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ClientSide News Magazine pictureWhy is localization sourcing and procurement not recognized more as a strategic and critical business activity within client-side organizations? Which aspect of the universal business construct — people, processes, or technology — can we point to for this failure? Do localization buyers lack the esteemed higher education pedigree that managers of other cost centers seem to have? Or does the convoluted terminology used to describe the localization process confuse non-localization colleagues? Do translation buyers lack adequate technology — something like a hosted, self-service bidding tool from Emptoris, Ariba, or SAP, perhaps?

Having spent considerable time on both the client and vendor side of the GILT industry, I have not observed technology as limiting the awareness of localization purchasing within the corporate arena. Rather, I have observed that localization buyers usually find themselves in the proverbial closet of mainstreamed purchasing for reasons of people and processes.

Conversations with several high-tech buyers of localization services confirmed this observation: the single barrier to mainstreaming the purchasing of localization services originates from a lack of internal collaboration — often times the effects of corporate departmental politics.

PEOPLE CREATE BARRIERS TO OPEN COMMUNICATION

Let’s examine the people aspect of this dynamic. The very background and experience level of the localization buyer has much to do with the perception of his or her value to the company. Typically, the localization buyer exhibits one of two common profiles:

1. A former language professional who was previously a technical writer, QA engineer, in-country reviewer, or perhaps a project manager. This person has a foundation in one or more non-English languages, and colleagues recognize him or her as “the go-to language person,” and little else.

2. A former operations professional, having some background in consulting or middle management, but with no original exposure to the intricacies of languages.

The approach here is usually localization as a business process, where the individual is regarded internally for having solved some other non-language related internal business problem.

Let’s focus on the language professional, one who will break out of the pigeon hole in which they’ve been placed — the language (only) expert.

In order to become more accepted as a mainstream buyer of a corporate service, and therefore gain more recognition as a valuable contributor to your company, you must speak the language of business: reports, ROI, and business value. Other business managers don’t want to hear about glossary reviews or regression testing. By framing the purchasing strategy message into a business problem and business solution context, you begin to shed the localization mold and move further mainstream.

Other opportunities for improvement are through technical training and traditional higher education certificates or degrees. Study to complete an MBA from an accredited university. Seek certifications, such as the Certified Purchasing Manager credential from the Institute of Supply Management.

Also consider conference workshops. It’s widely known which conferences and workshops you can attend to sharpen your localization skills, but what non-localization training can you seek to better align your skills with those possessed by the rest of your colleagues?

I also suggest looking to broaden your horizons by growing laterally into other areas of valued expertise. Perhaps spend some time in a position exchange or job-sharing rotation, so as to gain knowledge of finance, purchase orders, invoicing, and accounts payable. Or consider time within the legal team, to help you gain knowledge of tighter supply management through contracting. Other departments where you can learn lateral areas of expertise include product management, regulatory affairs, quality assurance, and consulting.

By expanding your skill sets into those which are more widely recognized in the traditional corporate setting, there is a greater probability that your colleagues will understand what you do as a Globalization Manager.

If your people and processes are more widely understood, you can use the common knowledge and platform to begin to breakdown misunderstandings and internal politics.

However, these solutions offer only a plus for eventually bringing your purchasing strategy forward. Consider this question: As GILT industry professionals, why do we bang so loudly on our “knowledge of language” drum, while the rest of the client-side organization marches to a beat of corporate purchasing? As we know of no Chief Globalization Officer, why not look to the Chief Procurement Officer? Aren’t the CPOs executing known and mainstreamed strategies in the procurement of goods, commodities, and services?

Research from the Aberdeen Group, who surveyed procurement executives from 100 global enterprises about transforming their practices, indicated that accelerating
procurement transformation will require the following actions:

• establish a multi-year plan
• rationalize and segment the supply base
• advance total cost models
• establish supplier development and improvement capabilities
• adopt closed-loop systems infrastructure

Apply these guidelines as tenets for your localization strategy transformation.

Purchasing strategies for office supplies to facilities costs are no longer about simply containing costs. Instead, they are about buying the answer to a strategic business initiative or a complex business problem.

IF YOU HAVE A PROCESS, DOES ANYONE KNOW ABOUT IT?

An excellent way to evangelize the value of localization purchasing is through a standard and accepted process. Using the following one, globalization buyers can dynamically shift negotiations from buying what vendors sell to buying the solution for a well-defined business problem.

1. Identify spend and sourcing goals

• The beginning of your new contract negotiation typically begins with an assembly of all stakeholders. A likely cross-functional team includes the primary project lead (globalization buyer) as well as all others who participate and influence the decision, including management, purchasing, finance, and legal. With this cross-departmental team, execute the following steps:

• Come to consensus on the spend that is contractually available for the auction opportunity.

