How should enterprises approach the decision to implement a TMS v.s. outsourcing translation management to an LSP?

by | May 4, 2018

Welcome to the second Wordbee Experts chat. The transcript below has been lightly edited.

Tanja Falkner - Growth Marketing Manager at Wordbee: Welcome, everyone, to the second Wordbee experts chat!  

Robert Rogge – Senior Marketing Manager at Wordbee:  This is the Wordbee experts chat, calling to all Wordbee Experts around the world.

Tanja Falkner: So, today we want to answer the question, “How should enterprises approach the decision to implement a Translation Management System (TMS) v.s. outsourcing translation management to an LSP?

Isabella Massardo – Italian Translator, Trainer, Terminologist: OK, you’re assuming that an enterprise already knows of the existence of a TMS.

Tanja Falkner:  Yes. But before jumping into the question, I thought we could discuss pros and cons of both sides. Why don’t we start with the pros and cons of implementing a TMS.

Isabella Massardo: Pros: Total control of your multilingual content workflow, the ability to create ad hoc linguist teams, and cost control.

Cons: An enterprise needs to allocate a budget for translation technology implementation. Sometimes, it’s easier to outsource the whole thing to an LSP.

Robert Rogge: I would say cost control but extend that to a notion of “control” in general. When you work with provider companies, it’s basically a results-based relationship. Consequently, enterprises don’t always know what’s going on behind the curtain. If that bothers them, they should get a TMS.

Hey, Isabella, how many enterprises don’t know what a TMS is in your experience?

Isabella Massardo: I think there’s a strong information asymmetry. By that I mean, many enterprises with websites in, let’s say, 20 languages simply outsource the whole localization process because they’re not aware of the possibilities. I’ve seen enterprises develop a “special” tool for the localization of their website simply because they didn’t know of the existence of TMS with plug-ins for website localization.

Tanja Falkner: Oh really? You’d expect people to know that any kind of technology basically already exists. Especially with something like translation, which almost everyone needs.

Isabella Massardo: Yes, I know. I think you guys have a hard task.

Tanja Falkner: So educating first, then we can talk them into buying a solution.

Isabella Massardo:  Informing more than educating.  I think that many companies prefer to outsource because — they think — it might be cheaper and, as Robert said, they don’t know what’s behind the curtain.

Tanja Falkner: Let’s talk about the pros and cons of outsourcing to Language Service Providers then. Is it really cheaper?

Robert Rogge: I think you need to have a certain volume of translations for your own TMS to be cheaper, but well, you know relationships last a long time. When people have one that works, they tend to stick with that. So in some sense, relationships with your LSP are sticky in the same way that prices are sticky in economics. The theory says wages should fall, but in reality, people are afraid to lower prices. So, “sticky relationships.”

Isabella Massardo: Maybe. It’s definitely less hassle and headache.

Robert Rogge: I don’t think it’s cheaper working with an LSP, personally. I’m not sure of the numbers here, but if you have a good TMS, then the DIY approach is probably cheaper.

Isabella Massardo: I agree. Plus, you have total control of the workflow.

Tanja Falkner: And I believe some companies want to do their own in-house post-editing, right? So that’s double trouble to first outsource and then do some work in-house, leading to more costs, isn’t it?

Robert Rogge: And your translators, and how much you are paying. LSPs take a 40% margin on average, but that’s just an average. If your LSP is taking 50% or 60%, and you have lots of content to translate, then it might be cheaper to go your own way.

Isabella Massardo: Well, you could have in-house post-editing, for example if it’s done by an expert, let’s say, in Italy even if the Italian expert doesn’t speak a foreign language, he knows the domain. I think it used to be called “monolingual post-editing” or simple “in-country review.”

Tanja Falkner: Is it still a thing?

Isabella Massardo: Post-editing, you mean?

Tanja Falkner: Just asking, ’cause you said it used to be called that.

Isabella Massardo:  It’s a term that I’ve seen in few books and articles about PEMT. Never met a monolingual post-editor :stuck_out_tongue: I think what some enterprises do is send the translation done by an LSP to their country manager for a check.

