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February 8, 2005 

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 Q&A: Brian Briggs of Acclaro on Whether to Outsource Localization 2/8/2005
The mission of Going Global is to educate and inform Midwest technology companies on what local technology companies are doing internationally so other firms can learn from the successes of like-minded peers.


CHICAGO Ė Brian Briggs has been in the localization industry since 1995 when he founded Language Partners International (LPI). He is now the head of business development in Deerfield, Ill. for Acclaro, which is a mid-sized provider of localization services based on a new open localization model.

In part three of a three-part series, Briggs sat down with ePrairie international expert Michael Muth to discuss in detail the pros and cons of outsourcing your localization efforts.


Michael Muth: Is offshore outsourcing an issue in localization?
Brian Briggs: I think itís an issue in everything today. Localization companies have been offshoring the translation part of the process since the advent of the Internet.

The new question is whether or not you offshore the project management. In other words, can you achieve the benefits of lower-cost project management without negatively impacting the quality or timeliness of the project when your project manager is between six and 12 time zones away?

MM: What are the cost components?
BB: If you could cut project management in half (which is probably overly aggressive), thatís significant. Thatís what everybody wants.

MM: Can you get better quality by offshoring?
BB: Not today. Localization is a complex project management task. The quality of the localization vendorís project management plays the strongest role in the timeliness and quality of the localized product.

Youíll always get better quality by locating your project management in close proximity to the person or team within the client company responsible for localization. Thatís why we usually place our project managers on site with the client so we get the best line of communication possible.

Offshore project management has been attempted in the past and failed because the project mangers were too many time zones away from their client counterparts. Today, most companies are investigating offshoring for the purposes of lowering operational costs. If they get to a point where they move their localization coordinators offshore, I think youíll see most localization vendors follow suit.


MM commentary: While you might get more accurate translations, I doubt you can get better localization unless your provider (either an in-house provider or one thatís outsourced) knows your business well. Like most business issues, it all depends on how well you manage and communicate it.


MM: How well can outsourcers really know the businesses of their clients?
BB: Back when I was with IBM, it was a common customer complaint that their account team never really understood their business. For the most part, this was because IBM was a big company and it was common for our staff to change roles and customers quite often.

Large localization vendors are faced with the same challenge. This will be one of the changes we will see in the next phase of the localization business model.

MM: Where does localization fit with content management?
BB: Content maintained in a content management system (CMS) may need to be localized by a company going global. Historically, localization was approached as a project with a beginning and an end. This still works for documentation and software today.

However, Web sites and CMS content tend to be much more dynamic and granular (such as frequent online changes versus a new software version). To address this, several companies have come out with globalization management systems (GMS). These interface with a CMS for the purposes of detecting change and managing the localization process as a workflow stream rather than a project.


MM commentary: While it has been theorized that CMS companies would acquire localization companies, that hasnít happened yet.


MM: What do you see in the future for localization?
BB: I think we are going to see the emergence of a ďnewĒ mid-sized localization model. The large players may have overreached their economies of scale and are now beginning to feel some quality problems as a result. The distance between the client and the vendor decision makers has grown too great.

This has caused delays and having to wait on decisions that affect quality and making deadlines. Their metrics are focused on the profitability of each project versus a longer, multi-project timeline. These new mid-sized vendors will be able to take this longer view by staffing their projects with more senior and empowered staff. These people will live with the client for a longer period of time.


MM commentary: It will be interesting to see how closely CMS and localization become integrated.


MM: Would you consider localization technologies mature or still emerging?
BB: Some technologies (like machine translation and translation memory) are now pretty mature. I think most of the focus for the future is on technology that helps automate the management of the process.

MM: Is localization still a growth industry or has it reached a plateau?
BB: The localization industry has definitely matured over the last 10 to 15 years, but as businesses continue to globalize, demand will continue to grow. Historically, English to European languages have been a big part of the market. How that changes over time will be an interesting thing to watch.


MM commentary: My personal impression is that localization is still a growth business. The only question is in which direction (i.e. toward Asia and Latin America or perhaps eventually Africa rather than Europe). Though it has been a number of months, I saw that only about a third of the Fortune 1000 had localized their Web sites into multiple languages.


MM: How has the localization industry changed since you founded LPI in 1995?
BB: The biggest change has been a major consolidation in the industry. During the 1990s, there were probably 200 mid-sized professional firms working globally in the localization industry.

During the 1990s, several companies acquired new venture fund M&A strategies. From there, the largest three became public companies and the dominant players. I think we are now on the verge of another shift in the industry as clients begin to look for new and more responsive service models.

MM: How has consolidation in the late 1990s changed product offerings and prices?
BB: As the larger companies continued to feed their need for revenue growth, more pressure was put on pricing. In response, these companies had to look for ways to take cost out of their operations. They did this through greater use of technology and in-country translators. Some are now even testing offshore project management and production.


MM commentary: Offshore project management is already in use for some companies.


MM: Could you evaluate the strengths and weaknesses of the Big Three in localization?
BB: Lionbridge, SDL and Bowne all have great global presence in terms of their number of office locations. Clients in those locations appreciate having local contacts. They have some excellent people at these firms and they are able to handle ďmega projectsĒ without bringing in delivery partners.

They also have excellent access to capital. Some have chosen to build computer infrastructure with that capital and others have used it for acquiring companies in related fields.

