LISA China Focus 2009, held in Beijing a few weeks ago, provides ample proof for anyone who may still be wondering:

1. Convergence ...

... in the sense that globalization services are converging with software product development as R&D services are virtualized. More and more globalization services are becoming available in the cloud through software as a service.

... and in the sense that hardware, software and services are converging to meet customer expectations, especially in Asia. The sanzai phone sector (highly personalized and customized phones) are just one example of this trend. The internet is now the platform for this convergence, and all that matters is the customer experience - by 2015, it is projected that the 2 billion people connected to the internet will be dwarfed by the 1 trillion devices that will be interconnected through it.

Our globalization services now are not so much about translation or testing services anymore. They are more and more about meeting the business-driven objectives for customers. As such, it has become much easier to integrate them with other software outsourcing services.

Smaller providers must seize their role in the new ecosystem

The supply chain for globalization services, whether you’re talking about translation, localization, international engineering or testing, is being virtualized. Smaller providers must seize their role in the new ecosystem through maintaining and clearly communicating their domain expertise to all who will listen, at the same time that they partner with the right people in their targeted geographies in order to maintain their presence. This may mean partnering with Chinese or Indian outsourcers who are looking downstream for more opportunities to enhance their global R&D services. China, in particular, is very focused on increasing its share of the US$ 230 billion software outsourcing business, and globalization services are being targeted as a growth area by all of the major players (see 360 Degree Global Product Delivery).

At the individual resource level, the technology now exists through the larger service providers for anyone (truly) to easily reach and manage whatever sector of the global, multilingual workforce that they choose to target. In this author’s opinion, it is high time that we really focus on how to engage, train and nurture those with linguistic skills and domain expertise who we so desperately need for MT post-editing, international search, managed crowdsourcing, etc. Think mobile phone users in E. Africa, for example (see Crowdsourcing: The Crowd Wants to Help You Reach New Markets).

2. The seismic shift to Asia for consumption

The shift in consumption from one geographical region to another is unprecedented. The demand coming out of Asian households will be 8 times larger than that of U.S. households by 2013.

As a result of this shift, we will start to see innovation with a distinctly Chinese flavor, as a layer of product and business model innovation is laid on top of the ultra-efficient supply chains that the Chinese have developed for the rest of the world. Don’t underestimate the very real competition that these supply chains will engender.

To be successful, companies will need to switch from a product-to a market-centric strategy. A product-centric mindset approaches a market by asking how to be able to sell a current product in a dynamic, fast-growing market. You’ll hear businesspeople say things like, “Great! I’m interested - just tell me how to adapt and sell my core products there.”

What is required now is a market-centric mindset that asks what innovative products need to be developed to succeed in a a dynamic, fast-growing market. How to conduct this innovation, so that it’s suitable for creating products for these markets. That’s why more and more Western companies set up research and engineering centers in China and India every year, and why they’re usually the largest operations outside of headquarters.

What does this mean specifically in the world of outsourced product development (whether it’s software, hardware, services, consumer goods, tractors!) and globalization services? That these two functions will not only converge more and more, but they will do so in China, as the number of R&D and offshore development centers opened by international companies continues to rise, followed by global project management for globalization services. In other words, don’t be surprised when you find that the delivery of European languages are managed from your service provider’s office in China.

Yewell puts this seismic shift in perspective for the industry as follows:

How are you going to run 6.5 billion words through our traditional translation supply chain?!

The challenge is that software and information have moved to an always-on streaming environment. Anytime you want whatever device it is, it’s on. The question for our industry is how we’re going to react to that. How can we turn our services - and specifically, translation - into the same always-on utility?

If we take the 650 million mobile users in China, and if we just wanted to deliver ten words per user, that would be 6.5 billion words.

It’s going to require radical innovation on the part of the industry, the vendors, the clients, and a complete retooling of the supply chain in order to turn into an always-on, translation-as-a-utility, supply chain.

In 2008, Asian and Indian companies acquired more businesses outside of Asia than European or U.S. multinationals acquired within it (McKinsey)

Try as you might, whether you’re a big or medium-sized company in China looking to expand outward, an SME in the West that must leverage the Chinese market in some way to survive, or a small language services provider, you cannot ignore this trend because it is so huge that it is already affecting you, whether you realize or accept it or not. You must analyze it as it relates to your business in 2010 and then decide how you will integrate your findings into your strategic plan. Good luck! (Don't forget to contact us here at LISA when you run into roadblocks.)

For more details on the 20 insights that these people shared in Beijing, along with all of the presentations from LISA China Focus 2009, click here.)