Self-Actualization for Language Service Providers

Bryan Montpetit 00:00
Just before we hop into our next, our next presentation, which is the self actualization for language service providers by presented by Don dipalma. So yeah, I love Don's topics, he always has riveting topics that are very, very, you know, I guess, say up to date with respect to what's going on in the industry. I mean, obviously being the CEO of CSA research, he's he has a lot of insight into our industry, always a wealth of information. And I think that one thing I most love about Don presentations, is he's the epitome of a vocabulary. I mean, his vocabulary is extraordinary. And I mean, if I was interpreter, I definitely would not want to interpreter for him during his presentation. So with that, the poll just ended. So thank you for doing that. And we have Dawn is going to be joining us in one little moment. I think he's popping in now. There we are. Okay, doing great. Again, I just I don't know if you heard what I mentioned about your, your vocabulary. I think it's explicit. And I would hate to interpret for you. Just it just as a matter of reference,

Don DePalma 01:12
comes from too many years listening to Jesuits when I was in school.

Bryan Montpetit 01:16
Alright, fantastic. So what I'll do is I will hand this over to you. You can take it away and I'll pop back in towards the end. When I pop back in, it's basically a cue for time.

Don DePalma 01:26
Okay, great. Okay. Hello, everyone. When I first saw this load from home call for presentations, I recall the first one back in April, I remember back then the uncertainty, the lack of clarity, the nascent economic pain, the unreality of everyone doing their Lok and just about everything else, all. In that April presentation, I laid down an agenda for LSPs. And for, for enterprise locally localization departments as well, to take the time to examine what they were doing, where they wanted to be, and in general, prepare for some indeterminate future. I recommend it introspection, a frank assessment of people process technology to achieve their potential as LSPs and to do some remediation and innovate. Now that we're

Bryan Montpetit 02:15
sorry, you would cut out just for a brief moment, I apologize to interrupt you. Just if you can go back a couple of seconds that you would just kind of,

Don DePalma 02:22
okay, so I got into the introspection, a frank assessment of people of process of technology to achieve their potential as LSPs and remediation and innovation to prepare for the future. Now, the question of self actualization in the title, where does that come from? Well, we're now in the future, and so much of what we see remains indeterminate and uncertain. While I pondered that reality, I recalled a similar model of growth in a distant Intro to Psychology class. It was in the form of Abraham Maslow's work in the 1940s on helping humans achieve their quote potentialities. The parallel here is achieving the potentiality of an LSP in overcoming any deficiency in our current operations or plans, and psychobabble, it's a question of becoming the best person or the best LSP you can become for LSPs it's about reaching the highest level of development in this critical knowledge. Industry producing information applications and other services for for their clients gone.

Bryan Montpetit 03:25
I don't mean to interrupt you again. I just wondering, are you intending on sharing your screen because we don't actually see it? Oh,

Don DePalma 03:29
it's I was sharing I thought I had. So

Bryan Montpetit 03:35
just wanted to make sure we weren't. We were gonna miss all the great stuff that you had, because you normally have fantastic presentation. So.

Don DePalma 03:42
Okay, sorry about that. I please. Let's see. Are you seeing the PowerPoint?

Bryan Montpetit 03:48
We are now Yes. Thank you very much. Okay.

