Managed Services: An Emerging Translations Trend

I recently sat down with Michel Lopez, the CEO of e2f, to discuss an emerging trend in the language services industry: managed services.

Peter Corless (PC): e2f is now offering managed services. What are they, and why is it important to know about this trend?

Michel Lopez (ML): The traditional model of the language services industry is an outsourced, offsite vendor model, where the client sends trials to localization companies around the world, and the vendor sends files back. More and more, especially in the gaming and tech industry, clients are requesting translators and editors, testers, as well as project managers, work onsite at the client’s location. At first this was just individual contract employment, but now the entire department is being outsourced, yet still remaining on-site.

PC: What’s driving this trend? Why is it good for companies?

ML: There is, and always will be, pressure at companies to keep headcount as low and productive as possible. That’s a primary driver of outsourcing. Yet there is also the need to keep your localization team close to your product development and marketing staff as possible, especially in this era of agile and continuous rollouts. They want to keep everything within their own walls for communications with core staff.

PC: Why are language services considered a primary target for outsourced management?

ML: Increasingly, there is the desire for companies to focus exclusively on their core competencies, outsourcing anything not seen as directly related to that. These companies do not see linguistics as their core competency. They want to focus on their product, on their clients, but not on the linguistics. So managers turn to language services companies so they don’t have to recruit or manage people working in languages they do not speak themselves.

PC: How do managed services differ from traditional contract staffing?

ML: Instead of staffing individual positions or even groups of contractors, we are seeing more and more outsourcing of entire departments, including the team management. All the people on site report to the project manager, who works for the managed services provider. By relying on an external service provider partner, these people are not employees of the main company. They are employees of the managed services provider.

PC: So what functions are being outsourced?

ML: What I see in the Bay Area, the whole localization department, the localization testing department, localization engineering, even global marcom teams, are being completely outsourced. This is a trend we see not only in localization, but also in software development overall. Anything they consider “non-core” software may be outsourced. Such as customer and technical support functions. Those also have multilingual requirements as well, for global customer bases.

PC: So what isn’t outsourced? What do companies still keep in their ownership?

ML: What remains under control of the company is the original software development, content creation and production. They also maintain everyday control over the quality of the outsourced department’s efforts, working with regional offices and stakeholders for local language and market acceptability.

PC: Can you give an example how this is affecting Silicon Valley?

ML: A large Bay Area tech giant is constantly optimizing their application for global audiences in a broad number of languages. They have a very large group of people working on that. They recently decided to take all of the individual contractors they had brought in and put them under a managed services provider.

PC: What are other drivers of the managed services trend?

ML: First, financial reasons. It is always beneficial for Wall Street to have a minimal headcount, and to see the localization services as an expense. Second, legal exposure. There’s been a crackdown on contractors per se. Especially on “joint employment” situations. So companies do not want to hire individual contractors. They can be confused for employees. But if they are full-time employees of a managed services company, and they have benefits, and there’s a clearer standing on a legal basis.

PC: How does e2f plan to respond to this new trend?

ML: e2f has been providing staffing solutions for years in the San Francisco Bay Area. Last year we also took on staffing for a client in Europe. So it is a natural evolution for us. One of e2f’s strengths has always been its adaptability. We work with our clients in the way they prefer. So we’re always actively listening to our major clients to understand their strategies. If they wish to maintain a typical vendor-client relation, or a traditional staffing model, of course we can do that. If instead they are looking for managed services for linguistics, we’re ready to meet their needs.

PC: How about “insourcing?” Don’t companies have multilingual employees?

ML: As a U.S. company, yes, you may have a few multilingual employees, but they are not professional linguists. You might not find out about quality problems until your go-live date, or even one to six months later as you get consumer feedback.

PC: What about traditional temp agencies?

ML:Though they might be able to find someone with a matching resume, they cannot necessary validate linguistic skills. Whereas working with a language service provider, they can assess the linguistic quality of hires immediately. Plus, since they are managing the whole process, they also ensure quality of the end product. That’s part of their core competencies, which you don’t get from traditional staffing agencies.

To learn more about e2f’s multilingual managed services, or to share your own perspectives on the trend of managed services, email [email protected].