Falling Translation Prices and Implications for Translation Professionals

I recently saw an active discussion in the Localization Professionals group in LinkedIn. The key point raised initially was that lower prices cause lower quality and thus begins a discussion on who is to blame. (There has to be someone / something to blame, right?) Since people’s livelihoods and bonuses are at stake, the discussion can quickly become emotional. The culprits according to the discussion are bad localization managers, freelancers who accept lower rates, lack of standards, lack of differentiation, lack of process, the internet, marketplaces becoming more efficient etc.. In some way all these reasons are valid, but is there something else going on?

I would like to present another perspective on this issue that points to larger forces that are driving structural changes and are also driving prices down and putting pressure on the old order. These forces exist independently of what we may feel about them, they simply are an observable fact of the translation landscape today.

 

The Increasing Volume of Content

Most global enterprises today, are facing huge increases in content volumes that increasingly demands to be translated. However, they are usually not given increased translation budgets to match this increase in content volume. So they have a few options to deal with this situation:

1) Refuse to translate the content that is out of budget range

2) Reduce prices to current translation suppliers (but increase volume)

3) Look for ways to increase translator productivity (MT, CAT Tools, Crowdsourcing) which can enable them to get more done with the same money i.e. raise individual translator productivity from 2,500 words/day to something much higher (10,000+?). 

Thus, one of the driving forces behind lower prices is the need to make  more and more content available for the global end-customer. The web and the growth in demand for dynamic content affects all kinds of global businesses. We can expect this content growth to only increase in future and the demands for productivity will get louder.  This does not mean that rates will automatically go lower but we are seeing that it does have an impact and that this content growth is also possibly driving interest in MT. How else do you cope with 10X to 100X the content volume?

 

The Value of Localization Content

Another dimension that should also be examined is the value of what we translate. Most of the professional translation industry is focused on SDL = Software & Documentation Localization and a relatively small and static part of corporate websites. However, it is increasingly being understood that while this “traditional localization content” is necessary, and will continue to be so, it is not where the greatest value lies for a global enterprise trying to build global customer loyalty. Very few people read manuals, in fact, some say that translators are often the only people who actually read manuals, especially in IT and consumer electronics industries. If users do not value this documentation we will continue to see price and efficiency pressures for this kind of translation. Customer and community generated content is increasingly more important, especially for complex IT and Industrial Engineering products. So we have major IT companies like Microsoft, Dell and Symantec who find that the localization content they are translating and producing only services 2% of their real customer inquiries. The customer need and expectation for having a large amount of searchable content continues to grow, and given the velocity of information creation, translation automation and MT become necessary. This is another source of downward pressure on prices, though we also see higher volumes and new attitudes and definitions of translation quality. Global enterprises realize that new quality standards are required for this massive content and new production models and approaches are sought as standard TEP costs and process are not viable to meet these needs.

 

The Global Demand for Translation & Knowledge

The third dimension is the raw demand for knowledge, information and collaboration from the world beyond the professional translation world. The thirst for knowledge across the globe is driving new collaboration models like crowdsourcing and development of open source software/tools, Open Data initiatives like the Meedan, EC, Opus, World Bank continue to build momentum. It is not clear that costly, membership-only initiatives like TAUS,  will prosper unless they do in fact provide higher quality data and add some real value. We should expect to see the growing use of amateurs as we see at Yeeyan and TED. We also see the growth of fan translations that prove that fans can create viable long-term initiatives, and again this shows that it is possible to reduce translation costs when motivated communities can be built. Adobe recently decided to use the crowd and a technology platform to manage the crowd to further their core business mission of developing international market revenue. And guess what one of the outcomes of this is? Lower translation costs.

So the poor translator and most LSPs are caught in these major shifts which are clearly out of the control of any single player in the localization world. We all (Buyer, LSPs and Translators) have to learn how to deal with these forces as they affect us all. In future, we should expect that ongoing productivity improvements will matter, and skill and experience with translation automation will be increasingly valued. 

I think skill with SMT (I am biased) will especially matter, as it is a technology that brings together TM, crowdsourcing, project management expertise, linguistic competence and collaboration infrastructure in way that can demonstrate and deliver higher productivity, lower costs per word and yet maintain quality. Traditional localization work will likely be under increasing price pressure because of it’s low relative value, and we will begin to see global enterprises that seek to do 10X to 100X the volume of current translations to be done. The price drops perhaps also signal that we are seeing the collapse of the old business model of static repetitive content done in a TEP cycle. While this is painful for all concerned, it is also a time where some will learn how to bring the technology, people and processes together to be able to deliver on new market demands. Recent announcements from Lionbridge and others show that change is necessary but making it mandatory and punitive is to my mind clumsy and ill-advised. (This old command and control mentality is really hard to subdue).  I suspect that change initiatives that do not create clear win-win scenarios for all the parties concerned will struggle and face growing resistance.  

