The Coming Disintermediation and Disruption in the Translation Industry

I spent a few days in a very hot and dry Las Vegas last week at the IMTT Vendor Management Seminar, which I would wholeheartedly recommend to anybody who wants to understand how to better manage the relationship with translators to mutual benefit and also get a sense for changing production models in the industry. IMTT does a better job than anybody else I know of including translator perspectives into broader LSP and enterprise level localization discussions. They do this in a smaller and more engaged and interactive format than larger events.

There were many great presentations on the nuts and bolts of vendor management, but two high level industry presentations stood out for me. One by Arturo Quintero who shared many stories of how Moravia's supply chain works and evolved over time (" Supply Chain to Partner Management: Moravia’s Strategy"), often by learning from their customers and also provided much insight into how large enterprise buyers think about translation process and efficiency. The twitter stream with #imtt_vms from @ebodeaux @ebodeux does a great job of summarizing Arturo’s (and several other) presentations. Secondly, a relatively informal discussion session between Renato Beninatto and Bob Donaldson on “Disintermediation: How Power is Going Back to the Translators”. I review these two presentations together with my own thoughts on this subject in this entry.


So what is “Disintermediation”? According to Wikipedia:

In economics, disintermediation is the removal of intermediaries in a supply chain: "cutting out the middleman". Instead of going through traditional distribution channels, which had some type of intermediate (such as a distributor, wholesaler, broker, or agent), companies may now deal with every customer directly, for example via the Internet. One important factor is a drop in the cost of servicing customers directly.

The supply chain in the professional translation world looks something like this: Global Enterprise content creator > Internal localization department (Buyer) > Multilanguage Vendor (MLV) > Single Language Vendor (SLV) > Freelance Translator. Given the huge increases in global-customer-relevant content and the growing collaboration infrastructure many are rethinking the traditional supply chain. This approach made sense sense in the Web 1.0 and L10N 1.0 world but it is increasingly being challenged.

At the VMS Renato (RB) stated that he saw the possibility of SLVs being squeezed as MLVs go directly to translators, however Bob (BD) felt it was more likely that the MLVs would be marginalized as Buyers start going directly to SLVs. There was an interesting discussion on where the most valuable project management was being done with BD saying it was at the SLV and how the value of “project management” in localization was constantly falling as more efficient process and collaboration technology infrastructure reduced the need for PMs. There also seemed to be a sense that that the role of the Vendor Manager will increase in value relative to Project Management and that more VMs would be required and fewer PMs. They both commented on how the technology had reduced the need for “in-country” translators as it was now possible to easily find the best people in a decentralized model independent of physical location. However they both pointed out that collaboration models will still continue to require quality management and intelligent work assignment. RB pointed out that companies like SDL have very focused performance measurement systems at an individual level but BD countered that often what is measurable is not necessarily most valuable, so it is important to be aware of the bias that a ranking system can create. RB pointed that while there is change, multiple models of production will co-exist for a while.  Their discussion raises some interesting questions for us all:

• Where is the greatest project management value added in the supply chain?
• Does collaboration and process automation infrastructure reduce or even eliminate the need for project management? 
• What are critical vendor management skills needed to build a high value supply chain?
• What is the right criteria to use to measure vendor, employee quality and contribution?
• Will domain expertise and competence with technology and collaboration platform become a differentiating factor for LSPs in future?

One point that RB made was that real innovation usually comes from outside the industry e.g. Microsoft snatched the PC market away from IBM (yes, asleep again), and Google did the same to Microsoft with the Search and Web Portal markets. Innovation can also be quite disruptive, often causing changes in the market eco-system and leadership. Late Update: Here is some of that conversation:

An example that I used some time ago that I think is quite applicable to translation, is the world that was in existence when word-processing technology first emerged. In the early 1980’s IBM sold lots of IBM Selectric typewriters and business documents were produced by pools of typists (freelancers?) who got content handed to them in voice or handwritten form by administrators (PMs?). This was a business that IBM dominated with 75%+ share. A company called Wang introduced a new and better way to do this with CRTs and "memory driven" typewriters. They and other similar innovators very quickly grabbed the market away from IBM and this market eventually evolved to PC based word-processors. Later we saw Wang miss the innovation opportunity as the technology evolved to PCs and become irrelevant. IBM was irrelevant in all these new market developments because IMO they never really focused on their customers real needs, or their thinking was confined by the existing revenue base. While typists did lose their jobs, the new technology created better jobs (new eco-systems) for the most skilled typists who became office managers /administrators, marketing coordinators, executive administrators and even DTP experts. I think MT and collaboration technology are similar drivers of structural change in professional translation today. The global enterprise is facing a data deluge and wants partners that will help them cope to make this rapidly multilingual. TEP production processes have a place and do work for static content, but are not useful for the dynamic and fast flowing content streams that global enterprises MUST deal with today.  Continuously flowing content streams demand translation production lines.


So how disruptive could disintermediation really get?
I paint some possibilities (complete speculation and nothing more) below:

• Enterprise Content Creators could go directly to translators (both professional and amateur) via highly efficient collaboration and translation production infrastructure (which includes data driven MT technology) with a small role for internal localization teams to manage quality. Translation becomes as much a utility as word processing and Powerpoint production is today.Standards Rule!
• New translation utilities emerge with highly automated translation and collaboration technology platforms (continuously learning MT, next generation TM, MT, huge portfolio of linguistic assets and super efficient editing tools, simple and powerful collaboration) and the ability to match buyers and sellers of translation services (freelancers and amateur SME who do post-editing) through efficient and effective collaboration platforms.
• Enterprise Localization teams go directly to multiple SLVs through standardized and open collaboration infrastructure.
• Enterprise Localization teams go directly to freelancers with some MLV quality management through standardized collaboration infrastructure (standardized infrastructure by definition excludes SDL).
• Enterprise Buyers decide that vertical stacks like SDL/LIOX are the best solution and direct all translation activity through them.
• Nothing changes because everything is great and it is not possible to improve the existing supply chain. We see the same people at all the same shows and we are all happy.

A tip of the hat to Ultan for reminding me again of the need for an alternate view on the building forces of disruption. Take a look, it is worth reading his blog and watching the video. Ethan Zuckerman wrote what I think is the seminal essay on the future of translation and “peer production” models. Yeeyan is another example of disruption: 150,000 volunteers who translate tens of millions of words on a regular and timely production schedule because they view what they do as high social value. The supply chain here is Content provider > Passionate organizer > 150,000 volunteer translators > Content consumer. 


So we see that change is already here, and more is coming, and it is wise to keep your eyes open and stay alert. Prepare, adapt, learn if possible, since as George Santayana said

“Those who do not learn from history are doomed to repeat it”

and I bet that at least a few of today’s market leaders will move into irrelevance or obscurity as other change laggards have before them. But yet, these are exciting times and evolution is a universal imperative.