Switching Off Autopilot: The Power of Choice Running a Translation Company translation jobs
Home More Articles Join as a Member! Post Your Job - Free! All Translation Agencies
Advertisements

Switching Off Autopilot: The Power of Choice


Become a member of TranslationDirectory.com at just $8 per month (paid per year)




Versão em português


An innovative business model takes off in the localization industry?

Adam Blau photo Merger mania is back. After a break from the last round of high profile mergers and acquisitions in 2002, the consolidation seen in 2005 supports the premise that the localization industry, only 20 years young, continues to mature and become more sophisticated. Previous acquisitions, such as those from Alpnet or Berlitz, expanded their acquirer's client base and reduced redundant costs to enhance the overall bottom line. Similarly, SDL's recent purchase of TRADOS, the industry-leading TM tool, and Lionbridge's acquisition of Logoport last year drastically increased their capacity to provide technology and globalization management solutions (GMS). Integrating these GMS solutions into the globalization process will allow them to realistically address important challenges they face in reducing costs. More importantly, it will increase the flexibility and integration of the 1st Generation, multi-level subcontracting models they have built over the years. Their ability to meet this challenge will change the industry's dynamics we work in. Hopefully, only for the better.

Yet, generally speaking, consolidation is not always entirely beneficial to clients. With buyers demanding more and paying less, only the most dynamic companies with the right product and service mix can satiate their long-term needs. Lionbridge's purchase of Bowne Global Solutions reduces the options buyers can choose from to a small group of global localization vendors who can now easily exert their market dominance. Of course, buyers can also choose to work with a combination of smaller agencies that fight over the contracts but which cannot always offer the services, competencies or resources that a one-stop vendor would. The goal of this article is not to address the fears and impacts associated with market consolidation in our industry. Instead, it will address an important question buyers may be asking themselves as they develop future localization planning: Are there other solutions or providers besides these few major players, or am I forced to choose from this handful?

The answer is yes: the localization alliance model.

The 2nd Generation Localization Solution
A localization alliance model consists of fully independent localization companies operating under the same business model, project management workflow and quality standards. The alliance is not a non-profit organization such as GALA, but rather a for-profit entity that uses a single brand to provide IT companies with an alternative for their localization needs.

The obvious difference between a localization alliance and an MLV model is the fact that the alliance is a group of financially independent companies, each located in a different country, and which, by pooling their resources together, integrate and structure their service offer. On the other hand, an MLV is a single entity that has to maintain a global production and sales infrastructure. Each alliance member is not only selected by its best blend of language skills, technology investment and localization industry experience, but also for its ability to adhere to the alliance's requirements and expectations. This new business model commonly stipulates what these expectations are, such as monthly volume, quality and communication requirements. In doing so, the alliance is able to commit to a high standard of professionalism.

An alliance model also departs from the 1st Generation subcontracting model due to the following facts:

  • The work is actually performed within the alliance structure. Every member is an independent company with its own staff and structure, with local project managers, engineers and large linguistic teams to satisfy the old cliché of “global and local” needs.
  • Localization prices are normally based on the local market rate for SLVs and not on freelancing or sub-contracting models.
  • Management fees are also lower than those of the more traditional companies. Let us suppose that a typical MLV structure allocates 30% of a project's value to pay for management and overhead, where the other 60% goes to the SLV (not including the PM fee). In an alliance, the management fee may be as low as 5% because the alliance is a lean organization, with each partner supporting its own operation.
  • Alliance partners are not replaced or rotated easily, especially because another agency offers a slightly lower price per word. Furthermore, localization prices are not inflated for certain languages or underrated for others in detriment to quality, speed or reliability.

Therefore, the client can expect that quality will remain consistent because the same vendor is always performing the work. As a result, the global project manager (GPM) of the alliance and each member involved in the project develop a unique and long-lasting relationship with the client, one built on trust and which fosters the GPM's understanding of the client's specific requirements. Clients see not just price discounts, but also a streamlined production process that improves the time-to-market results with lower client-side management conditions.

Sharing Resources
The deeper an alliance spans worldwide, the more benefits it can offer clients. By piecing together the core strengths of each partner in an integrated, bottom-up approach, both scalability and size can be built to develop a localization solution to fit each client individually. For example: suppose that the alliance's Italian partner has extensive multilingual project management experience. The Italian GPM will then serve as the vital and dedicated link with the client and coordinate all the local project managers within the alliance. The Chinese office has extensive DTP skills and will serve as an outsourcing hub for DTP projects, complemented by the Slovakian partner, which has thorough software engineering and testing expertise. Naturally, it is critical that the alliance provide an open environment where each member can trust and rely on the other. The milengo alliance, for example, established the principal that there can only be one linguistic partner for each language offered. Doing so puts each partner at ease to exchange their individual experience, techniques and unique understanding of the various aspects of globalization projects.