A large size also brings some challenges for these companies to deal with such as staff churn, degrees of separation between their project teams and executive decision makers, ability to maintain client relationships, coordination between sales and operations and the potential vulnerability caused by the need to cover their elevated fixed costs.


MM commentary: From a Midwestern perspective, itís interesting to note that the Big Three have a total of one sales representative in the whole Midwest. By the way, she could be a prospect for a future interview to get a different perspective on localization.


MM: How does IBM do localization differently than local small to medium-sized enterprises? BB: IBMís localization requirements are obviously quite large and they handle a great deal of them internally. They also have a team focused on developing their own proprietary localization tools. Despite all that, they still have one of the largest outsourcing budgets in the business.

MM: How does McKinsey see localization strategically?
BB: I think McKinsey would see localization as part of a technical implementation plan for a companyís global business strategy. Itís pretty far down the timeline from where they are typically operating.


MM commentary: In other words, McKinsey sees localization as a tactical function rather than a strategic function.


MM: Do you speak any foreign languages?
BB: Localization is the convergence of technology and language. In that perspective, I come to this from the technology camp. Iíve worked internationally on IT consulting engagements and speak ambulatory Spanish.


MM commentary: Itís interesting to note that one mustnít speak a foreign language to work in this industry.


MM: How would you recommend for people to learn more about localization?
BB: There is the Localization Industry Standards Association, which has some good articles and primers available. The Localization Institute in Madison, Wis. is also a great source of vendor-neutral information and training. There is also a trade publication called Multilingual Computing that is a good source of timely information on localization issues.

MM: What are five recommendations you would make to someone contemplating localization for the first time?
BB: Here are my five:

  1. Become a smart buyer. Having read this interview, you perhaps have a good start. You should check out some of the resources mentioned in this column and then start talking to vendors.

  2. Determine your first primary market (country). This is a marketing and business development decision in which all key players should be involved.

  3. Assess your global readiness. Are your products ready to be localized? Determining this up front and resolving any problems before you begin the localization process will save you some stress and money downstream.


    MM commentary: We talked with John Lee of Hostway about the need to first internationalize your content before you can effectively localize it.


  4. Be leery of handing off the localization of your product(s) to distributors. This always looks great at first since it appears to reduce or take away all your upfront costs. However, great salesmen and channel partners do not necessarily make good localizers. Weíve often had clients come to us after experiencing quality and consistency issues with this approach.

  5. Compare your quotes and go with your gut. Make sure youíre comparing apples to apples when selecting a vendor. Even then, realize that it still comes down to a bit of a crapshoot. Like remodeling your house, know that youíre going to run into some surprises. Who do you think will help you best in that moment of need? You should feel confident that your project contacts can think on their feet and are empowered to act and keep your project on track.


Michael Muth is managing director of GATA, an international business development consultancy that helps technology companies build international partnerships. He can be reached at mike@intlalliances.com.
Click here for Muthís full biography.

Previous Columns:
Q&A: Brian Briggs of Acclaro on the Complexities of Localization (2/1/2005)
Q&A: Brian Briggs of Acclaro on International Localization Services (1/25/2005)
Q&A: RPXís Robert Okabe, IECís John Janowiak on Global Events (1/11/2005)
Q&As: FastRootís Terry Howerton, Doug Cogswell of ADVIZOR Solutions (1/4/2005)
Q&A: Opportunity Internationalís John Kamperschroer on Partnerships (12/21/2004)
Q&A: Opportunity Internationalís John Kamperschroer on Technology (12/14/2004)
Q&A: Opportunity Internationalís John Kamperschroer on Innovative Financing (12/7/2004)
Q&A: IEC Senior Director John Janowiak on Trade Show Realities (11/16/2004)
Q&A: International Engineering Consortium Senior Director John Janowiak (11/9/2004)
Q&A: Founder John Lee of Chicagoís Hostway on Web Site Localization (11/2/2004)
Q&A: Founder John Lee of Chicagoís Hostway on Growing Globally (10/26/2004)
International M.B.A. Guide to Moore School of Business, Thunderbird (10/12/2004)
Your International M.B.A. Guide to Northwestern, Loyola University (10/5/2004)
Entrepreneurís Guide to International M.B.A. Programs in Chicago (9/28/2004)
Q&A: Prairie Angels Founder Bob Okabe on Diction, International Cities (9/7/2004)
Q&A: Prairie Angels Founder Bob Okabe on International Adaptation (9/1/2004)
Q&A: Prairie Angels Founder Bob Okabe on Managing U.S. Subsidiaries (8/24/2004)
Q&A: Origin Ventures Founder Steven Miller on Investments, Angels (8/17/2004)
Q&A: Origin Ventures Founder Steven Miller on the Canadian Way (8/9/2004)
Q&A: CPCP Founder David Baeckelandt on Multilingual Importance, Mentoring (8/3/2004)
Q&A: CPCP Founder David Baeckelandt on Japanese Disclosure, Due Diligence (7/27/2004)
Q&A: Chicago Pacific Capital Founder David Baeckelandt on Overseas Funding (7/20/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on the Art of Partnering (7/13/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on BP, AstraZeneca Wins (7/6/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on Global Software (6/29/2004)
Q&A: CEO Terry Howerton on Why Chicago, Ukraine Made FastRoot (6/22/2004)
Q&A: FastRoot CEO Terry Howerton on Blended Chicago Approach (6/15/2004)


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