buy" decision applied to the technical products. The key questions involved: Should the company recruit its own technical writers? Should the engineers develop products or find time to write customer focused documents? Should the company develop its own documentation? Should the company hire its own systems staff? Should the company acquire its own facilities? Should the company develop its own systems? Should the company contract for its own network? Should an organization contract services to an outside specialist that has: - Already achieved the economies of scale - Allegedly attracts the best full-time systems professionals - Gets the most processing power, development capabilities and tools for the least per unit cost? What is Return on Investment? Return on investment (ROI) plays a very crucial role in deciding whether to make or buy an investment. ROI is the comparison of the money earned (or lost) on an investment to the amount of money invested. In case of technical documentation process, the term ROI refers to: Direct and indirect cost reduction to company The increase in revenue based on the business value added to the product by this process The Writers Block Page 1 of 5

2 The value addition can be qualified in terms of speed of the documentation to make it to market on time, ahead of competitors, with improved quality and economy in cost. If done properly, outsourcing technical documentation can yield dramatic benefits. Some firms believe to have achieved a cost saving of 40 to 70 percent, with no loss of quality or compromise on data security. When a documentation service is involved at the beginning of the product development, the documentation will be well written and accurate. This reduces the cost to fix errors after your product has gone out the door. However, calculating or estimating the ROI for the technical documentation asks for more than a simple comparison. Very few organizations collect and maintain the detailed metrics needed to compare new tools and processes with the current solutions of technical documentation. Further, some of the benefits of outsourcing technical documentation are difficult to quantify. Nevertheless, it is possible to provide guidelines about the investments and advantages an organization can benefit by outsourcing technical documentation. The next section throws light on the various factors that are needed to consider while determining ROI of the technical documentation. Factors affecting the Make or Buy Decision A good user document can turn a one-time buyer into a repeat customer. Once a product is purchased, the document becomes the product s spokesman. Documentation is a cost of doing business, but efficient management of this process can reduce this cost without degrading the products and services. Companies should consider what they require to execute, to accomplish outstanding documentation that communicates complex information while minimizing support costs, and maximizing customer satisfaction. Thus the first challenge for a strategist in any business is to make a decision on whether to do in-house documentation or outsource the documentation. The make or buy decision and the ROI of technical documentation are affected by two major factors: The reduction in the cost (Direct benefit) The additional benefits (Indirect benefits) Several analysis of the Total Cost of Ownership of technical writers shows that outsourcing has more rates of returns than in-house sourcing. Following could be some of the reasons attributing to the same: Company having more writers than required No time to hire and train Technical Writers Documentation team is overloaded and under-staffed Added expenditure accruing due to training and paid vacations of personnel s Higher sustenance of the team resulting due to a slack in the product development and releases The Direct Benefits of the outsourcing The Direct benefit of the outsourcing can be viewed under the following broad headings: Reduce product development costs The total product development cost comprises the complete ownership cost and the additional internal costs such as labor, hardware, and facilities needed to implement the system along with the vendor price. Outsourcing technical documentation results in the following product development cost savings: Reduced labor costs The need to maintain multiple versions of the same content is eliminated Staff reduction or reallocation of staff resources is a cost saving to the organization Reduction in training costs It reduces the costs associated with recruiting, hiring, and retaining competent technical writers Real estate expense savings By reducing staff, additional real estate is not required It saves additional investments on infrastructure, like computer, software and development tools, etc. The Writers Block Page 2 of 5

3 Reduce operating expenses Saving on investments of resources Saving on expensive software tools, which may become redundant after a period. The process of information gathering, formatting, reviews and executing the documentation process is done by the expert. Single point of document management Documents are written, and if required maintained and managed by a single source. It is easy to publish content to different Medias. Avoiding rework Due to systems and processes the quality of deliverables are high. The documents produced have greater consistency and accuracy. Faster time to market In this competitive era, success is with those who deliver quality products before the market is flooded with the other products. Organizations can achieve this by working in parallel with documentation specialist to deliver comprehensive deliverables. The Indirect Benefits of the outsourcing Documentation may increase sales indirectly, by helping companies better identify and satisfy target markets. Regardless of what the service is, outsourcing - in general - is a good solution for almost all companies. Some of the distinct benefits to technical documentation outsourcing that make it an attractive alternative to hiring part-time or full-time employees are as under: Cutback on paying remuneration - Vacation, sick days, insurance, social security, etc. No "down time" due to the natural learning curve that comes with all new hires. Pay only for what you need and when there is a requirement. Meeting quality standards - Professionals deliver quality documents. This in turn, drives sales of your product, maximize customer satisfaction, and radically reduce your support costs. Reducing instances of customer support - Good documents help customer solve their problems and answer their questions. This reduces their dependencies on Customer Service. Focus on the core competencies - Often developers or marketing staff are expected to produce technical documentation or online help in addition to their usual work. Outsourcing documentation gives them back the time to focus on their real jobs. Quality of the documentation - a style statement- most companies do not have a defined documentation team. Most of the employees contribute to writing the deliverable. This results in documents being written without style, accuracy, standards and leaves the end user completely frustrated. A specialized documentation service provider develops documents always keeping the users in perspective. Unbiased perspective It easier for an outsider to provide an honest feedback and suggest areas for improvement without being unbiased. The path to lower costs The following section cites few examples on how good documentation can help reduce the cost to a company. Post-sale cost reduction Post-sale costs come in many colors. Among them are, count complaints and returns, support calls, training costs, and litigation. Depending on the product and company, these costs can become quite impressive. To provide one reference point, in 1997 Microsoft put the cost of a single phone call to a Help desk at $20 (TechScribe, 2003). That s a figure to make accountants who do the math, a bit faint (Rob Webber, Jose Druker). Good Documentation means fewer client support calls and lower support costs. This in effect reduces the annual customer service and support costs. A study was conducted on the impact of having professional technical writers create documentation at General Electric. The 5-month study showed that documentation produced by professional s generated 59 support calls and documentation produced by non-professionals generated 641 support calls. The Writers Block Page 3 of 5

