Localization is a business that encounters exchange risk, since multiple currencies are often involved and exchange rates vary constantly. This risk can translate into a loss of income for one party that equals a gain for the other party. As the transaction value increases, the importance of paying attention to exchange risk becomes more obvious and more important. Small- and medium-sized enterprises often resist establishing an exchange risk strategy because they are unsure exactly how to do it. In this article, Jack Yang, Strategy Analyst for Transco, outlines the basic steps to be taken and describes concrete strategies to be implemented to equalize the risk between both buyers and sellers of localization services.

Editor’s Note: For a previous article by Transco on adapting the Balanced Scorecard Model for a language services setting. Read BSC as a Strategic Management Tool for the Language Services Industry.