Robert Rogge: Haha, for anyone looking for business ideas, you may be able to corner the “monolingual post-editing” market if you start today!

Isabella Massardo: It’s a back and forth process and very time consuming. It would be better to implement a TMS.

Robert Rogge: Right, so relating to that, so if you had a TMS, you’d just have this country manager log in to the system and do it right there.

Tanja Falkner: So, the only advantage of outsourcing is to reduce headaches, then? And in some cases cost.

Robert Rogge: But if you are in an LSP relationship, there are fifty different answers for how fifty different LSPs would get that done. I guess anyone thinking about moving to a TMS needs to have a serious conversation with their LSP first.

Tanja Falkner: But again, if you had a TMS you would probably have a whole in-house team and wouldn’t need the country manager to do post-editing.

Robert Rogge: You might still, actually.

Isabella Massardo: You could have an in-house team for the main languages and PM, or simply a team of freelancers with whom you have a “sticky” relationship. (Sticky, is that the word?) There is also the aspect of transparency.

Robert Rogge: About the in-house team, country manager thing. Imagine you have a localization manager in Portugal who manages the localization of your Chinese sales brochure. Your China country manager may very well want to scrub that and also make sure it’s culturalized for China and doesn’t say anything it shouldn’t say.

Isabella Massardo: Exactly.

Tanja Falkner: Right, makes sense.

Robert Rogge: Yeah Isabella, sticky is the word! You can totally have in-house teams for the main languages or a team of freelancers. Actually, so 80% of translators worldwide are freelance. I’m wondering where the in-house translators normally work. What kinds of companies have them?

Isabella Massardo: I have colleagues who work in-house at LSPs, Ministry of Justice, Foreign Affairs, tech companies, banks, financial institutions in general.

Robert Rogge: I guess the common denominator here is that they’re big? Does security play a role in creating in-house teams, and by extension, working with an LSP or not working with an LSP?

Isabella Massardo: It might be a good reason. Or simply, if you have huge volumes in, say, English-Dutch, it might be cheaper to have an in-house translator who acts as PM as well.

Robert Rogge: Right. The volume vector is important too. In our other chat for this month, we actually talked a lot about what an enterprise is, and volume factored into that a lot.

Tanja Falkner: Let’s jump back real quick to the pros and cons of outsourcing since it’s sort of related anyway. So it seems outsourcing reduces headaches but in general is more expensive. What else?

Isabella Massardo: Transparency: It’s important to track the progress have access to metrics.

Robert Rogge: Well, for the cons, one thing that lots of enterprises overlook is who has the translation memory. Lots of enterprises don’t know what a translation memory is, and their providers use one but may not be offering discounts there. So there is advantage in taking control of your linguistic resources. In some companies, if there are lots of user guides or boilerplates where the content consists of standard Office files, etc., it would be worthwhile to have someone on the team learn a TMS for those savings alone.

Isabella Massardo: Yes, that’s transparency, too.

Robert Rogge: Related to Isabella’s mention of companies not knowing about TMS solutions, many of them don’t know what a translation memory is. I worked with a company on the Dow Jones that had no idea what a translation memory was. Yeah, transparency is so great. What are the negative consequences of the lack of transparency?

Tanja Falkner: Higher cost - just not knowing about translation memories for example.

Isabella Massardo: Well, you don’t have an overview of your costs, cannot track the progress of your projects, no control over quality sometimes, in case planning is lacking you have a slower time-to-market control over your information.

Robert Rogge: I have heard that, sometimes, proofreading is not actually performed, even though it was sold as part of the localization product by the LSP. So I would include workflow transparency too.

Isabella Massardo: Even having something as simple as a terminology database can help enormously. Terminology can help you improve your company’s communication.

Robert Rogge:  That’s fascinating, Isabella, because I can see this conversation:

LSP: “We think that we should build a solid terminology database and style guide for your content. This is going to improve your business, and it costs X.”

Enterprise: “Great idea, maybe we’ll get to it next year! (Man, I don’t want to pay for that!)” And when the enterprise gets their hands dirty and launches their TMS, suddenly it’s, “OMG, we need a terminology database really bad!” So you know, getting your hands dirty in what you’re doing as a company can change perspectives.