I think that initiatives that marginalize, exploit or strong arm translators, are doomed to fail.  Willing, motivated and competent translators have been the key to delivering quality in the past and will be even more so in future. Disruptive change is not all it is cracked up to be. Even Google and Microsoft found that revolution consisted of a continuing sequence of small changes as they built their empires, and I suspect that, that approach will also work best here. It would not surprise me to find new leadership emerge from outside the industry, for these are surely interesting times, and openness and real collaboration are hard to find in the professional translation world.

 

Innovation & Collaboration

So how do we respond to these forces? What is an intelligent response to these kinds of macro changes?

I don't have many answers but list some possibilities below, and I do understand that this is very easily said and not so easily done:

-- Find out how to increase productivity while maintaining or even raising quality (Better, more efficient automation processes and effective use of MT especially data-driven SMT that learns and improves.)

-- Work together with global enterprises and find out what the highest value content is. Then learn how to make it multilingual efficiently and effectively as a long-term partnership mission. ( I doubt that this content is software and document localization or a few select pages on the corporate website)

-- Develop better, collaborative relationships with customers (the translation buyer) and the translators who are the keys to quality to build long-term leverage and benefit or all the parties in the game.

-- Develop higher value add services like transcreation (is there really no better word) in addition to basic translation services

-- Develop new business models and new ways to get high-value content done where there is a much tighter and longer term commitment from buyers, vendors and a team of translators i.e. a common and shared mission orientation rather than single project management and orientation. 

This is a time of big structural change and it will require innovation and collaboration on a new scale. The question that I have been asking and I think the market is also asking is:

How do we reduce costs, maintain quality and increase productivity and speed up the translation  process?

I know this is somewhat vague, but I think it should start with a new way to look at the problem. If we look at this as an opportunity or challenge rather than as threats that we bash and attack, we might find some constructive and useful answers. Today, I see overwhelmingly negative feedback on MT, crowdsourcing, open source and even collaboration initiatives from many in the professional translation industry in social forums. Very few trying to understand these forces better. People often go through a sequential emotional cycle of attack, fear, despair before they learn to cope, and eventually even thrive when facing disruptive change. Those who get get stuck at fear and despair, often end up as victims.  It is said that those who ignore the lessons of history are doomed to repeat them. Maybe, we should be talking much more about the Luddites and the “luddite fallacy” at all the conferences we hold. If the Luddite fallacy were true we would all be out of work because productivity has been increasing for two centuries. Perhaps the biggest change we need to deal with these forces is to adopt a new, dispassionate and open view. A new view is Step 1 in developing new strategies and new approaches to managing these forces, and technology is only part of the solution. I predict we will only see real success, where technology, process and collaboration come together.

The Data Deluge and the Growing Need for Innovation

Recently the Economist had excellent coverage on the huge growth in data on the internet in quite some detail. The amount of digital information increases tenfold every five years! They actually suggest that this data deluge is equivalent to the industrial revolution in overall impact, and that we are moving to what Craig Mundie, head of research and strategy at Microsoft calls a “data-centered economy”. He suggests we are at the nascent stage and that the infrastructural and business models for this new world are not well understood and are just being formed. He also says that big societal and macroeconomic changes are coming with the data economy. Data are becoming the new raw material of business: an economic input almost on a par with capital and labor. If you are skeptical, look at at Wal-Mart, Amazon, Google, Netflix, EBay, Farecast and see how data collection, organization, leverage and analysis underlies their core business mission and value.

I have written previously about how this data deluge is affecting the professional translation industry and why change is necessary not only in processes and tool technology but also in the whole view of the professional translation business. I have pointed out:
-- About how enterprises are also facing a huge growth in data volume from both customers and internal processes
-- The changing nature of the information required to build loyalty in the global customer base. The continuing evolution from static documentation to dynamic user and community created content that is considered the most valuable content in customer support is one example of how dramatic this shift is. The word of mouth impact on products and companies in social networks is already powerful and will become even more so in future.
-- There is also now evidence that crowdsourcing is and will continue to be a force in getting things done in the translation world, not so much because it is cheaper, but more often because it increases customer engagement and allows global companies to address long tail issues in a cost effective way. It does not work everywhere, but it is a model worth understanding and using. Also, we are likely to see more groups of highly motivated amateurs focus on large translation projects like the Yeeyan, Global Voices, Meedan initiatives already show.