Don DePalma 03:51
Okay, let me see it now, which is always the challenge. Okay. So. Okay, so just so you saw that the first slide was basically just a cool, violent LSPs. Again, the nod to the Jesuits were LSPs going. Rick says since we last spoke is, let me just get where I am here. Okay, the agenda. What I'll do is, in the next 20 minutes or so, review my advice from April, I'll present three challenges that are driving uncertainty most for most people in the language services, and technology sector, both suppliers and buyers that they'll encounter. This will include some thoughts from my APR presentation about how the economy recovers, I have to admit that that section is a bit of a downer, but we've all lived through this over the last 678 months. However, I do follow that with a more optimistic assessment of the road ahead. That is the growing demand for producing information applications and products in other languages. And then, as for the last block in today's session, I'll discuss the journey to self actualization and the con txt, have several paths that an LSP or localization department could take. I briefly introduced them in April today, in response to quite a few requests after that presentation, I'll expand on them and what they mean. So moving on, since we last spoke, let's begin with a nod to quote the pandemic that once was unquote, as what we like to call it now that it's, it's popular in some political circles to talk about it in the past tense for any non linguists on the call, note that the phrase was in or the word was in the pandemic that once was, is the past tense. That means something that happened and it's done and dusted. So it's no longer current. For politicians, it means something that we don't want to talk about anymore. So we'll move on to though, some stuff that we've seen over the last few months. This is from the April presentation, a few thoughts that I left attendees with at the end of that session, then we'll move on to the three challenges that face this sector. Ultimately, what I said was the demand will ultimately recover it had been down. We've seen in some data that I showed at the time, for very basic reason. It'll recover because there's nothing in the Coronavirus, or any future vaccine or bleach treatment that will enable people to suddenly and fluently speak in another language that's not their own. Regardless of what happens, you can get ready for the more competitive world likely to follow the pandemic. We pointed out a few truisms, I suggest you review your notes and let me know whether you ended up where you ended up in any of these. Did you have an untrained and clueless staff that you trained? Did you have any infuriating and broken systems and processes that you fixed? Did you have any creaky and unresponsive content management and translation software that you decided to get out of the way? Well, in short, echoing what's become a regularly used cliche in the space, there's a new normal, and it made sense for us to revisit, we thought you knew prepare for the future is what I suggested by by investing in the people, the process the technology that will prepare you for any future state. So with that review out of the way, let's move on to where we are now six months later, and where you should be heading next. Now, opinion about the future of the language sector is decidedly split. Even prior to the pandemic many mainstream business media and even successful players in the language services and technology sector wrote about quote, an extinction level event quite similar to their AI driven and empty polluted doomsday scenarios for many human derived services. On the other, many people inside and outside the language sector saw how language localization and cultural adaptation presented unlimited new opportunities for companies smart enough to offer the services and relevant knowledge to help them succeed in international markets. But then along came COVID-19 That substantially upset the status quo. The Coronavirus, tested everyone in just about every occupation on the planet. Let's review some data now from the supply side of the market. Here's the first challenge. Example, my proceeding in the presentation mode, Brian,

Bryan Montpetit 08:13
we can see the slides down the left hand side as well. So it's not full on presentation mode.

