Translation Vendor Management

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1 Translation Vendor Management What Clients Really Think about Language Service Providers By Nataly Kelly and Robert G. Stewart

2 Translation Vendor Management By Nataly Kelly and Robert G. Stewart ISBN Copyright 2011 by Common Sense Advisory, Inc., Lowell, Massachusetts, United States of America. Published by: Common Sense Advisory, Inc. 100 Merrimack Street Suite 301 Lowell, MA USA No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher. Permission requests should be addressed to the Permissions Department, Common Sense Advisory, Inc., Suite 301, 100 Merrimack Street, Lowell, MA , , See for usage guidelines. Trademarks: Common Sense Advisory, Global Watchtower, Global DataSet, DataPoint, Globa Vista, Quick Take, and Technical Take are trademarks of Common Sense Advisory, Inc. All other trademarks are the property of their respective owners. Information is based on the best available resources at the time of analysis. Opinions reflect the best judgment of Common Sense Advisory s analysts at the time, and are subject to change.

3 Translation Vendor Management i Table of Contents Why We Wrote This Report...1 Past Research on Vendor Management...1 Data... 3 How We Carried Out the Research for This Report...3 Survey Respondent Demographics...3 Characteristics of Translation Vendors and Work Distribution...7 Preferred Localization Suppliers Exhibit Distinct Qualities...12 Length of Vendor Relationship Varies by Region and Budget...15 What Global Businesses Require, Expect, and Want from LSPs...19 Customer Service Capabilities Draw Attention from Buyers...27 Buyers Seek More from Their Vendors Where Technology Is Concerned...30 How Buyers Evaluate Localization Vendor Performance...36 Top-Performing Vendors Prioritize Quality, Technology, and Flexibility...37 What Makes Buyers Shut the Door on Translation Suppliers...39 Criteria Buyers Use to Route Projects to Different Providers...40 Vendor Management Models and Internal Considerations...42 Analysis The Dawn of a New Era for Localization Vendor Management...45 Disconnected Vendor Management Gives Way to Centralization...45 Language and Domain Matches Are No Longer Top Priorities...46 Technology Rises to the Forefront...46 Quality Measurement Is No Longer an Afterthought...46 Price Is Critical, but Still Not the Highest Priority Overall for Buyers...47 Localization Buyers Display a More Sophisticated Vendor Palate...47 Buyers Seek Greater Collaboration from Suppliers...48 Language Service Providers Still Often Fail at Customer Service...48 What Global Businesses Really Need from Localization Partners...49 Vendor Managers Are Split on the Impact of the Economic Downturn...50 How Buy-Side Organizations Felt the Pinch of the Financial Crisis...50 Staff Turnover on the Vendor Side Creates Problems for Buyers Too...50 Salient Findings from Our Vendor Management Study...51 Implications Benchmark Your Existing Client Accounts...53 Help Your Customers Help You...53 About Common Sense Advisory...56 Future Research...56 Applied Research and Advisory Services...56 Figures Figure 1: Survey Respondent and Company Headquarters Locations...4 Figure 2: Major Categories of Vendor Manager Titles...4 Figure 3: Annual Revenue of Survey Respondent Organizations...6 Copyright 2011 by Common Sense Advisory, Inc.