However, in 2010 in the professional translation world (and elsewhere), people have gotten used to the tools and processes that got us here. If you look back ten years, I would say we’re not doing things too differently from the way we did in 2000. We use essentially the same software and processes we did back then, though things have sped up a bit and maybe TMS systems are taken more seriously of late. It is very much a TEP world that is optimized for the global business and localization reality of 2000. Professional translation services firms try and build value around project management capabilities and un-definable notions of “quality”. It is ironic that an industry “leader” is named SDL, which originally stood for Software and Documentation Localization. Do they really do any more than that today? Part of the website?

So how would one contrast what happens in the data economy with the old way? As the Economist points out:

Google applies this principle of recursively learning from the data to many of its services, including the humble spell-check, for which it used a pioneering method that produced perhaps the world’s best spell-checker in almost every language. Microsoft says it spent several million dollars over 20 years to develop a robust spell-checker for its word-processing program. But Google got its raw material free: its program is based on all the misspellings that users type into a search window and then “correct” by clicking on the right result. With almost 3 billion queries a day, those results soon mount up.

So as we head into this data economy what will professional translation companies need to do to thrive? It is clear that this is a time for innovation and real fundamental change, in both process and focus. A recent LISA report on Crowdsourcing has this statement from a senior Dell executive in the executive summary that summarizes what global enterprise buyers are looking for.
Dell: “What we want eventually from our services provider is a combination of localization, machine translation and crowdsourcing services.”

So what will a next generation LSP that thrives in the data-centered economy look like? Here my thoughts on this:
-- Competence in managing crowds and ensuring translation quality and managing the overall contribution and validation process 
-- Competence with machine translation, especially SMT which is a data-driven approach that will soon overshadow the RbMT approaches
-- Competence with recruiting, assessing and managing both professional and amateur crowds to engage in translation projects when and where needed
-- Competence with building and managing motivated and engaged online communities and social networks
-- Competence in building and managing large linguistic data repositories that can be brought to bear for different client needs
-- Large linguistic corpus analysis, cleaning and preparation skills
-- Skills in the development of systems infrastructure to enable large groups of professional and amateur translators to collaborate on large, data-rich and very high volume (10M words+)  translation projects
-- Systems process development skills with social networks and crowd initiatives and large data set management skills including handling audio and video translation cost-effectively and efficiently
-- The ability to make rapid and accurate quality assessments on work product in a regular, consistent and definable way
-- The ability to provide a satisfying and mutually beneficial experience for freelancers and amateurs that engage with the firm including useful and free translation productivity tools

This little promotional video for the book Different by Youngme Moon of the Harvard Business School, I thought had a very compelling message that is especially pertinent to the professional translation industry today.

Innovation is something we should all be thinking about and I would bet that collaboration is something that will help and further this exploration. I look forward to sharing this journey with you.

Why Machine Translation Matters -- Part II

I just spent the last few days at the ATA-TCD Conference in Scottsdale AZ. You can read highlights from the Twitter stream by searching on #TCD11. While it always nice to be in the sun for a few days, it is encouraging to see people in the industry focused on change along key dimensions like standards, technology and automation as well as the impact of social media on business strategy. I enjoyed several thought provoking presentations and discussions I had with many attendees during the conference.

One of the sessions I did was with Alon Lavie and Mike Dillinger who (both represent AMTA leadership) gave a very useful overview for LSPs to get a better, more realistic sense about MT and provided a basic primer on the subject. I thought that since my original blog post on this subject is my most popular post it might be useful to further develop this theme.

My original post focused on how MT could help address information poverty.Here are some of my new comments on why MT matters from the presentation at TCD11. The issue of growth in the sheer volume of information is increasingly clear to most but it is worth restating with some specific projections from IDC and EMC who monitor this very closely. The following chart shows projections just on enterprise content volume.

In actual fact the fastest growth is actually in user generated content (UGC) e.g. blogs, FB, Youtube, Flickr and community forums. It is estimated that 70% of the content on the web is UGC and much of that is very pertinent and useful to enterprises. This content is now influencing consumer behavior all over the world and is often referred to as word-of-mouth-marketing (WOMM). Consumer reviews are often more trusted than corporate marketing-speak and even “expert” reviews.We all have experienced Amazon, travel sites, C-Net and other user rating sites. It is useful for both global consumers and global enterprises to make this multilingual. Given the speed at which this information emerges, MT has to be part of the translation solution though involving humans in the process will produce better quality.

