Strategies for translation providers in an uncertain world… a survival guide.

Posted on August 14, 2011 by Paul Sulzberger

Sometimes, how we translators run our professional lives and operate our businesses seem to be under threat.

Human translators, although usually sceptical, cannot avoid observing the growing influence of machine translation and perhaps wondering how long will it be before a piece of software will put them out of work.

Then there is the emerging spectre of crowd-sourced translation, a phenomenon which is most certainly not going to go away [1].

And what about the sneaking suspicion that perhaps English will ultimately end up as a global lingua franca (at least in commerce and science) making most of the translation work we translators currently do entirely redundant? Certainly many have predicted the ultimate triumph of a single universal world language – from Stalin in the 1950’s [2] to evolutionary biologists today [3].

That change is coming to our profession, I have to say, is not really news to me. In my professional life I’ve seen the profession emerge from a local cottage industry and became a global business. In the space of a few decades translators abandoned their manual typewriters and got plugged into highly connected networks of global proportions. We can be sure that this pace of change is not going to slow down anytime soon.

One of the most insightful commentators on the evolving role of technology in the translation industry, Kirti Vashee, states it point-blank: “It is likely that the professional translation world is going to see significant disruption in the coming years…” [1]

On the upside, however, there has never been a time history when the demand for translation was as great as it is now – and the most informed opinion suggests that demand is going to continue spiralling upwards. CSA puts it this way:

“… the amount of content grows faster than anyone can translate it […] Many organizations throw up their hands in despair, realizing that they don’t have the resources or money to deal with this explosion of content.” [4]

There are simply not enough human translators and clearly machine translation and crowd sourcing are going to play significant roles in an expanding market. But there is also a strong argument that human linguists will play an increasingly important role in the emerging, but differently shaped translation world.

Small to mid-sized translation companies and independent translators are the backbone of the industry – but they are fragmented and are vulnerable to the developing changes. Paying attention to “business survival skills” in a rapidly changing market will be a priority for many.

Chief amongst these skills is maintaining (or increasing) business profitability – whatever happens. There are a number of obvious strategies: adapting to the changes is one and optimising the return from existing resources is another. In this post, I look at one approach to the latter – making better use of the skills and resources translation providers already have.

Making your existing resources more profitable.

Let’s look at how a small, imaginary language service provider, XYZ Translate Ltd, could leverage off its existing resources and become more profitable.

Like most small businesses, XYZ Translate Ltd is subject to the Pareto principle – 80% of its meagre profits come from just 20% of the work it undertakes. That means 80% of the work is often done at a loss or at very low margin. The company is not short of work, but it is frequently so bogged down with work which returns little profit, that they often miss out on better paying work because they can’t deliver to the customer’s time frames.

One trick for XYZ Translate Ltd is to break out of this low-margin trap: this means reducing the volume of low-margin work in order to free up resources for more jobs which return a higher margin.

Easier said than done? And a bit scary?

So let’s imagine that this is what our imaginary LSP did:

Firstly they looked at the margin they made on all the jobs they handled over the past year. Let’s imagine that they discovered that the most profitable work came from a just a couple of clients in a particular sector – let’s say from the waste management industry.

Why was this work so profitable? They got the first job quite by chance, but they realised they really weren’t set up for the task. Knowing that they would have to make a really big effort, they quoted high – and were fortunate to get the job.

But to keep the customer coming

  • They needed to invest a lot of energy into developing the right sort of resources and finding a reliable pool of translators who were (or who would become) experts in the field;
  • They paid the translators well for the work – and in return these specialised translators became very loyal and made themselves (almost) always available for work. This means they could always deliver on time;
  • Because the translators became so familiar with the terminology and were always kept up-to-date with the issues in the waste management industry, the amount of time-consuming research required for each new job was relatively small, and they were able to turn the work around quickly;
  • The project managers knew exactly which translators and revisers were appropriate for these sorts of jobs; glossaries, terminology databases and translation memories were all up-to-date and the translators got to know the style guides backwards.

So the clients in this sector were happy and continued to pay well because there were few issues with the translations and the work is always delivered within deadline.

But while the production processes were highly efficient and the margin on each job was fantastic, the number of jobs they got per month in this sector was tiny!