• Identify any risks associated with the project (ample supply base, compressibility in current pricing model, qualification processes, timing of next company product release, etc.).

• Define sourcing goals, including the method (reverse auction, RFP, traditional negotiation ending in one-time sealed bid, etc.).

• Project and agree upon any realistic cost savings expectations.

• Create a draft timeline, including milestone dates for each of the seven sourcing steps in Figure 1.

• Document the results and distribute to the entire team.

2. Collect data

After the team has a copy of the draft timeline and has prioritized sourcing goals for the translation negotiation, you’ll enter into the most time-consuming phase of the entire sourcing project: data collection.

• Craft a Data Collection Template and distribute it to all stakeholders who deal with translation and localization vendors. Capture in this format the current pricing model of words and professional services, the unit cost, and extended costs calculated by the total volume per year. Be sure to include all pairs of languages as well as project management fees. The sum of this exercise should produce the historic spend for translation services.

• Validate your figures with your current translation partners. Many times, your vendor can easily provide a high-level total cost number to you in a few short days.

• Gather and assemble any existing contracts with incumbent suppliers, including minimum service levels, legal terms and conditions, rate structures, style guides, translation memory procedures, etc.

• Create a draft of your go-to-online-market strategy, possibly dividing the business into lots.

• Discuss ceiling and reserve prices.

• Gather preliminary lists of any preferred suppliers from all company stakeholders. Remember that the IT group may partner for internationalization and QA services with a different vendor than the technical publications department.

• Lastly, verify with all team members when the incumbents will be notified that the next contract opportunity will occur through a strategic sourcing process, likely resulting with an online, real-time, dynamic marketplace.

3. Recruit suppliers

Seek vendor alignment with your market differentiation. If you are a medical device manufacturer, for example, align with a vendor that has demonstrated strong experience in your field and that has references. (Be sure to check the references.)

• Spend time to enrich the existing supplier list with new supplier research. Use well-known online resource guides from industry magazines and websites. Interview other globalization buyers within your professional network of contacts to ask which suppliers worked best for them and why. Pay close attention to those who have a similar translation and localization roadmap of product.

• Prepare a capability survey (sometimes called a Request for Information, or RFI) with appropriate questions for discovering more detailed data about the suppliers you’ve identified. At this stage, it is premature to discuss pricing or the possibility of a contract. Your goal is to gain greater knowledge of the supply base and the composition of many players, including large publicly held suppliers, as well as niche SLVs, both international and domestic.

• Distribute an approved Non-Disclosure Agreement (NDA) to all suppliers who will receive any of your company information, including the RFI capability survey.

• Along with the RFI, e-mail a brief description of the contract opportunity. Include an appropriate high-level timeline for next steps and completion.

• Lastly, I strongly recommend that the globalization buyer proactively telephone all suppliers to ensure receipt and understanding of the material. This contact provides the first opportunity to judge the prospect’s interest in participation in the pending online event.

4. Prepare total cost RFQ

Although globalization buyers certainly understand the tactical steps of how to produce, test, and release international products, they seldom have adequate records or documentation of the details, processes, procedures, and overarching tenets of the business relationship. That definition of business requirements will require several iterations, so plan for this in your timeline. Draft the business requirements as a business problem that requires a partner to solve. Include documentation such as general purchasing terms and conditions, legal terms, business service level requirements, and procedures, which together comprise the total bid package. Here are some “best practice” recommendations for items to include in your documentation package:

• Utilization of translation technology tools
• Translation strategy and approach
•Specific translator expertise required (legal, technical, or expertise across plastics and metals commodities, for example)
• Minimum and maximum turnaround times for a standard document or source kit
• Type and frequency of quotation capability
• Acceptance or non-acceptance of rush charges
• Payment terms and methods
• Preferred portal for effective management of hand-off and hand-back workflow
• Incorporation of in-country review linguistic edits
• Custom invoicing and reporting in order to detail savings and ROI
• Project Manager staffing requirements
• Orientation and ongoing product training
• Naming conventions for file exchanges
• Use of glossaries and style guides, or any other corporate resource
• Grievance process

The key to creating a sound and well-understood bid package is to include any ingredient that will help the suppliers make a firm cost quotation. Equally important in the RFQ phase is gathering in writing all intangible expectations for the intended relationship. A tight contract protects and benefits both parties.

Obtain final approval from all internal stakeholders on the RFQ, including a lot structure for bidding out the business. For instance, you may wish to parse out lots of business according to geographic region (US headquarters, Japan, and EMEA) or according to output (document translation versus product localization).