Don DePalma 08:17
Okay, I just noticed that. Let's see if I can. There you go. That's okay. So, back in March, we began taking the pulse of the industry at the beginning of the COVID lockdown. We did updates in June and August in the August survey CEOs of the of the largest LSP share their concerns. You can see from this graphic that uncertainty continues to be the dominant concern as it was back in March. In fact, these survey results from our August survey don't look much different from what I showed back in in the April webinar, we group their major issues into three buckets uncertainty, the concerns about how long the pandemic will last, how they can maintain stability, market demand business has been slow continues to be so forecasting is unpredictable. And then finally, importantly, they worry about employees, how can they protect the health of staff manage the balance between safety and and business constraints maintain the team ensure they won't that people can get to and from work. So when will things get back on track? The uncertainty carries over to economist epidemiologists and most people that I talk to in business, in my academic circles and with anyone who hasn't given up on science. Here's the second challenge. Then in April, I took us on a walk through macroeconomics introducing some terms such as V shaped recovery that are by now common on discussion boards. As I said back in April, based on what the epidemiologists were telling us COVID would peak and flattened at different times in each country or region. That means national economies would recover at different rates. Those scientists who are right now we have everyone's most fervent hope for recovery. The V shape recovery a quick rebound to normal. That did not happen as you might recall even some US politicians expected the American economy to be really rocking again, quote unquote by July. I guess we didn't ask them for which year maybe next year. So health experts and epidemiologists warned about a resurgence in virus cases come the fall in the northern hemisphere, which is what we're starting now, that would bring with it a new downturn in economic growth. They were overly optimistic about the resurgence. The virus peaked again in July and is being stressed again with a return to school. More recently, I ran into another model for economic and COVID recovery. While it's not very pretty of an image, it is worth factoring into your planning. I ran into across an interview with your foot Luca, President of the European Union's Chamber of Commerce in China, he expects the uncertainty to last for another couple of years. And he's not alone in that among economist, he said the recovery is not a V, it's a W, it's looking like the top of the chain saw, he said, up and down and up and down and painful all the way. Remember, he's saying this from China, which was the first into the pandemic, and the first one out of it. Since I live in what used to be a forest, the image and sound of chainsaw this time of year resonates a lot as people are trying to keep the trees from taking over their property again. In any case, economists, economies, predictive, fast expanding emerging economies, the ones that have been driving the world for the last few years won't be the global growth engine that they have been. What that means is that the more developed economies will have to carry the load of the recovery. And they may be in a better position to do so because the integration of that online component in our markets. Let's move on to the third element, continuing mergers and acquisitions, which add to the uncertainty just when you thought it was safe to go back into the water. Nearly two weeks ago, RW s the fifth largest LSP on our global one 100 list, announced it would acquire SDL, the fourth largest LSP on our list. Both are decades old fixtures of this industry, with SDL also being the purveyor of a lot of technologies by companies and competitors. What does it mean? Well, we wrote a couple of blogs and this RS R ws will certainly have its hands full integrating this acquisition, both from the services and technology perspective. But it also opens and this is really what's important about it a whole bunch of other potential activity in the marketplace. So we added another notch to uncertainties, belt. But in other sense, it's not so much uncertain, it's just unpredictable as to when something might happen. We wrote our first report on regular m&a activity, the regular systematic m&a Way back in 2000 2007. More will happen there'll be more m&a is more will happen. It's just a question of when. Now let's move on to the next section of today's session future demand and why it makes the market so interesting to so many providers. Language Services were important before the Coronavirus attack. And they're even more so now that contactless sales and sales to support contactless transactions will be bigger issues than ever. Why? Well, as I mentioned earlier, there's nothing in the Coronavirus that enables people to suddenly fluently read and converse in other languages. In fact, long after the pandemic leaves, people will still feel much more comfortable with transacting in their native language. Let's consider a few data points. According to multiple sources, the shutdown of COVID accelerated the shift to online retail in developed economies, consumers began shopping online and regularly in greater numbers and frequency. It's no surprise that when people were sheltering at home, they really didn't want to go out to stores and in some economies, they were totally prohibited from going to the store. But COVID accelerated the convenience factor that was already that had already threatening had already threatened malls, and other brick and mortar locations. Some estimates have shifted the consumer and business digital penetration of up to 10 years sooner. And this happened in just less than three months. This phenomenon, of course, will vary by country and it'll affect the more developed economies first. Those have stronger internet capabilities, stronger infrastructures, and the ability to support a high level of digital marketing, sales support and delivery. Now what does that mean for LSPs?

Bryan Montpetit 14:09
Here's me, Don, I'm sorry to interrupt you. Again. We're having Sarbat questions, if you could possibly move the Zoom top window because people are having trouble seeing the top of your slides, titles. So I bought just the one where you have the new Share polish. There we are. Thank you very much. Great appreciate it.

Don DePalma 14:29
You know, that usually goes away. Sorry about that. Not a problem for everybody and

Bryan Montpetit 14:32
will be much, much appreciated. Thank you.

