This document discusses trends in the translation industry and opportunities for innovation in vendor management. It notes that most companies will not remain excellent for decades due to constant change. It then outlines trends like increasing machine translation and reliance on global partners over freelancers. The document proposes that partnerships between master vendor libraries (MVLs) and strategic language vendors (SLVs) can help address pricing pressures by reducing redundant layers of management. It argues SLVs should handle tasks like project management and quality assurance to lower costs. Such partnerships could free MVLs to focus on client value and SLVs on their core competencies, if based on trust, a clear division of labor, and a shared focus on delivering value.

1. Vendor Management
The Power of Partnership
Bob Donaldson
Carson Strategy Group
ALC Annual Meeting, Boston, May 2013

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Most organizations will shrink or disappear in
the long term; only a third of excellent
companies remain excellent for decades, as
economic, political, social, and technological
change continue to accelerate, and
competitive pressure grows more intense.
Scott Keller & Colin Price
December, 2011

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Industry Trends
• Transition from “Project Orientation” to
“Content Stream” orientation
• Increasing integration of MT at all levels
• Increasing emphasis on velocity rather than
price or quality
• Increasing reliance on global SLV partners
rather than freelancers?
• Where is the Business Model Innovation?

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Tyranny of the Urgent
Promise of Technology
+ Explosion of Volume
= Customer Expectations

5. Pricing Pressures
Volume
Value
HT
$$
Budgets
Needs

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Where is the Opportunity?

7. Trans
-lator
Edit &
QA
PM/VM
TechnologyFixes Everything
Integrated
TMS, TEnT& VMS
Trans-
lator
Edit
& QA
Collaboration
Platform
Vendor
Portal
Customer
Portal
PM/VM

8. THE END
Any Questions?

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Technology Dialectic (Proposed)
• Process emerges from chaos
– Limited by existing technology
• Technology emerges from need
– Informed by process “pain points”
• Resistance to change emerges from fear
– Entrenched role in old processes
• New process emerges as fear is overcome
– True innovation is a form of change management

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Let’s Look Again …

11. Avenues of Innovation
Volume
Value
MT/PE
$ Community Raw MT
V
T
Technology Promises:
• Workflow Automation
• Machine Translation
• Open Markets
• Virtual Teams
• Community Translation

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Technology Dialectic(Alternate)
• Process emerges from chaos
– Limited by existing technology
• Technology emerges from need
– Informed by process “pain points”
• Resistance to change emerges from fear
– Entrenched role in old processes
• Technology is forced to conform to old process
– True benefits of innovation are never realized

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Example: Overhead (50% + 10%)
• Redundant layers of “project management”
– Client, MLV, SLV
• Redundant layers of quality assurance
– Client, MLV, SLV, Translator
• Most “innovation” ignores this redundancy
• Technology provides two competing options:
– Centralize platform and use freelancers only
– Reinvent processes and leverage SLVs

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Freelancers: Business as Usual
• Average of almost 300 needed
– How many per language?
– How to evaluate?
– How to manage capacity?
– How to manage quality?
– How to manage tools & training?
– How to manage task assignment (at volume)
• Lower cost often cited as rationale, but …
– Common current practices do not scale

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Partnership: Breaking the Model
• SLV aggregates demand
– Eliminates MLV capacity management problem
• SLV manages freelancers
– Recruitment, Evaluation, Training, etc.
– Reduces MLV vendor management effort
• MLV manages client
– Understanding the value
– Understanding the expectations
• But what about quality? … and COST?

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Aligning Cost & Value
• Automation (Reduces cost)
– File management & preparation
– Leveraging of linguistic resources
• Delegation (Shifts cost to SLV)
– Project management
– Translator assignment
– Quality assurance*
• Verification (Builds trust)
– Service level agreements
– Quality control *

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Power of Partnership
• Frees MLV to focus on delivering client value
– Innovative service offerings
– Value pricing
– Assumption of risk
– Upstream services
• Frees SLV to focus on core competency
– Quality, Capacity, Evaluation, Tools, Training, etc.

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Keys to Success
• Focus on value
– What value does MLV deliver to end client?
– What value does SLV deliver to MLV?
– How can the value be described and verified?
• Relationships built on trust
– How does the MLV earn the client’s trust?
– How does the SLV earn the MLV’s trust?
– What does “Trust but Verify” mean in this context?
• Division of labor
– How can duplication of effort be eliminated?

19. Questions or Comments?

20. Contact Details
20
BOB DONALDSON
+1.512.680.2595
Bob@CarsonStrategy.com