The localization industry can look forward to opportunities as well as challenges in its encounters with a new generation of Web firms. This new breed of Web consultants, which I will call e-transformation firms, incorporates business strategy and creative and engineering expertise in a single business-to-business service, delivered within a unified project structure.

Adding business strategy to traditional design-and-build capabilities allows these firms to address the most critical need in business today: e-transformation. Whether the client is General Electric Company or a freshly minted “dot.com”, e-transformation is the process of rethinking and remaking a company’s basic operations—all of them—so that the company is oriented fundamentally to take advantage of the e-business model.

In November 1999, The Industry Standard listed Agency.com, AppNet, iXL, Razorfish, Scient, USWeb/CKS, and Viant as Web shops that have successfully added broad consulting services to their offerings, integrating strategy, creative and engineering as a single package. Market demand for these services is extreme, and the formation of e-transformation companies is being driven by the need to streamline these projects and bring e-business initiatives to market faster.

For e-transformation firms, there is a continuing evolution of the knowledge, skills and infrastructure required to deliver such an integrated service. Web consultants are now recognizing internationalization and localization as critical success factors for top-tier clients. Significantly, these clients often insist on internationalization and localization services as fully integrated components of the unified project structure already established for e-transformation.

This article describes how e-transformation companies work, where localization fits in the delivery of their service mix, and why localization companies should pay close attention.

Some History

A brief, historical diversion will underscore the market’s new appreciation for localization.

In 1995, when a group at International Communications, Inc. (now INT’L.com, part of Lionbridge) set out to build the company’s Web site in five European and Asian languages, we searched for precedents and could not find a single corporate site navigable in more than one language. “There were university sites with miscellaneous content in a variety of languages, but there was no attempt at multilingual information architecture,” recalls Natasha Stavisky. The instigator and coder of the original INT’L.com project, Stavisky is now a Senior Web Developer at Applix, an e-business solutions software developer. “We found we had to create a new notion: multilingual navigation.” When the site launched in early 1996, a handful of other innovators were already building multilingual sites.

In 1997, when I helped INT’L.com launch its Webstream & Interactive services, few companies could take time and resources away from their single-language site development to address global customers. The prevailing attitude held that building and maintaining a company’s core site was already overtaxing corporate resources, and that adding the complexity of multilingual content would only slow the project down and allow competitors to get ahead. The commercial value of the Internet was fundamentally perceived as tied to the US market.

Today, those attitudes have all but disappeared, which makes sense when you look at the dynamics of Internet growth and the general trend of market globalization. Two factors are driving the inevitable increase of multilingual content in communications and commerce:

1. The increasing percentage of Internet users in non-English speaking markets, a trend which will continue to accelerate.
2. The increasing globalization of commerce generally, which is in turn driven by revenue, growth, and scale requirements in highly competitive segments.

1999 was the last year in which US volume accounted for 50 percent or more of all Internet traffic. English speaking markets still outpace non-English speaking markets, but not for long.

Knowledge, Skills and Infrastructure

The premise behind integrating the services required for e-transformation is that—given “the need for speed”— business strategy, creative design, and technology implementation are most effectively managed within a single account and project management structure. This is different from the prevalent approach of the recent past, when the assumed model was strategy from a consulting firm, creative from your ad agency, and development from a Web shop or systems integrator. This so-called bestof- breed approach is still common, but quickly losing ground. With so many parties involved, there is inevitable friction in approach, scheduling, and direction, leading to missed opportunities, delays, and overruns.

To address the needs of clients, e-transformation companies have completed the circle by offering business consulting, interactive design, and technology implementations under a single contract, in a project run by a single management team.

To better understand how these firms work, let me detail the kinds of knowledge, skills and infrastructure required to effectively address e-transformation challenges for client companies. This list is neither exhaustive nor universal, but it is representative of the breadth of competencies involved.

Without industry knowledge, e-business consulting falls short of the mark. e-transformation firms must have teams of strategists with in-depth knowledge of the vertical industry of each client. The creative and engineering teams also require deep, specialized knowledge in many areas.

The firm must also maintain a variety of organizationlevel skills. These are sets of practices formalized within the business culture that allow the firm to rapidly hire and adroitly train new employees in that skill area.

Finally, the firm’s infrastructure must include a large stable of consultants who are able to travel or otherwise respond rapidly; graphic, sound and video production centers, ad-buying capability and media relationships; Unix, Linux and NT environments, numerous application server configurations, scalable bandwidth, and hosting relationships.

