![[© 2010 • ISSN 1420-3693 • www.localization.org]](/globalizationinsider/images/masthead2.gif)
|
In this issue…
The Cost-effectiveness of Today’s Localisation Business
The keynote address at the 1996 LISA Forum USA “The Localisation Value Chain: What to do and Where to do it!”, held at the Four Seasons Hotel in Newport Beach, California, was given by David Brooks, Microsoft's Director of International Product Strategy. His address was ranked first among all presentations, scoring a high 94.8% number one Presentation Rating (statistics taken from the Forum Evaluations returned by participants). David Murdock of Disney Interactive ranked second at 92.8%, and scored the number one 97.1% Presenter Rating. 92% of participants thought that the LA Forum met their expectations and 94% expressed satisfaction with the workshops and panel formats. 98% thought that they would participate in a future LISA Forum. The text given below is a slightly expanded and corrected version of the summary distributed after the Forum. Many thanks to Alex McDonnell, Day Co-Chair on the first day of the Forum, for his thoughtful and accurate comments resulting in a number of revisions, in particular to the record of the discussion of efficiency and effectiveness. David started by introducing the key topics of his presentation:
He then gave a brief overview of his own career. Prior to Microsoft (where he has been for six years), he worked for KPMG Peat Marwick's Strategic Consulting Services and for the Ford Motor Company, where he was involved in International Automotive Operations. He has spent his entire career in international business, and it became clear during his talk that he has been successful in adapting methodologies and concepts in other industries to the specific requirements of the software localisation business. He outlined Microsoft's localisation strategy. Firstly, this involves building global functionality into the US base product, e.g. support for non-ANSI character sets. Microsoft also develops adaptable, modular features for its systems and applications to facilitate the localisation process. The products are adapted to meet market requirements, not merely in terms of language, but also of content. He gave the example of Encarta, which contains not only localised features, but also content specifically commissioned for the various target markets. The product portfolio is also tailored to market requirements, and this also extends to the level of localisation for a particular market. As an example, he explained that technical products are not localised for Sweden due to the high level of English in that country. In Japan, on the other hand, the opposite is the case, with Microsoft forced to implement full localisation of technical products in addition to applications/multimedia. Finally, Microsoft also has a policy of investing in emerging markets, even where no return is expected for some time to come. The example he cited in this respect was Vietnam. David then moved on to present Microsoft's Global Development Guidelines. It is worth reproducing these in full:
One of the factors evident from this list is Microsoft's determination to separate out purely language and content localisation from the engineering and testing functions. David then described the work activities involved in the "localisation" process: Globalization, Adaptation and Localisation. He mentioned that he had attended a meeting with Bill Gates only a few days before, during which it had finally been possible to persuade him that localisation is not merely a linguistic process, and that the language-related element is only one of several components. Globalization means enabling the software for subsequent adaptation and localisation, for instance building-in support for non-ANSI codepages. It is increasingly implemented using generic tools and test suites. Adaptation involves the design of specific features and content for individual languages and/or markets. David noted that content will increasingly vary between markets/languages and that it represents a significant cost hurdle. There are three elements in the Localisation component: translation, graphics/DTP and build and release. Software localisation is the greatest factor, and is out of all proportion to the actual number of words to be translated. This phenomenon will have a growing impact on the localisation value chain. David then presented pie charts showing the development in localisation cost component ratios at Microsoft. David pointed out that the adaptation and globalization costs were those incurred in the localisation community, not in the development process. Overall, the charts showed that the proportion of costs involving translation are lower than expected and decreasing. Even Microsoft had been unaware that engineering and testing costs were higher than those for translation. Q. Cynthia Baldacchini, Hewlett-Packard: What do you mean by testing in this context? A. Build and release. Describing the Localisation Process Objectives, he said that the "localisation machine" did not refer to a particular software system, but more to an efficient, automated process. Microsoft is particularly concerned about vendor capacities and their abilities to meet the client's needs. This demands stable and durable relationships with vendors. Microsoft is looking for low-overhead business arrangements: at present, the level of overheads is quite unclear and more transparency is needed in this area. Although Microsoft is aiming to increase localisation effectiveness, a particular problem centers around efficiency. With Windows/Office 95, Microsoft shipped the largest ever number of products with hardly a hitch. However, this process, although effective in that most targets were met, was not necessarily very cost-efficient . David then presented an "Efficiency Metric" slide. This is a ratio for comparing the actual cost of localisation with a benchmark cost, the benchmark being the multiplication of the words in the application by the word rate(s) charged by the vendor. The figures