Isabella Massardo: That is exactly how the conversation goes.

Robert Rogge: You sound like you’ve had that conversation before, Isabella!

Isabella Massardo: I have, I admit.

Tanja Falkner: I’m sure there are lots of people who can relate.

Robert Rogge: What about this slower time-to-market concept here? Does working with an LSP really lead to a slower time-to-market? I think it all depends on the skill of the LSP and the strength of the relationship.

Isabella Massardo: It depends on the LSPs, on being able to plan, having resources (for example, translators) available. If you’re an LSP with a TMS, you should give your client access to the platform (or a part of it) so that they can access the project and see the progress, any questions there might be, etc … we go back to transparency.

Tanja Falkner: I believe this is part of the answer to our original question: “How should enterprises approach the decision to implement a TMS v.s. outsourcing translation management to an LSP?” So time-to-market needs to be considered, transparency, and many other things we mentioned already. But what’s the real approach? You know you need translation. What do you do? Is there any step-by-step guide to follow when making this decision?

Isabella Massardo: Good point.

Robert Rogge: Get to the heart of the matter!

Isabella Massardo: I think it’s more like, “We need to translate this, let’s Google how to do it. Oh wait, let’s use Google Translate!” 😉 Just kidding, of course.

Tanja Falkner: Hearing that kinda hurts everyone working in the localization industry, doesn’t it? At least, I already feel that way.

Robert Rogge: Yeah, you hear that all the time and it’s pretty annoying. But it’s also a testament to how invisible localization can be when done well. People look at localized content all the time and don’t even realize it.

Isabella Massardo: Yes.

Tanja Falkner: Let’s assume we don’t go directly to Google Translate. What’s the process?

Robert Rogge: So back to your question, Tanja, about the steps to follow. I think that the first step is actually to triangulate how much you’re paying your LSP for translation services versus what you would pay going it alone, not counting your own project manager. If the amount saved is equal to the salaried time you would spend managing the translations, at least you can break even. From there, you might consider things like time-to-market, linguistic resources, and the initial investment. That initial investment might be a turn-off, because you may have to build a team of freelancers or hire in-house translators, and maybe you don’t know who they are, or how to hire them.

And so, this takes us back around to the part of the conversation where we baked our noodles, which is that any TMS solution worth its salt lets you have LSPs in there, too. So it’s totally possible to have your LSPs coming into your TMS, which can ease the burden of getting started on your own.

Isabella Massardo: Bravo. And how do you choose a TMS? What criteria would you follow?

Robert Rogge: How to choose a TMS … hmmm. First, I would look at the illustrations on their homepage. Are they cool? Do they seem smart and friendly? If illustrations are part of your criteria, has some very nice bee illustrations. Just sayin’.

Isabella Massardo: I would look at my own workflow and look for a TMS flexible enough.

Robert Rogge: Well, so what if you’ve been working with an LSP and you don’t know what your workflows are?

Isabella Massardo: Tech support and collaboration are important, too.

You’re making it very difficult.

Tanja Falkner: Do you think it’s even worth investing if a TMS provider is better, or maybe building your own?

Isabella Massardo: You mean reinvent the wheel? 😉

Tanja Falkner: Yeah. That already makes it sound bad.

Isabella Massardo: Sorry 🙂

Tanja Falkner: No, no, it’s the truth. I guess there’s no need for discussion here then. We don’t want to reinvent the wheel. But some companies or LSPs still do. So what’s the quantity of translations you need to have in order to be better of at implementing a TMS? Or is this all based on cost? What are the indicators?

Robert Rogge: Yeah, it’s the truth, building your own TMS doesn’t make so much sense. But it’s… for large companies with lots of workflows, it’s difficult to evaluate. I think they can get lost. Even some of those companies probably don’t realize how much stuff Wordbee actually does. So for example, there’s an IBM project called OpenTM2,, and they are reinventing the wheel. It’s open source which is cool. But I think at Wordbee, it’s hard for us to understand why someone would do that. Wordbee does way, way more than OpenTM2 does, and it’s not like Wordbee is breaking the bank for companies like IBM.

