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Friday, May 22, 2015


Cost scaling through technology management

Wayne Bourland

There are many pieces to translation cost, with vendor rates, computer-aided translation tools, TM leverage and machine translation (MT) being the primary ones. Each had to be addressed. We gained some initial cost benefit by reducing our vendor pool from five to two. It’s a prominent trend in large enterprises across the outside services spend ecosystem. On the client side, we gain lower vendor management overhead, volume discounts and the ability to invest more time in partner relations — and honestly, this one doesn’t get the attention it deserves. The vendor gains increased revenue. It’s a win-win for those involved, but does have implications for the broader market. Once we had resized our vendor pool, we turned to rate analysis. We reviewed industry reports from Common Sense Advisory, spoke with other large enterprise clients — in aggregate, of course; no specific rates were discussed — and had an opportunity to hire in someone from the vendor side with the added benefit of strong vendor-side pricing knowledge. We negotiated roughly a 10% reduction in cost, while still leaving our partners with healthy enough margins to continue the great service they were providing.

Rate discussions are a fine line to walk. You want to get the best possible rates and be fiscally responsible, doing the right thing for your company, but cutting cost too aggressively and putting your partners in a position of having to lower their service level does neither of you any good in the long run. There are, of course, scenarios where lower cost and lower service levels are appropriate, but that was not the case here. Over this same four-year period of time, we have seen TM leverage go from 20% to over 40%, a healthy number given the rapidly changing pace of technology and technology marketing, especially in the consumer market. We did not do anything magical to increase leverage; we invested in maintaining the quality of our TM assets by having our quality assurance vendor go through the TMs to weed out inconsistencies, duplications and unused segments. We also continued to expand our internal stakeholder list and populate our TM. Altogether this was probably the easiest thing we did, and worth an estimated $2 million annually at today’s volumes. We renegotiated project management fees while negotiating translation cost, reducing them from 10% to 5% on average. This was primarily a result of the realization that with our increased volume and spend, 5% was an appropriate rate. We have not made progress on desktop publishing cost; it is on the roadmap to tackle in the 2014 fiscal year. . .

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Above excerpt taken from the January/February 2013 issue of MultiLingual published by MultiLingual Computing, Inc., 319 North First Avenue, Suite 2, Sandpoint, Idaho 83864-1495 USA, 208-263-8178, Fax: 208-263-6310. Subscribe

January/February, 2013