This is an extract from the article, written by Jean-Luc Saillard, COO at Smartcat, for Multilingual magazine, the leading source of information for the language industry and businesses with global communications needs. You can read the entire article here.


As more industries are affected by a move toward a shared economy model, let us explore what impact this model could have on the localization industry.

Disintermediation: Elimination (by the online sources) of the traditional middleman, the intermediary between the seller and the buyer (such as an agent, broker, or reseller), or between the source and the recipient of information (such as an agency, official, or gate keeper).

What is the impetus behind this movement? There are many factors at play.

  • Financial. The possibility of earning extra income from existing assets is one of the factors.
  • A need to use the resources that we already have.
  • The need for more personable or customized solutions to our problems.

Even though labor in localization has historically been provided for the most part by independent contractors, the industry itself has been largely intermediated. Most of the localization services sold today are through a localization service provider (LSP). Furthermore, many translation tasks are assigned by the very largest LSPs to single language vendors (SLV) who add to the level in intermediation. The translation tasks not provided by LSPs (or SLVs) are mostly done internally by large organizations that have their own translation departments.

What are the factors behind the current situation?

This process will affect both buyers and LSPs. Interestingly enough, some of these factors affect the potential buyers of translation services as well as the smaller language vendors who, given the proper set of tools, could be beneficiaries of the process of disintermediation.

Lack of understanding. The biggest factor here is probably the lack of general understanding of what the localization process entails. For many potential users, that process is just an afterthought for any of the work that they perform, and they generally are not interested in finding out more.

Translator selection. This is a factor impeding the potential growth of many SLVs. Many of them lack the resources and tools to put together the translation teams that are required for the processing of more complex projects. And they certainly do not have the resources to maintain and monitor that larger pool of translators.

Translation tools. Translation tools used are generally complicated to use without the appropriate training and the licensing schemes make adoption potentially expensive especially when dealing with intermittent projects. Localization buyers will generally shy away from making large investments in translation technology.

IT infrastructure. No matter what technology choices the user makes, changes will need to be made to the existing hardware. Similar to the case for translation tools, the costs are generally too high except for the largest localization vendors and buyers, leaving the rest of the industry to deal with less comprehensive solutions and forcing increased intermediation in the process.

These factors are, for the most part, not present in the other businesses moving to a more disintermediated model.

The possible roadblocks to intermediation have now been identified. Then, what is the driving the demand for this model in the localization industry?

  • Customers are looking for more customized solutions.
  • Smaller localization vendors are also driving the demand for the tools behind that model. The access to process automation, resources management, payment processing, community engagement, and real-time collaborative features will continue to drive the demand for more customized solutions higher.
  • By removing an intermediary in the process, costs are being driven down. The customer can access thousands of vendors offering their services at various price points.

A solution where intermediaries are removed will generally allow for faster processes, especially with a cloud-based multi-user application, which also reduces the complexity of the process.

With centralized linguistic resources, project management features and the basis of a vendor management solution, a cloud-based system can be the answer to many potential clients.

What are possible factors slowing down the generalized adoption of a cloud-based solution?

  • Security will always be an issue when documents are in a cloud environment. The overall safety of the information in the cloud is much better than in a desktop-only environment where the data is only as secure as the latest backup.
  • Connection issues is not an issue of great concern for most companies, as most of us take a broadband connection, in widespread use around the world.
  • Integration with existing models. The translation industry has been adopting interchange format over the years. Therefore, we have solutions in most cases, either for translation memories or for terminology.
  • Some complex localization projects requiring many localization engineering tasks, such as software engineering, testing, desktop publishing, among others, might not be the perfect environment for a cloud-based system. In no industry can there be a perfect solution to all problems, and the localization industry is no different.

As in other industries, the localization process is entering a new era of disintermediation. We are now closer to a time when many potential localization clients will be able to build closer relationships with the people producing the final output.

Does this mean an end to the current localization process? Probably not. This new model is hardly a zero-sum game. There will be some losers, but mostly winners. Customers will benefit from lower costs and a more customized experience while smaller localization vendors will be able to expand their offerings to compete against their larger companies. Freelancers will also gain new outlets for their services. All in all, disintermediation is a win-win strategy for everyone involved in the localization process.

The article was originally posted in December issue of Multilingual magazine.