Isabella Massardo: Well, you guys have a hard task ahead of you.

Robert Rogge: Haha, you are increasingly a part of this task, Isabella 😛

Isabella Massardo: How are you going to make enterprises aware of the joys of a TMS? Oh, dear…

Tanja Falkner: We’ll just send over some of our super cute bees to do the job 😛

Isabella Massardo: 😄

Robert Rogge:  So, Tanja, you asked how many translations you need to have to be better off with a TMS, or is it all based on cost?

Tanja Falkner: Exactly. I can imagine there is no X-amount but there must be some indicator businesses can hold on to.

Isabella Massardo: I don’t have any numbers, sorry. This could be a good question for WB enterprise clients. Why did they decide to implement a TMS? They won’t give you exact numbers, but maybe some indicators.

Tanja Falkner: Great idea, actually.

Isabella Massardo: Write a short case study, 800 words max.

Robert Rogge: I honestly don’t think you need huge quantities of content. You just need to have enough content to say, “I want the translation and invoicing to be all easy.” So any small LSP is already going to meet that level, and they should go out and get a TMS right away. But for an enterprise — let’s just say 200,000 words. That’s not a lot, but it’s enough, in my opinion. I say that because I’ve seen these small operations use Wordbee successfully. It’s not so hard, really.

Isabella Massardo: OK, that is reasonable.

Robert Rogge: Yeah, this is a very good idea, IsabellaWe can do some quick math on 200,000 words here to better illustrate what we’re talking about.

Tanja Falkner: Right. And you can scale the TMS, so it’s not like you need to buy every single feature there is, and then the cost are manageable.

Isabella Massardo: Flexibility, as I said. A good tech support.

Tanja Falkner: Absolutely.

Isabella Massardo: A collaboration with the TMS provider. Nothing else?

Tanja Falkner: I’m just waiting for Robert to finish doing his math there, then I think we’re all ready to wrap up.

Robert Rogge: So 200,000 words of average, non-specialized content working with your own team of translators might cost you, say, 16,000 to 30,000 euros, depending on who you’re working with. If you work with an LSP, you can add their margin, so maybe 20,000 euros worth of content becomes 30,000 euros worth of content. From there, you can calculate your savings with translation memory, learning how to use machine translation, etc., etc. So I think this is a decent figure: 200,000 words. I mean, using a TMS isn’t rocket science. Does that make sense?

Tanja Falkner: What are you getting at? Are you saying that implementing a TMS is cheaper?

Robert Rogge: Well, I think it is cheaper, yes, but I’m answering the original question, “How much volume do you need before a TMS makes sense?” And I’m saying that at 200,000 words, the math starts to make sense.

Tanja Falkner: Right, got it! Yeah, absolutely.

Isabella Massardo: Agreed.

Robert Rogge:  But I’m betting on the TMS being easy to use. In my opinion, it’s not rocket science, but this all goes out the window if your needs are remotely technical, like APIs or software stuff, which is a totally separate aspect that we didn’t get into yet.

Tanja Falkner:  Let’s save that one for another day. It’s a big topic. Any final thoughts on this one?

Isabella Massardo: Not from me. Thanks for inviting me, by the way!

Robert Rogge: No problem, Isabella, you’re a Resident Expert now!

Tanja Falkner: Well, to sum this up, I think the message here is that when you have to decide whether it’s better to outsource or implement your own TMS, you should look at the cost, the volume, and your needs, really. You don’t need a massive translation requirement for implementing a TMS to make sense, and it will give you more control over the process, transparency, and a big load of other advantages. Assuming you have a flexible TMS that fits your needs 😀

Isabella Massardo: Scalability, also, and your tech provider should always be your go-to for advice and consultancy.

Robert Rogge: And that you can still work with your LSP on your own TMS, too, so you can ease that transition period or simply do it for greater transparency with the LSP.

OK, ciao folks! You guys rock!


Our experts panel

Tanja Falkner

Tanja Falkner

Growth Marketing Manager, Wordbee

Isabella Massardo

Isabella Massardo

Italian Translator, Trainer, Terminologist

Robert Rogge

Robert Rogge

Senior Marketing Manager, Wordbee

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