Translation Supply Chain Management

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1 Translation Supply Chain Management How Enterprise Buyers Manage Their Translation Vendors By Fred Hollowood and Donald A. DePalma September 2014

2 Translation Supply Chain Management By Fred Hollowood and Donald A. DePalma September 2014 Copyright 2014 by Common Sense Advisory, Inc., Cambridge, Massachusetts, United States of America. Published by: Common Sense Advisory, Inc. 100 Cambridgepark Drive Cambridge, 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., 100 Cambridgepark Drive, Cambridge, MA 02140, , 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 Supply Chain Management i Table of Contents Topic... 1 Executive Summary... 2 Buyer Profile... 3 The Demographics of Our Survey Respondents... 3 Most Respondents Have Some Form of Centralized Vendor Management... 5 Customer-Facing Translation Dominates the Spending Mix... 6 People Versus Portal: Vendor Managers Prefer Working with Humans... 7 Relationship Profile Companies Tend to Choose a Handful of MLVs from the Same Region Where Buyers Find Translation Suppliers The Duration of Vendor Relationships Varies Buyers Add Vendors and Issue RFPs as the Need Arises Distribution of Work to Top Vendors Varies Widely Several Factors Determine How Buyers Assign Projects to Vendors Buyer Requirements What Global Businesses Require, Expect, and Want from LSPs Business Issues Interest More than Just Translation Managers Customer Service and Responsiveness Determine Relationship Quality Documented Policies and Procedures Define the Relationship Online Access and Reporting Allow for Hands-Off Management How Translation Buyers Measure Vendor Performance Companies Formally Measure a Trio of Factors Translation Buyers Are Generally Satisfied with Their Top Five Vendors Poor Translation Quality Tops the List of Termination Issues Analysis of Findings Vendor Management Lessons from Practitioners Strategic Globalization Fosters Formal Vendor Management Mature Organizations Actively Manage Translation Vendors Create the Corporate Foundation for Managing the Supply Chain Bring Procurement into Your Vendor Management Practice Lay the Groundwork for a Long-Term Relationship with Suppliers Building a Solid Partnership with Translation Suppliers Partnership Takes Two Vendors Need to Be Proactive Ask Your Translation Vendors to Collaborate Automation Underpins Your Relationship with Vendors Promote Optimal Performance by Measuring It Manage the Operational Measures That Always Matter Share Assessment Results with Your Suppliers Leverage Vendor Management to Support a Globalization Strategy Recommendations Organizational Progress Process Improvements Technology Upgrades Useful Metrics Related Research Copyright 2014 by Common Sense Advisory, Inc. September 2014

4 ii Translation Supply Chain Management About Common Sense Advisory Future Research Applied Research and Advisory Services Figures Figure 1: Survey Respondent and Company Demographics... 4 Figure 2: Organizational Approach for Vendor Management... 5 Figure 3: Translation Spending Patterns of Buyers by Content Type... 6 Figure 4: Buyer-Preferred Work Style... 7 Figure 5: Buyer-Preferred Communication Channels... 9 Figure 6: Buyer Technology Usage... 9 Figure 7: Numbers of Translation Vendors Retained by Buyers Figure 8: Percentage of Translation Volume Delivered by Vendor Type Figure 9: Top Five Translation Vendors by Type Figure 10: Where Buyers Top Five Suppliers Are Located Figure 11: Where Translation Buyers Find Their Suppliers Figure 12: Relationship Tenure with Top Five Translation Vendors Figure 13: Length of Relationship Varies by Size of Buyers Figure 14: Most Respondents Do Not Add New Vendors Very Often Figure 15: Buyers Try to Avoid Conducting RFPs Figure 16: Percentage of Translation Outsourced to Top Five Vendors Figure 17: Buyer Criteria for Selecting One Vendor Versus Another Figure 18: Buyers Sometimes Require Suppliers to Collaborate on Projects Figure 19: Business Issues What Vendor Managers Value Figure 20: Customer Service What Vendor Managers Value Figure 21: Policies and Procedures What Vendor Managers Value Figure 22: Automation and Reporting What Vendor Managers Value Figure 23: How Buyers Evaluate Vendor Performance Figure 24: Buyer Satisfaction with Their Top Five Vendors Figure 25: Buyer Criteria for Supplier Termination Figure 26: Vendor Management Evolves as Organizations Mature Figure 27: The Life Cycle of a Relationship with a Translation Provider Figure 28: Foundation for Innovative Vendor Management Figure 29: Balanced Scorecard for Translation Partner Review Figure 30: Sample Scorecard for Translation Partner Review Tables Table 1: Headquarters Locations for Top Five Vendors vs. Buyers Table 2: What Vendor Managers Require and Expect from Suppliers Table 3: Vendor Management Practices of Our Survey Sample Table 4: Evaluating Vendors throughout the Relationship Life Cycle Table 5: Profile of a Trusted Localization Partner Table 6: Enabling Technologies for Translation Supply Chain Management Table 7: Assessment Questions for a Balanced Scorecard September 2014 Copyright 2014 by Common Sense Advisory, Inc.

5 Translation Supply Chain Management 1 Topic Outsourced translation is the norm for most organizations, but many struggle with how to manage their external suppliers especially as they increase the volumes they translate, the number of languages they offer, and the frequency at which they update. They seek information about how to benchmark their efforts against counterparts and competitors. They want to know what other buyers expect of suppliers. How do they measure them? When and why do they fire translation vendors? In this report, Common Sense Advisory explores these issues and many others. We present the findings of an in-depth survey conducted in May and June 2014 with 73 vendor managers and executives at enterprises that buy translation for their own use. We analyze their responses and make recommendations about what companies can do to convert suppliers to trusted partners. This research will help buyers with evolving translation supply chain or vendor management organizations to benchmark their operations against industry norms, scale practices to meet internal requirements, and measure their success. Executive Summary. We summarize the trends we found in our survey. Buyer Profile. We describe survey respondents, their organizational structure, and the content types they pay to have translated. Relationship Profile. We present the major characteristics of translation vendors, the distribution of work, the length of the typical relationship, and how buyers find and hire vendors. Buyer Requirements. We outline expectations that buyers have of their suppliers and explain the reasons for firing a translation vendor. Analysis of Findings. We examine the survey findings and offer best practices for translation supply chain management. Recommendations. We highlight next steps for vendor management. Related Research. We list other research related to translation supply chain management from Common Sense Advisory. Copyright 2014 by Common Sense Advisory, Inc. September 2014

6 Translation Supply Chain Management 51 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 2014 by Common Sense Advisory, Inc. September 2014

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