4 Expensive Corrections It is expensive to correct documentation and its impact after it is released to customers, when one factors in the cost of tracking errors, publishing release notes, fielding support calls, updating source documents and so on. Happy Customers keep coming back! Poor documentation can lead to loss of goodwill with customers and has its own set of costs and consequences. On the other hand, good documentation realizes into big savings. If customers are happy they will only keep coming back with more requirements and perhaps with more customers. In one instance a product manual that was rewritten, reduced the customer calls to units shipped from 1:18 to 1:26. Calculating ROI for technical documentation involves numerous factors and analytical tools. One needs to determine what elements need to be measured and how to measure them. Key elements include per customer cost for the implementation, labor cost, maintenance (including any employees hired to maintain the system), user training, upgrades, and general overhead. The gross profit and the success rate, which is normally expressed as a percentage should also be included. One needs to determine what factors will be included in the success rate, such as office efficiencies; sales growth, customer growth etc. and one need to establish how they will be weighed. Outsourcing Documentation Services Technical documentation can be outsourced for different reasons as mentioned below: Formatting and Editing - Few companies have content developed in house by systems people. These documents are outsourced for editing, formatting and presentation. Writing - Some Organizations are also turning to service providers to deliver original content within very specific guidelines and formats. Content Creation and Enhancement - Advances in digital media are such that you can transform written text into dynamic, interactive products. For example, graphic designers skilled in programs such as Flash, Shockwave, and Photoshop create illustrations, tables and charts that make content visually more compelling. They also create dynamic online content through interactive features such as questionnaires and real-time tests. Marketing Material - Documents such as white papers, case studies, brochures, marketing teasers, Service Offerings are also outsourced to service providers. Product Related document: - All documents related to products, starting from customer specifications, flyers, design specification, user guides, FAQs, Installation guide, Administration guide, test reports, quick reference guide are outsourced during the different phases of a product. Summary The outsourcing model has proved extremely successful in enhancing quality of service, increasing profitability and reducing operational costs that it has become an indispensable tool for companies that want to remain competitive. Outsourcing of technical documentation is proving to be an investment that has high potential returns. Every investment has its own reason and calculation of high ROI. The term ROI is about saving money in technical documentation industry by cutting down cost and saving on hidden cost. Without a doubt, outsourcing technical documentation services to an experienced third party can help companies achieve dramatic cost savings sometimes as high as 70 percent. References Anthrobytes Consulting (2001), Outsourcing Product Documentation Reduces Project Costs. Bobby Lahiere, (2004), Inhousing vs. Outsourcing, Translators Inc. Deborah Clifton, Outsourcing Documentation Development: Assessing the Offshoring Option, The Integrity Group, Houston TX. Documentation Outsourcing Nocturne Communicators. The Writers Block Page 4 of 5

5 Innodata Isogen White Paper, Outsourcing Editorial Services Seven Tips for Reducing Costs and Improving Quality. Mead, Jay Measuring the Value Added by Technical Documentation. Technical Communication (45). Outsourcing: Time to Deliver Results Gartner Inc. Rahul Sharma and Amar Gupta, New Outsourcing Opportunities in India Rob Webber, Jose Druker, Why Documentation Matters, and Why Outsourcing Makes Sense, white paper, Innovatia. TechScribe. (2003), Improving Product Value through Quality Documentation. Warren S. Reid,(1996), Outsourcing: The 20 Steps to Success, WSR Consulting Group LLC. TWB Contacts TWB is a leading technical documentation development and design company. Should you want more information from the TWB repository of information on techniques in technical documentation please contact: Global Sales Rakesh Shukla rakesh.shukla@twb.in India Sales Ranjith Radhakrishnan ranjith.radhakrishnan@twb.in The Writers Block Page 5 of 5