This document discusses choosing a strategic sourcing model for localization. It outlines key questions to consider such as localization needs, resources, costs, timelines and risks. The options range from fully insourcing to outsourcing localization. The best approach is often a hybrid model. Understanding an organization's position on factors like supplier dependency, cost tolerance, time-to-market pressures, risks and quality assurance needs helps determine the optimal sourcing strategy. A flexible approach may be needed as needs change over time.

1. Choosing a strategiC sourCing Model for loCalization
A jonckers white pAper
your locAlizAtion hotkey

3. Choosing a strategic sourcing
Model for localization
By Ian T. Butler
Contents
introduction Page 4
the supplier Continuum Page 7
supplier dependency Page 8
Cost tolerance Page 9
time-to-Market Page 10
risk Page 11
Content Quality assurance architecture Page 12
summary Page 13

4. introduction
do you need to launch, grow, improve,
or economize your localization program?
If you’re responsible for your company’s localization efforts, you may be
caught in the same conundrum as many of your counterparts—you need
to make big decisions about how to best structure your localization program
and team, but it’s tricky to match your ever-changing needs with the right
solution. And what’s more, you don’t really have time to sort it out.
The following questions may apply to you. You may be wondering what
to do next and what your counterparts in other companies are doing:
• Is your company localizing for the first time?
• Are your company’s localization needs changing, maybe even rapidly
growing?
• Are you being asked to manage localization costs carefully? Is purchasing
becoming centralized, or is there a change to your supply chain strategy?
Or, maybe there’s a hiring freeze.
• Do you staff up to meet your increasing localization volume? How will
demand vary over time and can you predict your staffing needs?
• Is your business expanding to new markets and countries? Do you have
to meet the needs of the business without increasing the size of your
team?
• Are you having difficulty finding qualified resources, especially
since the demand for translation services is growing so fast?
• Are you struggling to be more efficient and get more for less
in your organization?
• Is corporate strategy impacted by a limited supplier base?
• Are you trying to project your localization budget and not sure how?
• What about quality? Are your customers—internal and external—happy
with the quality you are providing? Is there any perception at all of
quality? Have you had to lower your quality standards out of necessity
related to bandwidth, resources or tools?
• Could you benefit from new tools, processes and practices to enable
effective project management, streamline, and maintain quality?
page 4

5. If you’re facing one or more of those issues, how do you begin to solve
them? Companies that blazed the trail before you, and have achieved suc-
cess, made their decisions with the right data. Without it, they know they’re
shooting in the dark. They ask themselves questions like the following.
1. How and where am I currently spending my money on localization?
Is it internal or external? Is it centralized? How many decision makers
are involved?
2. What is the plan—what is our international road map? What markets and
territories are we planning on entering in the near future and long term?
What’s our time frame? What are the priorities?
3. What exactly do we need to accomplish? What services do we need?
i) Is our content stagnant or growing? What is the content growth
rate? Does it differ for each separate content stream – marketing
content, product content, support content, etc.
ii) How technically complex will it be to localize?
iii) Is the technology architecture and the business logic conducive
to internationalization? Does the very business model need to be
adapted to the market? Do core processes need to change?
When PayPal launched in Germany they had to change their position-
ing and site content for customer acquisition from an emphasis on
credit card protection. In Germany the bank transfer (iEFT or ELV)
system is very efficient, and bank overdraft rates are lower than
credit card rates, so consumers prefer debit cards and ELV over
credit cards. This effectively changed PayPal’s value proposition
in Germany.
In mobile phone design, one of the key safety feature requirements
is emergency services accessibility—whether with SIM, without, PIN
locked, or unlocked. In order to test this critical safety feature, simu-
lations need to be run, and there are many combinations. Modern
multi-band mobile phones operate in multiple territories and access-
ing emergency services in each country must be possible under all
circumstances. Accessing emergency services requires different
numbers in different territories e.g. 911 for the US, 999 for UK and
Ireland, though all GSM phones now support 112 access as an inter-
national emergency services number. This service must be tested
in either a simulated environment or on a live network. In the US,
network service providers and emergency services are cognizant
page 5