shown are purely nominal. At present, the actual cost is often a substantial multiple of the benchmark cost. The ultimate aim, of course, is to achieve a ratio of 1 to 1. This was followed by a brief localisation cost study. The typical project cost is many times greater than the benchmark. Key cost drivers include deficits in the US code as against the global development guidelines; extension of the project cycle and repeated updates; country-specific features; the build and release process; and non-automated test suites. Reworking, the level of graphics and project management are the factors driving doc and help costs. Real simship is a substantial cost multiplier. In the case of Office 95, hundreds of different releases were implemented. Although build and release was not seen as a major problem, translation and localisation costs were wholly unrelated to the number of words. Costs were closest to the benchmark for help, but extensions to the project cycle were a major cost factor. David then went on to define the concept of cost-effectiveness. This is not the lowest cost for all components, but rather maximum efficiency, avoidance of redundancy and the best possible time to market. He then presented a slide comparing efficient with inefficient localisation processes, as seen by Microsoft. Particular attention should be paid to the criteria for sourcing, business arrangements, tools, terminology/DTP, project management, quality process and attitude. The localisation industry can also learn from other industries. David drew attention to an article on the Chrysler Corp. in the latest issue of the Harvard Business Review illustrating how Chrysler restructured its supplier relationships during the auto industry slump in the USA to achieve massive cost reductions. Activity-based costing models developed in the electronics industry could be adopted by publishers to establish exactly what they are spending their money on. He also mentioned the "Breadman" model from the food retailing sector, where a supplier is responsible for restocking and QA without the need for expensive and time-consuming multiple quality control procedures (in many ways similar to JIT). Finally, he described how a modular approach using a vocabulary of re-usable design components is employed in the architectural services sector. He compared Microsoft's "Ideal Vendor" with today's realities and went on to describe "What it takes to be a Microsoft vendor". These qualities are surely applicable on a global basis. Although a "thick skin" is one of the key criteria, Microsoft views consistency of quality as one of the most difficult problems. On the question of who covers additional cost creep in a project, he said that Microsoft tries to take care of additional costs "as best we can". David rounded off his presentation by sharing his views on "Localisation 2000". The need to market products on a global basis will see an exponential increase in the quantity of work. Manual translation will be replaced by TM and MT, with shared terminology databases and human post-editing. Microsoft is already altering its payment arrangements to reflect increasing automation. The process will also be driven by automated terminology databases. The focus will be on industry-standard terminology with a high degree of re-usability and phrase recurrence. Microsoft will increase the degree of re-usability even further. Pure translation will increasingly become a minor component of the localisation process, which will focus on globalization and adaptation. There will be consolidation in the localisation industry, which will be dominated by a small number of vendors. Project cycles will be measured in days (if not hours) with Web simship the standard model (already achieved for MS Explorer). Where content products are concerned, there will be almost no time for localisation. Q. Kristen Murphy, Macromedia: Has Microsoft ever considered in-house localisation? A. In fact Microsoft is moving in the opposite direction, and is now outsourcing to doc and help localisation vendors. In addition, some software is being outsourced. Q. Finbarr Power, ITP, said that there would be significant changes in the future. He asked what the impact of MT and localisation into minor languages would be on Microsoft's strategy. A. Microsoft will localise more products into more languages. New technologies will change the cost/capacity equation, and will in turn allow Microsoft to ship more localised products. Q. John Parsons, Berlitz: Will there be improvements in software functionality? A. Yes, in general, but not necessarily specifically. There will not be much in the way of new technological developments to make localisation more efficient. Q. Jaap van der Meer, Alpnet, talked of the future of localisation. He suggested that Microsoft should step out of the process and leave the complete documentation management on the Web to external suppliers. This would be paid for by the end-users. In effect, there would be "franchises" for providing help functions. A. Microsoft would like to reduce its involvement in doc/help, but charging for help is a paradigm which would have to be examined much more closely. Q. Oscar Chu, Nortel: Is the cost of localisation allocated to sales or product costs? A. Product costs (R&D). Edouard Prisse, Word House, welcomed David Brooks' comments. They speak the same language and have the same objectives. David said that Microsoft will rely on vendors to help make the localisation process more efficient. Summing up, Alex McDonnell thanked David Brooks and expressed his surprise at the reaction of the audience: not so much the questions which were asked, but rather those which weren't asked, considering that the picture David was painting would have a radical impact on the entire localisation industry. David Brooks
|
|
LISA Business Data Forum Summaries and Presentations LISA Globalization Consulting Network Webinars and TouchPoint Advisory Calls 
LISA Forum USA LISA@Chinasoft Fair LISA Forum Asia LISA Forum Europe LISA Forum India Open Standards • TBX • TMX |