Just imagine how XYZ Translate’s bottom line would look if they even got one more client in this sector? Or two, three or four?

Pretty much by chance or good fortune, XYZ Translate Ltd had developed a highly efficient process in a very narrow field. The company most certainly didn’t set out to be experts in waste management. They developed a great area of expertise, but they just didn’t have enough customers in the industry sector to make it really pay.

How could XYZ Translate leverage off this expertise?

We might think about XYZ Translate Ltd’s small number of very profitable customers in the waste management sector as reflecting the density of such customers in the area of their marketing reach. (Not all firms in the sector would be willing to pay the sort of premium that XYZ Translate charges for the work.) To find more customers who want just the sort of service that XYZ Translate Ltd can deliver, they need to expand the reach of their marketing…

… they just need a bigger market!

The laws of probability are such that there are most certainly more customers “out there somewhere” who will be willing to pay a premium for just the sort of excellent service XYZ Translate Ltd has to offer. But expanding the size of the catchment area to find those elusive “ideal customers” is a serious marketing problem – and that costs. Tracking them down and making the sale can be an expensive exercise – especially if those new potential customers are “somewhere out there” in a different city or a different country, or in a different time zone…

This is the sort of problem that a marketplace like OpenBorder has been designed to address [5]. By making the global market more accessible, small to medium-sized enterprises and freelancers have a larger pool from which they can “pick ‘n choose” customers who are prepared to pay a premium for their more specialised or more highly focussed expertise.

LSPs like XYZ Translate Ltd usually don’t have the financial or marketing resources to assess a global market in order to target a relatively small set of more profitable customers. OpenBorder was designed to help LSPs “differentiate” [6] in order to compete and win new customers on the basis of their strengths.

Every LSP and freelancer has some unique strength, skill set or a combination of different factors that will attract customers who are looking precisely for what they have to offer – if the market is big enough. As localisation sales and marketing veteran, Jessica Rathke puts it:

“Each company has its own unique aspects, be it a vertical specialization such as life sciences or legal translation.  Each company has its own history (or not), unique set of employees and unique client base.  The uniqueness in any of these areas can be exploited and communicated that will give the target audience a feel for your organization, company ethos or methodology that distinguishes your company from another.” [7]

A clear and obvious survival strategy for translation providers like XYZ Translate is to differentiate from their competitors by leveraging off what they can already do well and most profitably. OpenBorder hopes to offer the sort of tools translation providers can use to compete in a global market on the basis of their unique merits – and have the buyers come looking for them!

Critical comments and discussion welcome!

Cheers

Paul

Notes:

[1] Kirti Vashee (2011), Translation Crowdsourcing,  http://kv-emptypages.blogspot.com/2011/08/translation-crowdsourcing.html

[2]  Stalin “foresaw the merger of zonal languages, into a ‘common international language which naturally will not be either German or Russian or English, but a new language embodying in itself the best elements of national and zonal languages'”, http://www.guardian.co.uk/theguardian/2011/aug/02/archive-stalin-and-soviet-state

[3]  The Guardian: Biologist Mark Pagel argues that humanity’s destiny is to become one world with one language. http://www.guardian.co.uk/science/punctuated-equilibrium/2011/aug/04/1

[4] Donald A. DePalma and Nataly Kelly (2009), The Business Case for Machine Translation, Common Sense Advisory, Inc., Lowell, Massachusetts, USA.

[5] OpenBorder is a B2B marketplace for the global translation industry. Buyers and providers of professional translation services transact business anywhere in the world through a multi-lingual web interface. Participants interact in real time in their own language and currency. Translation providers compete on more than just price and capitalize on strengths such as earlier delivery, specified quality standards and verified subject expertise. Buyers will be able to find professional translation services anywhere in the world that can meet their exact requirements: www.openborder.com

[6] “In economics and marketing, product differentiation (also known simply as “differentiation”) is the process of distinguishing a product or offering from others, to make it more attractive to a particular target market” – Wikipedia:  http://en.wikipedia.org/wiki/Product_differentiation

[7] Jessica Rathke, (2011), Is Differentiation in the Localization Industry Possible?http://l10nsalesandmarketing.blogspot.com/2011/02/is-differentiation-in-localization.html

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