6. and tolerant of such testing. In Ireland and the UK, if you place a num-
ber of non-essential calls to this network you may be prosecuted.
iv) How much will the content change over time? And, how much
stays the same? This will affect your ability to manage costs by
creating a translation memory that can be leveraged to make
future translation more efficient and cost-effective. Industry
best practice is to utilize translation memories.
For example, I worked with one customer who had experienced rapid
business and online content growth, and was translating into 17 lan-
guages. Their content had mushroomed over two years. To produce
the now large content base, they had selected to hire employees
as writers to author and translate content. They did not deploy any
translation management tools during this period. As a result they had
reached a point where their quality had deteriorated and customer
complaints had increased. This also led to difficulties in brand consis-
tency. The complaints manifested as concerns about the quality of
the writers, when in reality the issue was the inability to manage
their resource base because they lacked the necessary support tools.
They were trying to grow faster than their model could accommo-
date. Translation management tools like translation memory and
terminology management were part of the ultimate solution.
4. What are the existing internal resources you can leverage, as well as
the boundaries within which you must work?
5. Can you realistically achieve the goal internally, or do you need
outside resources?
a) How many people would you need to hire? How quickly?
Is that achievable?
b) How do you make sure everything gets done? And how do
you manage the level of quality? Is there a quality department
already in place?
c) How do you ensure that the project is consistently well-
managed, and that quality standards are upheld? Would you
rather manage the project yourself, or do you need to hire an
internal or external resource?
d) Do you need a dedicated full-time resource for the long term?
If not, how do you staff for that? Do you outsource?
e) If there will be engineering requirements, how dependent is the
project on internal development staff? Are the product develop-
ment life cycles complex? How realistic is it to outsource? Should
you ask a supplier to staff someone on site? Will there be issues
related to the security of your intellectual property? What is the
page 6 track record of the supplier on this front?

7. the supplier Continuum
Answering the questions above is key to understanding your drivers for
selecting a strategic localization sourcing model. But how do you actually
devise a plan and system that meets your localization needs? As with any
service, the decision space spans the supplier continuum.
The supplier continuum spans from a model completely resourced with
full-time employees, through a lightly managed turnkey solution leveraging
outsourced partners, to a low-cost supplier or community resourced model.
Somewhere along this continuum is the right balance for your company.
Answering these questions above will help you identify your relative ap-
petite and dependency on five key decision drivers and lead to a better
understanding of where you are in the continuum. The drivers we’ll discuss
include supplier dependency, cost tolerance, time-to-market, risk, and con-
tent quality assurance architecture.
page 7

8. supplier dependency
The extent to which you can rely on third-party suppliers will vary with
corporate strategy, resource availability, project timing, level of risk aversion,
and experience with outsourced project management.
If you require low dependency, your choices are limited for the usage of out-
sourced partners. Your fixed costs are likely to be higher, but you will have
closer integration with localization and development services. An extremely
complex technical environment—or one where extremely short response
times are necessary—often calls for such an implementation. Sometimes
this is only applicable for certain stages of the product life cycle.
For Example: PayPal has a highly complex true multilingual sim-ship archi-
tecture. To support this, PayPal uses on-site linguists during the go-live pub-
lishing stage of major international releases. They do this to support rapid
response and closure of bugs found during the final ‘go live’ stage of product
updates.
If your organization can tolerate higher dependencies, then you have greater
opportunity to establish competitive relationships with suppliers and can
more successfully transfer your cost base to a variable model.
This typically means a high number of suppliers, which can be complex
to manage and inadvertently drive fixed costs. Mitigation strategies include
limiting your supply base to key suppliers, or implementing a trusted or certi-
fied supplier process. A number of mature localization buyers formalize the
extent of trust in a supplier relationship through supplier certification
or definition of “preferred” or “premier” status.
For example: SAP’s ‘Ecosystem’ model uses a formal supplier
certification process.
page 8