Don DePalma 14:35
Okay, so as part of our continuing research into the support of global brands for international markets, what we find is a growing number of retail technology and corporate sites that support support more than the average of five languages or locales in a market that's been our number for the last few years. However, while their homepage is may show support for 15 or 20 languages, we find that most localized just a fraction of the content from their primary website an average of five to 15%. We call that the average localization depth. What that is is the number of pages in the target language versus those in the original source. Now this sparseness of information makes gaps in content pretty evident, as prospects move through the customer journey. While most LSPs don't target this opportunity today, those who are more sophisticated in digital marketing Oregon kind of explore ways to fill this enormous content gap in the customer experience. The net result is an opportunity in that most multilingual ready, most multilingual sites are not ready for this shift to online marketing fulfillment support. Because of the growing digitalization and demand for it, there's more opportunity for tech savvy and data smart LSPs to claim a bigger role in this broader digital economy. Now, here's why the depth of localization matters graphically. Throughout the customer journey we can see at various points in the journey. Sites lose a substantial percentage of people passing through the websites. Here, just four touch points show where a company can lose up to three quarters of its web traffic. These are from our 2020 Can't read won't buy consumer report the same day to hear somebody might lose leave because there's no product reviews, there's no technical support, there's no documentation in the local language. This same phenomenon is as we see in the b2b version of that report based on a separate survey sample. And it's been true every time we've run this survey in 2006 2008 2014. And now they're 2020 representative samples. At each point in the customer journey understandable content assumes a major role in conveying informational, informational and reputational context for products and brands. You can see substantial drop offs here when there's missing reviews. Now let's move on to discuss a few waypoints on the journey to self actualization. This is a bit of a dense slide here. But going back to our friend, Abraham Maslow, what he did was he first proposed his hierarchy of needs in 1943. It's widely referenced in psychology and sociology studies to classify what's called the Universal needs of society as a base along with more sophisticated acquired and developed emotions, and his model, a person has to satisfy each stage before they can move on to the next stage. Moving on from the bottom up, Maslow determined that physiological needs for things like food, excuse me, food, water, clothing, sleep, were very basic and shelter just preceded all others. Without them, you couldn't achieve this next level of safety and security, which was characterized by things like having a family and social stability, being employed, having property having your health. Once that was there, you felt comfortable, your physical and daily sustenance, needs were taken care of that was a roof over your head, then you went for love and belonging here, friendship, family intimacy, all of the things that make life worth living. Then once you do that, of course, you want to have a better family, you want to have a better shelter, you want to have a better job than somebody else. Because these were things that went to your own self esteem, building your confidence, showing achievements in the form of how you live, what you lived on, and so forth. And then importantly, with was this level of really a higher state of being, morality, creativity, spontaneity, acceptance, the things that made you a good human being, and turned you into something that in the 1940s was probably more important than it happens to be today. So what does this have to do with LSPs? Well, when I was working at our research earlier this year on the future of language services, it occurred to me that service providers work their way through a very similar kind of project progression. And the very core the basic language services that they have to offer on a reproducible basis. With consistency and quality. In each instance of everything they do. There has to be that operational reliability, consistency and data integrity, a level two, really, data and human relationship level. Here, it's about establishing a mutually beneficial relationship with a client, where that could mean a long term contract, most favored supplier status, special services or some other business relationship that ensures continuing stability. The LSP also becomes more conversant with a client's brand with the content and the data. And they're both better able to leverage content, data and other tools to improve that relationship moving forward. Now, once the relationship is established, the LSP is in a position to offer much more specialized services based on their capabilities in the client's field. And at the pinnacle, the LSP may become what I think of yours nm LSP that is a content, global content, strategies, strategies, or content provider. Now, those are the things that we've seen here, the observations on this on the evolution of LSPs are here really showing what we've seen as how they would become avoid becoming a commodity service provider. We also have a much more data driven model in the form of the LSP metrics. But I like the Maslow approach, which is more observational, and really focuses on the things that are conceptually important as somebody moves forward. So let's look at a few of these levels. The first two steps, the basic language services and sustained reproducibility, it's really about delivering on the basics and ensuring that you can actually see you have a business. So we see here is language traditionalists. These are the they do things that have always been done in the way they've been done their ideas, and translation is an important function. There's ways to do it, you want people doing that work, it's one of the oldest professions, they use minimal technology, process management may be weak, because there's a lot in the heads of the individuals. Now, the companies at this stage, they're really, there's a lot of them out there, they they've been doing the same thing for in some cases, decades, they can't easily capitalize on new opportunities and markets, what they do is a move from one challenge to the next. What we see next is process re engineers, these individuals, these companies, are moving towards improving their differentiation in a few ways by being more consistent, more reliable, having better quality. And in order to make that happen, putting in place, the technology, the workflows, the processes, and training to ensure that this happens in a lot of cases. And this is actually something that's important for every LSP for that matter, every language localization group inside an enterprise, they've got the difficult process of reinventing themselves on a regular basis as technology changes. They're going to have to continue doing this over time. So these two are the basics that we see everybody going through at some point there's been a traditionalism inside an organization, you've outgrown that process reengineering for every organization, periodically, they step back and decide, okay, we have to move forward with this. This