Technology Adoption and Competitive Advantage in the Translation Industry

Project/Open

Technology Adoption and Competitive Advantage in

the Translation Industry

Project/Open

Contents

What is Project/Open?– Project-ERP– What is Open-Source?

Competition in the Translation Industry– Sources– Arenas

Technology Adoption– Example: Translation Memories

New Technologies Project/Open Modules

Project/Open

What is Project/Open?

Project/Open What is Project/Open?

“Project-ERP” Integration Solution for

Translation Agencies 100% pure Internet

It’s mostly free software!

We earn our money with additional modules, installation and support

Projects

UsersClients

Costs

FileStorage

Work-flow

Sales

TradosIntegra-

tion

ProjectForum

FreelanceDatabase

Invoicing

PurchaseOrders

Project/Open

What is Open-Source?

Everybody can use and copy open-source programs

“Science model”: Everybodycontributes and shares

Mouth-to-mouth marketing

Development costs are much lower Sales costs are much lower Revenues from installation & support are

sufficient

Project/Open

Competition in the Translation Industry

Project/Open Translation Value Chain

MLV

Clients PM EditingSales Staffing QC Trans.QualityMan.

The “classical” MLV (Multi Language Vendor) uses a lot of freelancer (“Editing” and “Trans.”) to provide the service for his customers.

Only a few language resources (“QC”) are working in-house as staff.

The “Classical” MLV Model

Project/Open

MLV

SLV

MLV

Translation Value Chain


Larger or more sophisticated (localization) projects require specialized resources, so the MLV needs to subcontract to specialized SLVs

However, these SLVs are not allowed to communicate with the client directly, resulting in a huge overhead.

The “valued” contributed by MLV is limited to sales, QC and PM

Subcontracting to SLVs

Project/Open

SLV

MLV

SLV

MLV



As a result, MLVs get frequently bypassed or “disintermediated”

Customers start to work with sophisticated SLVs directly and save up to 40%

Bypassing the MLV

Project/Open

SLV

MLV

SLV

MLV



MLV Defensive strategies

MLVs try to defend by “integrating upwards” towards the customer to create lock-in and by beefing up their sales force

Lionbridge’s losses have reduced since 2002…

Project/Open

This feels like the Californiagold rush. Just make sure to sell tools and denims…

We are selling Translation Workflow… :-)

SLV

MLV

SLV

MLV



Arenas

Fighting Arenas

Project/Open

Arenas and Strategies

CustomerIntegration

- Learn

- Improve - LearnSales

Staffing

ProjectManagement

- Learn

QualityManagement

“Production”Organization

- Improve

- Specializeon the language

- Improve

- Improve

- Learn

- Learn

- Improve

SmallMLV SLV Freel.

LargeMLV

Service- Learn

- Extend/ Defend

- Defend

- Defend

- Defend

- Improve/ Defend

- Defend

- Improve/ Defend

Arena

Project/Open

How to fight?

Best management practices in each area/department

IT tools

Competitive „Weapons“

StrategicOperationalEfficiency

Specialization Languages subject area industry sector, . . .

Size . . .

Project/Open

Example: TM-Adoption

Project/Open TM-Adoption

Benefit Very useful (saves 20%-

50% of the work)

Driving Force Intense Competition,

particularly after the advent of the Internet

Why did adoption take so long?

Translators are normally not very tech-savvy.

TMs became easy to use only with the appearance of Windows/ Mac OS

Figures from LISA 2002 TM Survey

Interpolations

20050%

20%

40%

60%

80%

100%

1990 1995 2000

Competitive Advantage

for Early Majority

Companies that replied to the LISA 2002 TM Survey

Project/Open Types of Adopters

Source: Everett Rogers, “Diffusion of Innovations”, 19620%

20%

40%

60%

80%

1990 1995 2000 2005

100%

LateMajority

Laggards

EarlyMajority

EarlyAdopters

1990 1995 2000 2005

Innovators (“Techies”)– Appreciate technology for its

own sake Early Adopters („Visionaries“)

– Will accept an 80% solution Early Majority („Pragmatists“)

– Want a complete solution– Want to see it working

Late Majority (“Conservatives”)

– Focus on who else is doing it– Emphasize maturity of the

technology Laggards (“Skeptics”)

Innovators

Project/Open

Technology Portfolio

1995 2000 2005 20100%

20%

40%

60%

80%

100%

1980 1990

Translation

Memories

1985

Email inTranslationCompanies

Fax in TranslationCompanies

Qualitative curves for Fax and Email adoption

Project/Open

New Technologies

Project/Open Translation IT Trends

Problem Clumsy handling of files

Communication in large project teams

Hassle to manage TMs What is quality??? Price pressure, complex

freelance market

Long PM telephone calls with freelancers

Solution Extranets for file download/

upload (FTP-Servers, Web-Access, …)

Project Collaboration

Distributed TM Quality Management/ Database Integrated Freelance/ Provider

Databases (across offices, integrated with Quality DB)

Freelance Self Service

Project/Open

Technology Portfolio

1995 2000 2005 20100%

20%

40%

60%

80%

100%

1980 1990

Translation

Memories

1985

Email inTranslationCompanies

Fax in TranslationCompanies

Qualitative curves for Fax and Email

Project-ERP

DistributedTM?

Project/Open Jochen Hummel (Trados)

„For the next wave of innovation, however, the key ingredient is what we at TRADOS are calling “collaborative workflow.”By combining technology support for localization project managers with a platform that provides task and process automation along the entire supply chain, collaboration between corporations, language service providers, and translators will reach a degree of transparency and efficiency that was heretofore impossible."

"But here’s the key: it is only by making improvements along the entire supply chain that the industry can be transformed and enjoy the benefits of its next wave of growth.”

Jochen Hummel, CTO Trados

Source: Client Side News 08.03

Project/Open

MLV

SLV

MLV

SLV



Project/Open Optimization Potential

The analysis of the optimization potential has lead us to the modules of Project/Open

The introduction of IT-tools is frequently meant to improve best-practices as well.

Projects

UsersClients

Costs

FileStorage

Work-flow

Sales

TradosIntegra-

tion

ProjectForum

FreelanceDatabase

Invoicing

FL-PurchaseOrders

1

2

3

4

56

7

8

9

10

CustomerIntegration

Sales

Staffing

ProjectManagement

QualityManagement

“Production”Organization

Service

- Integrated Workflows- Multilingual CMS- Custom Apps.

- Sales force automation- CRM- Data Warehouse

- Integrated freelance databases

- Quality database, integrated with freelance database

- Translation Workflow- Semiautomatic PM- Balanced Scorecard

- Internet Project Collaboration

- Intranets/ Extranets

- Service Mgmt.- CRM- Scorecards

Project/Open

Conclusion

Know in what arenas you are playing Focus on a single area at a time Choose your weapons Don’t chose the wrong ones!

Frank [email protected]

Project/Open

Documents

Technology Adoption and Competitive Advantage in the Translation Industry