1. Technology Adoption and Competitive Advantage in the Translation Industry

2. Contents What is Project/Open? Competition in the Translation Industry
Project-ERP
What is Open-Source?
Competition in the Translation Industry
Sources
Arenas
Technology Adoption
Example: Translation Memories
New Technologies
Project/Open Modules

3. What is Project/Open?

4. What is Project/Open? “Project-ERP”
Projects
Users
Clients
Costs
File Storage
Work- flow
Sales
Trados Integra- tion
Project Forum
Freelance Database
Invoicing
Purchase Orders
“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

5. What is Open-Source? Everybody can use and copy open-source programs
“Science model”: Everybody contributes and shares
Mouth-to-mouth marketing
Development costs are much lower
Sales costs are much lower
Revenues from installation & support are sufficient

6. Competition
in the Translation Industry

7. Translation Value Chain
The “Classical” MLV Model
Quality Man.
Clients
Sales PM
Staffing QC
Editing
Trans.
MLV
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.

8. Translation Value Chain
Subcontracting to SLVs
Quality Man.
Clients
Sales PM
Staffing QC
Editing
Trans.
SLV
MLV
MLV
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

9. Translation Value Chain
Bypassing the MLV
Quality Man.
Clients
Sales PM
Staffing QC
Editing
Trans.
SLV
MLV
MLV
SLV
As a result, MLVs get frequently bypassed or “disintermediated”
Customers start to work with sophisticated SLVs directly and save up to 40%

10. Translation Value Chain
MLV Defensive strategies
Quality Man.
Clients
Sales PM
Staffing QC
Editing
Trans.
SLV
MLV
MLV
SLV
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…

11. Translation Value Chain
Fighting Arenas
Quality Man.
Clients
Sales PM
Staffing QC
Editing
Trans.
SLV
MLV
MLV
SLV
Arenas
This feels like the California gold rush. Just make sure to sell tools and denims…
We are selling Translation Workflow… :-)

12. Arenas and Strategies Arena Large MLV Small MLV SLV Freel.
Extend/ Defend
Learn
Customer Integration
Defend
Improve
Learn
Sales
Project Management
Defend
Improve
Improve
Learn
Defend
Improve
Specialize on the language
Staffing
Defend
Improve
Learn
Quality Management
“Production” Organization
Improve/ Defend
Learn
Improve/ Defend
Learn
Service

13. Competitive „Weapons“ Operational Efficiency
How to fight?
Competitive „Weapons“
Operational Efficiency
Strategic
Best management practices in each area/department
IT tools
Specialization
Languages
subject area
industry sector,
. . .
Size

14. Example: TM-Adoption

15. Competitive Advantage for Early Majority
TM-Adoption
Companies that replied to the LISA 2002 TM Survey
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
100%
Competitive Advantage for Early Majority
80%
60%
40%
20% 0%
1990
1995
2000
2005
Figures from LISA 2002 TM Survey
Interpolations

16. Source: Everett Rogers, “Diffusion of Innovations”, 1962
Types of Adopters
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”)
Early Majority
Late Majority
Early Adopters
Laggards
Innovators
1990
1995
2000
2005 0%
20%
40%
60%
80%
1990
1995
2000
2005
100%
Source: Everett Rogers, “Diffusion of Innovations”, 1962

17. Technology Portfolio 100% 80% 60% 40% 20% 0% 1980 1985 1990 1995 2000
Fax in Translation Companies
in Translation Companies
Translation Memories
100%
80%
60%
40%
20% 0%
1980
1985
1990
1995
2000
2005
2010
Qualitative curves for Fax and adoption

18. New Technologies

19. Translation IT Trends Problem Solution 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

20. Technology Portfolio 100% 80% 60% 40% 20% 0% 1980 1985 1990 1995 2000
Fax in Translation Companies
in Translation Companies
Translation Memories
100%
Project-ERP
Distributed TM?
80%
60%
40%
20% 0%
1980
1985
1990
1995
2000
2005
2010
Qualitative curves for Fax and

21. Jochen Hummel (Trados)
"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
„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."
Source: Client Side News 08.03

22. Translation Value Chain
Quality Man.
Clients
Sales PM
Staffing QC
Editing
Trans.
SLV
MLV
MLV
SLV

23. Optimization Potential
Projects
Users
Clients
Costs
File Storage
Work- flow
Sales
Trados Integra- tion
Project Forum
Freelance Database
Invoicing
FL- Purchase Orders 1 2 3 4 5 6 7 8 9 10
Integrated Workflows
Multilingual CMS
Custom Apps.
Customer Integration
Sales force automation
CRM
Data Warehouse
Sales
Project Management
Internet Project Collaboration
Intranets/ Extranets
Integrated freelance databases
Staffing
Quality database, integrated with freelance database
Quality Management
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.
“Production” Organization
Translation Workflow
Semiautomatic PM
Balanced Scorecard
Service Mgmt.
CRM
Scorecards
Service

24. 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!
Project/ Open
Frank Bergmann