No one disputes that procurement professionals have tough jobs: they must find a vendor who will understand their business, charge a fair price to do so, and execute their work optimally over time. However, they must also decide whether one vendor will suffice or if several are necessary — and this is an important question.
There are compelling reasons for enterprises to single-source their localization programs — such as gaining the ability to create and grow a holistic, centralized localization model, and to innovate and evolve a program via a deep relationship with one vendor. We covered the pros and cos of each production model extensively in our recent webinar Localization Single Sourcing Explained.
Currently, some 15% of global organizations choose to single-source, according to Common Sense Advisory. In our experience, most single-sourcing enterprises are experienced buyers of localization services, seeking to optimize an established localization program, and requiring cohesive and centralized services.
So while the adoption of single-sourcing is on the increase, not every organization will be mature enough to choose that approach. What about the others? At Moravia, we don’t favor one model over the other. Where companies currently use multi-vendor localization models, we see they do so for the following reasons:
- Risk management. Should a vendor fail or become insolvent, having multiple vendors prevents your localization program from faltering or failing completely. Business continuity is paramount when running a global business — if you can’t make product releases or have constant delays than product launches may fail and significant money can be wasted. Should a single vendor fail, transition to a new supplier takes time that can cost big, big bucks.
- Scalability. If the workload is highly variable, sometimes a single vendor cannot scale quickly enough (or at all) to meet the needs of very large programs (more than $5 million). Multiple vendors together can aggregate resources to provide the number required to complete a large job or frequent high volume jobs.
- Cost benchmarking. Often, our clients with multiple vendors compare vendor pricing and ask for price matches and ‘pencil sharpening.’ The idea is that each vendor should have the same pricing for the exact same services.
- Specialization. While many LSPs specialize in many languages and subject matters (i.e., marketing, legal, software), using vendors for different specializations can ensure completeness of coverage.
- Process optimization. When using multiple vendors, enterprises can take advantage of each vendor’s technical acumen to optimize processes. For example, one vendor might have a unique UI translation process that involves building a testing infrastructure, while another has a better managed services infrastructure to host an in-region publishing team.
- Technology provision. Some LSPs provide no technology (i.e., Translation Management Systems), others may provide off-the-shelf tools, and others still may have the ability to customize and integrate a variety of tools to meet an enterprise’s workflow needs. It is viable and possible that the technology solution providing the best workflow comes from a vendor different that the vendor that, say, provides the marketing localization expertise. However, please see a recent blog on how using multiple vendors can complicate TM sharing.
- Time-zone coverage or multi-location support. Not all LSPs may have equal coverage in all regions, meaning that 24×7 availability and production is impossible. Or maybe only having one regional hub might present some geopolitical challenges, i.e. some companies don’t want work done in specific countries.
- Multiple quality controls. With multiple vendors comes the ability to compare and set standards for quality. If one vendor is failing in quality for one language, the other vendor’s results can be used to calibrate and improve that of the first vendor. Additionally, cross-vendor quality assurance — one vendor reviewing and filling out a scorecard of the other vendor’s translations — is an option and it can go both ways.
- Ongoing innovation. The friendly competition between vendors can provide the motivation for each to innovate, stay fresh and relevant.
- Objectivity. It can be too easy for an enterprise to assign fault to the single LSP performing work when things go awry. Yet if two vendors are having the same experience, then the effort to understand and quantify what is expected in terms of quality, delivery and any other KPIs is possible. Sometimes an enterprise also needs to see several vendors struggling with program issues before they start to consider possible fixes and even their own responsibility in production challenges.
While there are compelling reasons to single-source, as we have blogged about here, single-sourcing is often adopted by mature enterprises in the optimization phase of localization. Other, less localization-savvy enterprises understandably can feel nervous about putting all their eggs in one basket — and in many cases should not do it. Those are typically the enterprises who are exploring global markets and growing their localization program. They possibly should seek to gain best practices and expertise from multiple sources as they build their localization program. Either way, single or multi-sourcing is a decision not to be taken lightly, and the answer differs per enterprise.
If you are a global explorer or optimizer, what additional value-adds do you see in using the multi-vendor model? What issues do you see?