9. Cost tolerance
Perhaps a strategic driver in your organization is to minimize fixed costs and
fuel growth with proportional variable cost only. Perhaps your organization
has a cash surplus, or perhaps there are strategic and/or monetary incen-
tives to building a dedicated team.
Again, in-sourcing drives fixed cost, outsourcing transitions the Total Cost of
Ownership (TCO) to a more variable component, with a few exceptions. If
you choose a model that leverages a community or non-localization supplier
base, the fixed component and the variable cost component can both be
low. It is important to note that—as attractive as this sounds—the pitfalls
are many, and it can only be implemented with a well-managed and passion-
ate suppler and/or community base. Desirable, but not for the fainthearted.
For Example: Booking.com uses an internal team of some 80+ multilingual
writers and editors on staff to maintain their content base. Many other buy-
ers have only one full- or part-time language resource, preferring to out-
source their language service needs.
Sun Microsystems, Microsoft, Adobe and Facebook are successfully utilizing
community models for a variety of different content streams and to varying
degrees. Interviews with leading implementors of community based local-
ization projects confirmed that overall cost savings are not dramatic and are
often on par with traditional localization projects. Implementation can often
require substantial capital investment and quality management processes
can be complex.
page 9

10. time-to-market
In today’s competitive markets of online and mobile business, the shelf life
of features and applications is dramatically lower than it has been in the
past. Maintaining a competitive advantage in these markets requires
a reduced time-to-market for new features and products.
Increased time-to-market may mean you have no choice but to rely on third-
party suppliers. It may not be possible to identify and recruit the necessary
resources in the time frame you have to successfully deliver your product.
Facebook chose a community localization model and successfully
completed the first draft translation of their first localized language, French,
with nearly 2500 contributors in just 24hrs. They did take, though, several
weeks before actually releasing it to confirm quality, as it was their first at-
tempt at such a model.
page 10

11. risk
Risk profile is a feature of corporate strategy which involves many factors
governing its profile in any given organization. By its nature, there is an inher-
ent increase in risk as you relinquish direct control over a project. As any
good project manager will tell you, risk mitigation, management and tracking
is what makes the difference. That aside, your organization may place fun-
damental constraints on the risk profiles acceptable for given projects. You
need to know the balance of the acceptable risk you can tolerate for your
time-to-market needs. Again, mature buyers often use a trusted supplier
model to help mitigate such risk.
Specifically with community or non-localization supplier models, there is in-
creased risk due to the complexity of managing content quality within a less
structured ‘crowd’ environment. Complexity adds risk.
page 11

12. Content Quality assurance architecture
This is a measure of an organization’s need and ability to manage quality.
Have you successfully integrated outsourced projects into your Product De-
velopment Life Cycle (PDLC) before? Can your quality management system
handle third-party quality input? Do you have the infrastructure and process
to manage quality with outsourced partners? What about the nature of your
content—is the required Intellectual Property (IP) protection so high that
you can not allow third-party access to your content? Can your brand man-
agement deal with outsourced quality? Are there regulatory or compliance
issues at play, or is your IT department highly risk-averse and unwilling to
allow any third-party access? Professional third-party localization providers
have solutions to each of these scenarios, but understanding where your
needs sit along the continuum is key.
page 12

13. summary
Most often, the decision on which model works for you is a hybrid—part
internally resourced and part external. Identifying where your needs place
you in each decision space helps determine the best model for your organi-
zation. Looking to organizations that have faced similar needs in the past can
help confirm which models may be suitable.
Organizations evolve over time and so must localization strategies. Whether
you are just beginning on the road to international expansion with time-
to-market as your key driver, or whether you are a mature buyer with cost
management on your mind, defining and evolving your long-term strategy
is the key to success.
page 13

14. ContaCt
contact-info@jonckers.com
regionallY
Asia Pacific
16B5-16B8, Tower 3,
Xihuan Plaza
No.1 Xizhimenwai Street,
Xicheng District
Beijing, China P.R.C. (100044)
Phone: +86 10 5830 1608
sung.cho@jonckers.com
Europe
Av. Hermann-Debroux 15a,
B -1160 Brussels, Belgium
Phone: +32 2 663 50 22
eu-sales@jonckers.com
USA
4640 SW Macadam Avenue
First Floor, Suite 50
Portland, OR 97239
Phone: +1 877 590 1927
us-sales@jonckers.com
© 2008 Jonckers, LLC
All rights reserved.

16. your locAlizAtion hotkey