So if this is going on, it also means that what used to be the primary focus for the professional industry, needs to change from the static content of yesteryear to the more dynamic and much higher volume user generated content of today. This is often where product opinions are formed and this is also where customer loyalty or disloyalty can form as the customer support experience shows. This is what I call high value content. The following chart shows that MT will play a critical role in making this content more visible because it is high value and because of the sheer volume.

I also found another powerful argument for any multicultural society like the US and UK in this paper by Julia Alanen. She points out that language barriers keep 25 million non-English speakers deprived of critical government services (in the US) and that this also affects the rest of the population. While she focuses on the need for translators and interpreters, the content explosion is hitting this sector too. She point out:

Deprivation of plenary language access undermines human dignity, exacerbates many immigrants’ innate vulnerabilities, and harms society at large by impeding the efficacy of the healthcare and justice systems.

Getting back to the TCD conference, I was glad to see that several people (LSP leaders) asked me how they could learn more about MT and get more engaged with the technology. AMTA is proactively reaching out and trying to connect to the ATA by timing their conference to expand collaboration with the ATA. This is heartening to see and quite a contrast to negativity and the dueling conferences we see in other parts of the localization industry.

I also saw a quote from June Cohen, Executive Producer of TED Media at SXSW that I think is pretty wonderful (even though it may be naive and idealistic) when she was asked "What technology would you like invented? Or uninvented?"
"Instantaneous, accurate translation online. Nothing would do more to promote peace on this planet." 

Change is coming, and what are initially seen as threats can often be opportunities when one changes one’s own viewpoint. So here’s to change that creates more opportunity. Cheers.

Making Customer Support Content Multilingual

One of the largest new opportunities for the professional translation industry is in the Customer Support departments of high technology or industrial engineering global companies. I have briefly described the reasons why, but I thought that it would be worth elaborating on this further. 

Many global companies, especially those that are members of the Consortium for Service Innovation realize that a major new trend that they face is the growing power of the community and self-service in the Web 2.0 age. We see that already 98% of customer support interactions of an average global high tech company happen in self-service and the community forums. This is a major shift. However, the focus and much of the resource allocation in companies is still on the call support center and relatively static documentation and content which the professional translation industry is involved with. This makes less sense every day as evidence suggests that the customer experience is often formed by how support problems are handled. As the CSI points out, this is done mostly by self-service content and the “community” outside of corporate control.

If English speaking customers choose to solve their problems in this way, it follows that most global customers will also want to do the same. However, the content available to the global customer is often a fraction of what an Anglophile can get to and so non-English speakers are often left frustrated. There is now clear evidence of the following:

-- The customer support experience is increasingly formed outside the call center and customers strongly prefer self-service and community support.

-- The support experience is often critical in forming customer perceptions and developing brand loyalty.

-- Global customers do not have as much local language information access and thus probably have a less satisfying support experience.

-- Making much more knowledge and product support content available is a key to generating a better support experience.

-- Good self-service knowledge base content and greater visibility to high quality community content can greatly enhance the customer experience.

-- There is a clear relationship between customer loyalty and increased revenue and probably repeat purchase.

This situation presents a significant opportunity for the professional translation industry. However, given the huge volumes of content that need to be made multilingual it is important and necessary that automation be a key component of the multilingual content development strategy.  Microsoft was a pioneer in doing this, and they showed that hundreds of millions of customers were willing to use machine translated knowledge base content. Until recently they had all the knowledge base content available in at least 9 languages and are expected to expand this to more languages in future.

The benefits of global enterprise making large amounts of support content multilingual are significant, both financially and in terms of positive customer as the following graphic shows. Not only is self-service content a HUGE cost saver it can also create real positive brand perceptions. 

The highest quality content production process will always need a high degree of human steering and expert linguistic guidance. Machine translation without humans may not provide the translation quality necessary to provide a positive support experience. The professional translation industry has a major opportunity ahead as major global corporations begin to act on this trend.

The role of customer support is shifting from answering questions and solving customer problems to facilitating a network of people and content. The Consortium’s research shows that the majority of the customer support experience is with content; not with people. The benefit of offering that content in the language of the customer is huge.

I will continue on this theme for at least another blog entry. I strongly recommend that you take a look at the CSI website as it is filled with great information and research on what is going on in the world of Customer Support.

Quote from the CSI web site:

Rather than continuing to invest in doing what we do faster, better, and cheaper, maybe we need to look at doing something altogether different... maybe there is a lesson for the localization industry in this.