4 ii Translation Vendor Management Figure 4: Translation and Localization Budgets of Respondent Organizations...7 Figure 5: Percentage of Translation Volume Delivered by Vendor Type...8 Figure 6: Number of Translation Company Vendors Employed by Buyers...10 Figure 7: Number of Freelance Translation Vendors Employed by Buyers...10 Figure 8: Top Five Translation Vendors and Vendor Types...13 Figure 9: Locations of Top Five Translation Vendors...14 Figure 10: Percentage of Outsourced Translation Work Sent to Top Five Vendors...15 Figure 11: Relationship Duration with Top Five Translation Vendors...16 Figure 12: Buyer Frequency of Adding New Translation Vendors...18 Figure 13: Frequency of RFP Processes for Translation Services...18 Figure 14: Buyer Requirements of Translation and Localization Vendors...20 Figure 15: Buyer Expectations of Translation Vendors...22 Figure 16: Translation Vendor Capabilities and Importance to Buyers...24 Figure 17: Customer Service Capabilities and Importance to Buyers...28 Figure 18: Customer Service Attributes and Buyer Satisfaction Levels...30 Figure 19: General Capabilities and Importance to Buyers...31 Figure 20: Technology Capabilities and Buyer Satisfaction...34 Figure 21: Aspects of Translation Vendor Performance Measurement...37 Figure 22: Attributes of High-Performing Vendors...38 Figure 23: Reasons Buyers Terminate Relationships with Translation Vendors...40 Figure 24: Buyer Criteria for Routing Jobs to Translation Vendors...41 Figure 25: Prevalence of Dedicated Translation Vendor Managers...43 Figure 26: How Buyers Characterize Vendor Management at Their Companies...44 Figure 27: Buyer Satisfaction with Vendor Management Models...44 Tables Table 1: Title Categories of Translation Managers by Buyer Location...5 Table 2: Title Categories of Translation Managers by Buyer Budget Size...5 Table 3: Average Localization Budget as a Percentage of Total Revenue...7 Table 4: Current and Future Work Distribution by Buyer Location...9 Table 5: Current and Future Work Distribution by Buyer Budget Size...9 Table 6: Number of Translation Company Vendors by Buyer Location...11 Table 7: Number of Translation Company Vendors by Buyer Budget Size...11 Table 8: Location of Top Translation Vendors by Buyer Budget Size...13 Table 9: Locations of Top Translation Vendors by Buyer Location...14 Table 10: Top Vendor Relationship Duration by Buyer Location...16 Table 11: Duration of Top Vendor Relationship by Buyer Budget Size...17 Table 12: Frequency of Adding New Vendors by Buyer Location...17 Table 13: Frequency of Adding New Vendors by Buyer Budget Size...17 Table 14: Frequency of RFP Processes by Buyer Location...19 Table 15: Frequency of RFP Processes by Buyer Budget Size...19 Table 16: Requirements by Buyer Location...20 Table 17: Requirements by Buyer Budget Size...21 Table 18: Expectations for Vendors by Buyer Location...22 Copyright 2011 by Common Sense Advisory, Inc.

5 Translation Vendor Management iii Table 19: Expectations for Vendors by Buyer Budget Size...23 Table 20: Importance of Vendor Capabilities by Buyer Location...25 Table 21: Importance of Vendor Capabilities by Buyer Budget Size...26 Table 22: Importance of Customer Service Capabilities by Buyer Location...27 Table 23: Importance of Customer Service Capabilities by Buyer Budget Size...29 Table 24: Importance of General Capabilities by Buyer Location...32 Table 25: Importance of General Capabilities by Buyer Budget Size...33 Table 26: Satisfaction with General Performance Criteria by Buyer Location...35 Table 27: Satisfaction with General Performance Criteria by Buyer Budget Size...36 Table 28: Vendor Performance Measurement by Buyer Budget Size...37 Table 29: Motives for Terminating Vendor Relationships by Buyer Location...39 Table 30: Motives for Terminating Vendor Relationships by Buyer Budget Size...39 Table 31: Criteria Used to Route Jobs to Vendors by Buyer Location...42 Table 32: Criteria Used to Route Jobs to Vendors by Buyer Budget Size...42 Table 33: How Localization Partners Behave Differently from Vendors...49 Copyright 2011 by Common Sense Advisory, Inc.

6 Translation Vendor Management 56 About Common Sense Advisory Common Sense Advisory, Inc. is an independent research firm committed to objective research and analysis of the business practices, services, and technology for translation, localization, and interpreting. With its research for both Global Leaders and Industry Providers, Common Sense Advisory endeavors to improve the quality and practice of international business, and the efficiency of the online and offline operations that support it. To find out more about our research and how to become a member: us Visit Call Future Research Common Sense Advisory seeks interviewees from the community of people involved in building business applications for international use. If you would like to be interviewed or have clients who would like to share their experiences, please us at We anonymize participants and hold all information in the strictest confidence. Applied Research and Advisory Services This report and other Common Sense Advisory research into the best practices of business globalization serve as the foundation for our Applied Research and Advisory Services including International Customer Experience Assessments, Vendor Selection, Localization Business Process Audits, Globalization Excellence and Optimization Assessments, and Globalization Roadmaps. us at for more information. Copyright 2011 by Common Sense Advisory, Inc.

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