However, these resource requirements are not yet suf- ficient for global e-transformation services. E-business globalization consulting, internationalization/double-byte code support, and multilingual content production add additional resource requirements not factored into the above charts.

For the strategy teams, additional requirements include knowledge areas such as country-specific cultural and business norms, international regulations and privacy issues. E-transformation firms must develop new organization- level skills, including language management and international campaign management. Additional infrastructure is required to support consultants internationally. New corporate partnerships are required to quickly address client needs for regulatory compliance, multicurrency settlement and global fulfillment.

Similarly, e-transformation creative teams must now add knowledge of global branding and content creation, as well as skills in multicultural design; translation, cultural adaptation and local content sourcing; and multilingual information architecture. Finally, they must create studio and media relationships in all regions.

To add localization competencies, the engineering group must gain knowledge of global content architecture and workflow, develop skills in internationalization, doublebyte code support, and multilingual quality assurance, and build infrastructure that includes locale and languagespecific operating configurations for both testing and QA.

The notion of a single firm that can artfully coordinate all these people, processes, places and partnerships is immediately suspect. And yet, the market demand is increasing for swift execution of these complex, global initiatives under a single contract, with a unified project structure.

Recommendation—Partner for Success

How do these market demands impact localization firms? How can translation and internationalization companies capitalize on e-transformation opportunities, and what’s the risk of staying aloof?

Much of the additional knowledge, skills and infrastructure needed by e-transformation firms can be found within the localization industry. However, there are a number of options for bringing these competencies into global engagements on behalf of clients. Let’s look at the obvious ones.

1. E-transformation firms can hire knowledgeable and highly skilled staff in any or all of these disciplines. Headhunters have been targeting localization firms since before the Web was invented.
2. E-transformation firms can build strategic alliances with localization industry firms. iXL, for instance, is diligently pursuing this option.
3. E-transformation firms can engage in mergers and acquisitions with localization industry firms. Just a matter of time?

E-transformation firms have already begun the search to find employees who can bring with them globalization “thought capital” and localization training. However, hiring will not suffice to transfer all the needed competencies that localization companies have to offer. Organizationlevel skill sets will drive partnerships, while—as I see it—infrastructure requirements will ultimately lead to mergers and acquisitions.

The opportunities for a localization firm, it seems to me, initially lie in the area of partnerships and formal alliances. You must demonstrate that you can integrate your services seamlessly with those of the e-transformation firms—so seamlessly that clients won’t have objections around multiple contracts, or multiple account and project management structures.

Localization firms should concentrate on organizationlevel skills that e-transformation firms will find it hard to duplicate in-house:

• Translation Quality: as an organization, you have the know-how to certify translation quality.
• Localization Cost: you can hire entry-level workers and quickly train them to be highly productive localization specialists.
• International Scalability: you have an existing network of international resources.
• Global Process: you understand how to deliver complex, multilingual technology projects.

In the near to mid-term, localization companies making this effort to understand and work closely with e-transformation firms will expand the localization industry’s size and impact. This will benefit you, it will benefit e-transformation firms, and it will benefit our mutual clients. In the long run, such partnerships will also build the familiarity and relationships required for cross-industry transactions.

	Hiring (knowledge)	Partnering (skills)	M&A (infrastructure)
Strategy	Country-specific cultural and business analysis; international regulatory and privacy issues	Language management; international campaign management	Consultants available internationally; multicurrency payments and global fulfillment partner relationships
Creative Global branding; global content creation	Multicultural design; translation, cultural adaptation and local content sourcing; multilingual information architecture	Studios and media relationships in all regions
Engineering	Global content architecture and workflow	Internationalization and double-byte code support; multilingual QA	Locale and language-specific operating systems configurations for testing and QA; global hosting

Table 1. How e-transformation firms will acquire localization capabilities This table outlines the progression from hiring to partnering to M&A. Each step in the progression nets additional benefits for the e-transformation firm. These benefits increase the firm’s ability to satisfy client requirements.

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Benjamin B. Sargent
Senior Manager
Globalization/Localization Strategy Practice
IXL Inc.
Athenaeum House
215 First Street
Cambridge, Massachusetts 02142
USA
Tel.: +1 (617) 577 - 3338
Fax: +1 (617) 225 - 0902
Mobile: +1 (617) 901 - 5195
E-mail: bsargent@ixl.com