information. With a new technology that's available, it's basically business process reengineering writ large. The next step up are the data scientists. The average LSP pushes enormous volumes of words through translation workflows, or through their interpreting systems. As their teams analyze data and workflows. They identify areas where they can employ data driven compute intensive technology, to better optimizer, or to further optimize their operations. Now, typical LSPs will have many humans doing low value but unnecessary, simple, predictive, repetitive, things that a machine could do faster or better. They'll determine which tasks could be automated, for example, systemize systematizing, Project intake, which language is this? Identifying a domain, which vertical is this? And what's the workflow I'm gonna need for this type of content when they can automate these simple and repetitive tasks. These data scientists can redirect those labor costs to higher value functions, where sentient human beings bring benefit. Now, there's a few other areas where data science comes in handy language delivery via data driven hybridization of human and machine translation, smart asset management and data driven categorization and leverage, where the machine automatically put stuff in the right bucket helps the translator helps the Project Manager helps the proofreader along the way. Now, how does all this happen? Well, it requires seeing data as an asset that can be utilized. Let's look at it a bit in a bit more detail. We characterize the leverage and optimizations that LSPs can realize as small AI, small artificial intelligence, it requires the combination of investment that is from free cash flow, the money that's left over after paying for salaries, expenses, heat, light heating, all that stuff. And importantly, all the source content flowing through the workflows that cash funds the data science platform. For most LSPs that's going to be machine learning software such as Google's auto ml or Microsoft's is or machine learning studio. The data though, will be their own. Now, every data smart LSP should be able to do dozens or hundreds of what we characterize it as conveniences and optimizations based on the data flowing through their system. This can be things like expanding abbreviations, correcting punctuations, identifying genders really important for language is like Russian extracting terminology, corpus alignment, tag handling, and many other examples of non productive overhead that LSPs that we've talked about could imagine taking individually. None of these are revolutionary. But they combined to make translation and its project management much more efficient than it is with just humans. Now, every day to smart moving up the pyramid here, we find LSPs. Transitioning from a basic role as a business process outsourcer that is a BPO for translation and interpreting into a more sophisticated specialist in one or more related industries or disciplines. They'll heavily focus attention and investment in the areas that could prevail propel them from being an outsourcer of simple language services to a strong position. It's a knowledge process outsourcer in some specialized aspects of business globalization, it's more profitable than is viewed as more essential, or there's growing faster than basic language services. For example, an LSP could create a KPI or specialized offering around a vertical industry around a service or a content type. And where it has demonstrable expertise in success, for example, international legal compliance, it could build on its capabilities around process governance, supporting software and analyzing and monitoring conformity with laws and every locale they operate in the this kpl could offer advanced content services such as analytics, digital marketing support, sentiment analysis, content marketing, social media management, compliance, or a variety of telco services, they could provide or add natural language processing, and understanding services for the languages and locales. Now, let's close with the most aspirational path for an LSP. The move to a full service global content strategist. These next generation providers, they have to have demonstrable expertise in actively managing content and related services for sophisticated knowledge domains for processing complex workflows, and delivering on business critical requirements. On this slide, I listed a few of the two pages of capabilities that we had in the future of language services and strategists could offer. We've suggested dozens of other functions in areas such as specialized Translation and Interpreting Services, linguistic asset management of both source and target, machine learning supply chain enhancements, global app development and delivery, analytics and KPIs and business strategy. Much of this activity deals with enterprise content strategy that's beyond localization. But like I said, this is the most aspirational path to becoming a company that supports the global content scrap strategy requires a major investment in reimagining and reorganizing the business. In order to compete with a consultancies and professional services organizations that are intent on doing the same. It requires thought leadership, clear differentiation from rival LSPs, and K POS, and enterprise competitors, and the transformation of a service focus to Salesforce to sell a broader array of global content solutions. So conclusion here after running through those five, there's a few things that companies can do LSPs can do to self actualize into a more valuable role, and in the process, become less prone to becoming a commodity. So what should you take away from the last 20 minutes or so this message of self actualization, aspiring LSPs have to break out from the pack of translation interpret interpreting providers, we recommend that a few passed and not becoming a commodity and a growingly data centric economy that value specialized knowledge. Let's set the bar high for the next load front, front load from home in the fall, review the journey to self actualization. Rather than spring pick your journey to self actualization and pick your destination. In summary, we can say here that the Ne Plus Ultra This is the aspirational role. It's that global content strategist that requires major investment in marketing and sales and technology. We've got a traditionally BPO function, that LSP should be elevating to a knowledge process outsourcing and much more valuable role inside a company and one that's much stickier in terms of just having language alone. Data science is a key enabler for any LSP that has access to a rich and reliable data flow, which is just about every LSP on the planet. Any LSP regardless of where they are in this continuum, has to periodically undergo business process reengineering to move forward. And, importantly here, while St. Jerome might be proud of them, traditionalist LSPs are most at risk in this scenario, if they didn't move up to those levels of data Science and, and more knowledge about climate operations and allow them to differentiate. So with that, that's the end of my remarks. I do have one note here, that in a week, Igor from SmartCAT. And I will be on a conversation online, no slides, where we'll be talking about achieving better ROI with business data and continuous localization. I look forward to sitting down with Igor next week. And with that, I stopped. Here's a few reports that I referenced in today's presentation. And I'll leave it at that for any questions you might have.