Collaborate with your spend management provider to determine the platform for your online auction as well as any critical bidding parameters. Create and publish the auction in concert with the final RFQ package and agreed upon dates.

Mainstream

5. Prepare the suppliers to bid

Joao Mendes-Roter, Content & Localization Manager involved in gaming localization, shares that “Random-Logic/Cassava develops, markets, and localizes the 888 products: Casino and Poker, in 11 markets. My Team is composed of 11 Language Content Managers responsible for selecting and managing in-country localization vendors that can handle a very specific project scope: (1) Cultural Assessment/Iconography Review (Market & Product research); (2) Website Localization (both graphics redesign and text); (3) Software localization (both graphics redesign and text). Finding an in-country or in-region solution provider for this package of services is really a challenge.”

Therefore, this phase of the strategic sourcing process will force you to manage your suppliers against your defined business needs. As your localization business needs are unique, the questions arising from the suppliers will be particular to your business. Spend adequate time to address all needs, and take these guidelines into consideration:

• Confirm receipt of invitation to bid.
• Suggest training for online bidding format and confirm completion of training.
• Publish a full Q&A document to the entire supply base to maintain a fair and parallel distribution of information. Suppliers must have equal access to any clarifications during review of the RFQ requirements and business terms.

6. Conduct price negotiations

If each of the seven steps of strategic sourcing are followed, and the requirements are essentially concrete, then you’ll have an easy time comparing apples to apples in the pricing portion of the negotiation.

• Leave a voicemail for suppliers a day prior, to understand their intent to earn each contract of business.
• Consider collecting a qualifying round of preliminary pricing to determine if all participants have understood the requirements for quotation.
• Collect the qualifying round against a firm deadline, no exceptions.
• Publicize the results of the negotiation in email or report format for the cross-departmental team of stakeholders, who to this point have worked hard to collaborate on this buying decision for the company.

7. Evaluation and Award

If necessary, request a detailed cost breakdown worksheet from the suppliers. After having down-selected the suppliers to a reasonable group of finalists, allow time to schedule face-to-face presentations to better understand the bidder capabilities and potential fit for the contract. If you suspect that the sales executive will not stick to the agenda on which you wish to focus, publish a scripted presentation agenda to maintain a fair and level playing field.

Consider these guidelines and best practices to craft a realistic award decision. Analyze bid results by revisiting sourcing goals, completed RFIs, and competitive pricing bids provided during the negotiation. Your decision should not be based on price alone, but rather on how the prioritized sourcing goals stack against the results.

• Calculate your switching costs by setting a universal metric, such as dollars or hours. Use this mainstreamed metric to compute your ramp-down units or switching costs. Gauge the time and effort involved to measure the cost of orientation for a new vendor. Quantify differences in cost, quality, and turnaround time. Finally, sum these measured costs, and subtract them from your identified online savings to truly determine the bottom line cost of moving and implementing the business.
• Perform a total-value risk assessment. Avoid isolating price. Instead, consider fundamental performance factors. Assess these value characteristics numerically and calibrate results across each. Perhaps assign a simple red, yellow, green visual to demonstrate your thoughts to the internal cross-departmental team.
• Closely manage upward expectations. Involve management in your decisions and analysis. Communicate often. Globalization buyers are renowned for their unspoken charter to educate all company members. Go forth and evangelize! Create executive management reports to publicize the mitigation of risk throughout this contract decision.

Here are some additional items to consider in the post-negotiation evaluation and award:

• Promptly notify award status to all participating suppliers.
• Maintain good supplier relationships by offering to discuss any pros or cons with the non-awarded suppliers for better participation in the future. The business development teams have spent many hours on this rigorous strategic process, so a post-mortem is a must.
• Schedule implementation timeline, including full contract signature and execution, with awarded supplier(s).

CONCLUSION

Harnessing the correct combination of people, processes, and technologies to evidence a sound, risk-averse purchasing strategy will inspire localization buyers to move from the shadowed, terminology-heavy world of localization into the mainstream purchasing spotlight. Adopt the business protocols of the colleagues in other cost centers around you, rather than continuing with “but localization is so very different.” Direct your attentions towards improving the people and process components, and watch the internal barriers to localization awareness dissolve.

REFERENCES

1 Tim A. Minahan, Vice President and Managing Director of Supply Research and Strategy for Aberdeen Group, Inc. “The CPO’s Agenda Report,” March 2005.

2 Joao Mendes-Roter, Content & Localization Manager for Random Logic/Cassava, personal interview following CSN Expo pre-conference workshop. April 2006

 

ClientSide News Magazine - www.clientsidenews.com









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