A graphic representation of how the 2G Localization Model works

A graphic representation of how the 2G Localization Model works


Localization and Airline Companies
Strategic partnerships have become a catch phrase that is often used when two companies collaborate at some level. As a result, people may tend to take truly strategic alliances with a grain of salt. This is because many larger companies may form a “strategic partnership" with a smaller company to provide a service that their sales force has detected as missing from their service offer. This hardly provides a true benefit for their customers. At the same time, it is important to recognize that there are real alliances out there. The advertising, PR and airline industries make good use of strategic alliances to help them meet the challenges involved with building scale, resources and services worldwide.

The localization and airline industry, interestingly enough, share many similarities. Twenty years ago, airline companies confronted the challenge that localization companies now face in unmasking ways to improve and expand their service levels and the options they offer to clients, all at a lower cost.

Today's frequent flyers expect to be taken anywhere in the world with the same high level of commitment to quality, service and safety. Twenty years ago, this was not the case. Shortly after the deregulation of the US airline industry in the late 1980s, so-called code-sharing alliances between a US airline and a European national carrier quickly took off. This partnership allows one airline to sell seats on its partner plane as if they were its own, allowing it to expand its route network without adding any aircrafts. This further allows passengers to check in at the airport and obtain their boarding passes for their entire flight, simplifying the ticketing process.

Yet consolidation is not always beneficial to clients.A code-share agreement alone does not take full advantage of the full benefits an alliance can provide, which includes helping its members and increasing their service offerings without raising fixed and variable operating costs. While each airline is a fully functional and independent company in its own right, with sales offices, maintenance and operational facilities and personnel, it employs thousands of people in its home country or strategic hub and services its customers on a global scale.

In an environment where no competition exists, an alliance member's own business is strengthened by the resources and facilities of its partners. Members can develop agreements that allow them to share, manage or jointly advance the operation, management and sales/marketing resources that would be too expensive for one company to manage by itself. A Spanish airline, for example, could use the maintenance facility of its US partner while servicing its customer base in America , and vice versa. Both companies could also combine the marketing activities for the route flown in the two countries and expand their frequent flyer programs and benefits to cover Spanish and US passengers. Frequent flyer programs, while not widely used in the localization industry, are among the projects to be designed and implemented by milengo in the near future.

Goals for a Successful Takeoff

Because the airline industry has been around for the past 70 years or so, airline alliances are relatively better developed than localization alliances. For these new alliances, the biggest challenge ahead will be the successful integration of common guidelines and procedure throughout the entire globalization workflow. Integration only works when all participants, including the top management, believe in the purpose and success of the alliance so that all employees are motivated and driven to invest the time, resources and energy required for success. There are many hurdles for such a business plan, but full-scale implementation will be a differentiator between well-structured alliances today and loosely formed partnerships in the future.

The localization market will continue to develop to meet IT client's ever-evolving needs. Some vendors have made the decision to integrate proprietary technology into their workflow. Others feel that continued specialization in certain segments of the industry is their best move, while still others have thought that an alliance is the best way to provide clients with a reasonable alternative to their localization needs. Because each client's requirements are not universal in our market, an alliance model may not be an appropriate solution for certain IT companies. However, the option to choose from a range of solutions, instead of only a handful shifts the control back from autopilot to pilot. This is what will allow the new alliance model to take off.

 

Adam Blau is responsible for managing milengo's global operations as well as its sales and marketing activities in North America and Europe. Having joined the alliance during its conceptual phase, he currently leads members in the development of customized localization solutions in their respective regions and helps strengthen relationships with milengo's international clients.











Submit your article!

Read more articles - free!

Read sense of life articles!

E-mail this article to your colleague!

Need more translation jobs? Click here!

Translation agencies are welcome to register here - Free!

Freelance translators are welcome to register here - Free!








Please see some ads as well as other content from TranslationDirectory.com:


Free Newsletter

Subscribe to our free newsletter to receive news from us:

 
Menu
Recommend This Article
Read More Articles
Search Article Index
Read Sense of Life Articles
Submit Your Article
Obtain Translation Jobs
Visit Language Job Board
Post Your Translation Job!
Register Translation Agency
Submit Your Resume
Find Freelance Translators
Buy Database of Translators
Buy Database of Agencies
Obtain Blacklisted Agencies
Advertise Here
Use Free Translators
Use Free Dictionaries
Use Free Glossaries
Use Free Software
Vote in Polls for Translators
Read Testimonials
Read More Testimonials
Read Even More Testimonials
Read Yet More Testimonials
And More Testimonials!
Admire God's Creations

christianity portal
translation jobs


 

 
Copyright © 2003-2019 by TranslationDirectory.com
Legal Disclaimer
Site Map