Is the localisation industry focusing too much on tech, and overlooking how other solutions can also lead to growth? In this exclusive article for Imminent, Airbnb’s Head of Localization and Ph.D. in Applied Linguistics Salvatore Giammaresi tackles how most effective innovations may arise from truly understanding customers’ pain points.
Charting a path to unlock value
We live in a world of constant change. And yet the localisation industry seems immune to the transformational wave that has swept other fields. Why? I believe that a new kind of partnership between buyers and providers is essential in order to reinvent and foster innovation in the industry. These relationships must be based on trust, transparency, common goals, and the alignment of strengths.
Buyers and providers must also focus on non-tech innovations, which usually don’t require engineering resources. I’ll distinguish between small, medium-to-large, and very large buyers based on the investment their companies make in the localisation of their products. These investments take shape in the size of the team, the resources available, and the allocated budget.
As companies mature and realise the business impact of localisation, they tend to invest more. Small buyers therefore become medium-to-large, and eventually, truly global companies become very large buyers. On the other hand, the provider side is an ever-evolving landscape, so we’ll differentiate between tech-focused, language-focused, and hybrid providers.
“Innovation is change that creates a new dimension of performance.”Peter Drucker
Innovation doesn’t always require technology
As Marc Andreessen predicted, “software is eating the world”. Indeed, it has become a critical success factor in almost every company across any industry. Over the past few decades, the speed, quantity, and impact of technological innovations have been so profound that it is easy to identify innovation with software itself.
This is compounded by the unique power of technology to scale any innovation, which can result in technology being confused for the innovation itself. The same is happening in localisation. Our whole industry would be better served by focusing equally on technical and non-technical innovations.
This would help alleviate the issue faced by many localisation teams – both on the provider and the buyer side – who don’t have enough dedicated engineering resources. Executing non-technical innovations, at least at first, does not typically require engineers. At some point, engineering support may be needed, but there’s much value to be gained before that stage.
Localisation is a complex, matrix-like domain at the intersection of communications, culture, operations, and technology. By focusing on technology, buyers and providers often overlook how they can innovate across other aspects of localisation. Non-tech innovations usually don’t require large investments and can be done incrementally. What’s more, anyone involved in the end-to-end localisation process can innovate.
Partnership is required to unlock innovation in localisation
A key issue preventing innovation in our industry is a lack of partnership between buyers and providers. A true partnership – based on trust, transparency, common goals, and strength alignment – can pair companies that can identify and fund what needs to be innovated with the capabilities of companies able to unlock this value. This is what I’ve done at Airbnb, and it’s led to high-impact results in less than two years.
Most companies in this industry are in the small or medium-to-large buyer category, or the language-focused provider category. The scarcity of engineering resources on all sides makes it hard to innovate technologically. Even with resources, most companies are focused on maintaining their current systems and processes.
Small buyers typically use low-tech solutions or whatever general purpose tools are available. Medium-to-large buyers, especially as the volume of their localisation projects increases, start to see the benefit of better tools. However, they are often unable to secure the resources or executive buy-in to implement solutions. This helps explain why buyers and providers struggle to develop and launch innovative technical projects.
It’s often easier to maintain the status quo, because any change requires time, money, and resources they don’t have readily available. The benefits have to be significant enough to justify the change. Lastly, their other day-to-day demands and priorities leave little time and resources for innovation.
Very large buyers and hybrid providers have the luxury of dedicating engineering and operational resources to these projects. Because of the scale these companies are accustomed to, they have a clear need to innovate their localisation workflow – even small optimisations can return huge benefits. These businesses tend to build proprietary solutions that fit their specific needs, or to buy, adapt, and integrate third-party solutions within their platforms.
Tech-focused providers exist because they’ve developed innovative solutions they believe can provide value. But they face competition from hybrid providers who often offer solutions as an added benefit for free or for a fraction of the cost. They’re also challenged by very large buyers who would rather build solutions themselves, as well as by the lack of know-how and resources to adopt new tech products among small buyers and language-focused providers.
For tech-focused providers, medium-to-large buyers and larger language-focused providers are the most likely clients. Low-tech, scrappy solutions can no longer match their complexity and their need to optimise speed, quality, or cost. These companies need innovative products, but usually can’t afford to develop them in house.
On the other hand, very large buyers and hybrid providers who find it more efficient to buy are common client for tech-focused providers. In some cases, these companies may decide to acquire tech-focused providers to enhance their portfolios.
Transparency between buyers and providers increases value
One path forward is for more transparency between buyers and providers. For too long, most buyers in the localisation industry have treated providers as suppliers of commodities. This is partly caused by the cookie-cutter narratives providers use in their sales pitches. As a result, they’re not able to differentiate themselves, which leads potential buyers to view them as mere providers of commodities.
A notable consequence of buying commodities is that they don’t require partnerships – they are interchangeable cogs in a machine, and that need can be fulfilled by anyone. Localisation services aren’t commodities. Our business is too nuanced to apply commodity-like processes, especially when buyers don’t have the resources to create or run their localisation systems.
Often, buyers are purchasing several parts of the machine that integrate into their complex infrastructure. They’re also investing in full-time employees and a large number of provider-based resources who will need to keep everything running smoothly. Strong partnerships are required to manage this complexity.
The most effective innovations arise from truly understanding customers’ pain points. This puts many providers at a disadvantage, as they look outside-in to discover how they can add value. Buyers with an inside-out view are usually better positioned to identify and prioritise the pain points of their daily operations.
A true, goal-oriented partnership would allow providers and buyers to jointly set cost-saving optimisation goals to reinvest all or part of these savings in order to fund innovations in other areas. This creates a beneficial cycle where buyers identify pain points and providers help solve them, allowing companies to create value, part of which is reinvested in partnerships to address other pain points.
“I define innovation as executing new ideas to create value.”Tim Kastelle
One of the secrets to our progress at Airbnb was the transparent partnership with Translated. It requires continuous nurturing and dedication, but it is absolutely achievable, as proved by us and other examples in the industry. Reinventing the buyer-provider partnership is the most effective innovation to strive for in localisation.
Paving a path forward
I believe that both buyers and providers must focus more on non-technical innovation that creates impact for their companies and the entire localisation industry. We must ask ourselves, “what can we change to unlock value?” I’ve asked myself this question every day while leading localisation and globalisation teams at Yahoo, PayPal, and Airbnb.
The good news is that anyone in the localisation industry can innovate, whatever their role or level. Simply rethink the role you play, and take action to bring about a wave of change.
The more we innovate, the more value we create. This leads to increased value in our entire industry, which then helps us attract talent. It’s a virtuous cycle. So, what will you change?
Photo credits: Emily Rudolph, Unsplash / George Pagan, Unsplash / Debashis-rc-Biswas, Unsplash