Bryan Montpetit 30:36
Thank you, Don. That was, that was great. I really appreciate you taking the time to go through all that material. We did have a question come in, it was more towards the beginning of the presentation. But nonetheless, I'll read it through. So it says Don, given the increased level of competition, should we expect a K shaped recovery in the language industry, with some larger players recovering and other smaller ones struggling to survive?

Don DePalma 30:59
That's a really good question. And it's going to depend on what the offering of that company is. For example, in certain areas, we've already seen, for example, Travel and Leisure get hammered over the course of the last six months, they're not going to be one of the ones at the top arm of the K, they're probably still going to be at the lower arm of the K if the Department of Transportation data for worldwide travel is any indication. However, retail is another story. We've seen substantial uptick, sign everything from Shopify to Amazon, and, and everything in between. So as that sector, anyone who has capabilities on that front, with more customer experience analytics, built in with the ability to deal with the languages that matter and having the appropriate term basis and teams that are trained, empty, it's certainly a way that they may be at the top arm of that. Okay.

Bryan Montpetit 31:57
Great, thank you. Thank you for that. And another question. Just relatively quickly, have you noticed a lot of the, I guess you can say the the traditional language service companies shift their their model to service the those industries that you just mentioned, for example, the E commerce, the E Learning type of industries, Have you have you noticed that that trend?

Don DePalma 32:18
Well, you certainly seen for the companies that already supported them, that they've shifted more of their resources, and more, they're selling over to that front as well as you know, all of the production assets behind it, to quote an old saying from Scott McNealy, the older folks and you put all your wood behind one arrow. And so if one of the arrows is broken, you move on to the others. And we've definitely seen companies, increasing their presence increasing their calls on on those other on the markets that are doing well.

Bryan Montpetit 32:52
Great. Well, thank thank you for that. There are no other questions. So I mean, I again, thank you for the the insight I always, like I say, I always enjoy your presentations, all the information coming from CSA. I appreciated the fact as well, that you indicated that you're going to be doing the joint webinar with with Igor, that one is going to be definitely interesting to listen to. So with that said, Thank you, Don. I would suggest as well, if you have a moment just pop into the community. I'm sure people are going to have questions for you there. May comments and if we can ensure that we have your presentation, look from home staff will make sure that we get it out to everybody.

Don DePalma 33:32
I'll make sure you get it. I'll stick around for a little while.

Bryan Montpetit 33:35
Perfect. Thank you very much. Have a great day. Take care