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Localization in 2010 and Beyond: A Varied Spectrum of Service Models Please note that the audio for this webcast will be streamed.

Presented by Paula Shannon Hosted by Roberto Sastre 17 June 2009


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Agenda Introductions Cobblers or Conductors Differentiated Services and Pricing Models A Symphony of Service Models

Live Q&A Company confidential – distribution prohibited without permission


Introductions Paula Shannon CSO, SVP and General Manager, Lionbridge Paula.Shannon@lionbridge.com Leading industry strategist with more than 23 years experience in the translation and localization industry Recently profiled in the Wall Street Journal Responsible for sites in 26+ countries, driving new services and sustainable solutions, ensuring the continued delivery of innovation and execution excellence to a broad range of Global 1000 customers

Roberto Sastre

Director Government Business Europe Roberto.Sastre@lionbridge.com Lorem ipsum dolor sit amet, consectetur adipiscing elit. Donec et bibendum enim integer adipiscing

Proin nisi risus, rutrum in lacinia vitae, aliquet sed nibh. Phasellus gravida ligula ut mi adipiscing vel consequat nisl adipiscing

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The Cobbler‘s Song

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The Cobbler‘s Song

I sit and cobble at slippers and shoon

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The Cobbler‘s Song

I sit and cobble at slippers and shoon From the rise of sun to the set of moon

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The Cobbler‘s Song

I sit and cobble at slippers and shoon From the rise of sun to the set of moon Cobble and cobble, as best I may

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The Cobbler‘s Song

I sit and cobble at slippers and shoon From the rise of sun to the set of moon Cobble and cobble, as best I may Cobble all night and cobble all day

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The Cobbler‘s Song

I sit and cobble at slippers and shoon From the rise of sun to the set of moon Cobble and cobble, as best I may Cobble all night and cobble all day And I sing as I cobble this doleful lay… Company confidential – distribution prohibited without permission


The Cobbler‘s Song

The stouter I cobble, the less I earn

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The Cobbler‘s Song

The stouter I cobble, the less I earn For the soles ne’er crack, nor the uppers turn

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The Cobbler‘s Song

The stouter I cobble, the less I earn For the soles ne’er crack, nor the uppers turn The better my work, the less my pay

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The Cobbler‘s Song

The stouter I cobble, the less I earn For the soles ne’er crack, nor the uppers turn The better my work, the less my pay But work can only be done one way

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The Mozart Effect The issue service industries face is The Mozart Effect, as described by William Baumol, an economist at New York University* As noted essayist and author, James Surowiecki puts it, “When Mozart composed his String Quintet in G Minor (K. 516) in 1787, you needed five people to perform it—two violinists, two violists and a cellist. Today, you still need five people, and, unless they play really fast, they take about as long to perform it as musicians did two centuries ago. So much for progress.”

*Performing Arts: the Economic Dilemma (1966), Baumol and Bowen


Baumol’s “Cost Disease” In a range of businesses, such as the car manufacturing sector and the retail sector, workers are continually getting more productive due to technological innovations to their tools and equipment.

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Baumol’s “Cost Disease” In a range of businesses, such as the car manufacturing sector and the retail sector, workers are continually getting more productive due to technological innovations to their tools and equipment. In contrast, in some labor-intensive sectors that rely heavily on human interaction or activities, such as nursing, education, or the performing arts there is little or no growth in productivity over time. As with the Mozart string quartet example, it takes nurses the same amount of time to change a bandage, or college professors the same amount of time to mark an essay, in 2006 as it did in 1966. Company confidential – distribution prohibited without permission


Are We Cobblers or Conductors?

Industry Group B labor-intensive sectors that rely heavily on human interaction or activities, such as education, or the performing arts where there is little or no growth in productivity over time


Are We Cobblers or Conductors?

Industry Group A workers are continually getting more productive due to technological innovations to their tools and equipment

Industry Group B labor-intensive sectors that rely heavily on human interaction or activities, such as education, or the performing arts where there is little or no growth in productivity over time


Are We Cobblers or Conductors?

Industry Group A workers are continually getting more productive due to technological innovations to their tools and equipment

Industry Group B labor-intensive sectors that rely heavily on human interaction or activities, such as education, or the performing arts where there is little or no growth in productivity over time


Are We Cobblers or Conductors?

Industry Group A workers are continually getting more productive due to technological innovations to their tools and equipment

Industry Group B labor-intensive sectors that rely heavily on human interaction or activities, such as education, or the performing arts where there is little or no growth in productivity over time

The Translation Industry Exhibits Elements of BOTH!


POLL QUESTION Where does your organization fall on the Cobbler (tools & technology) /Conductor (labor & people) spectrum? a. 25% Cobbler; 75% Conductor b. 50% Cobbler; 50% Conductor c. 75% Cobbler; 25% Conductor

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Airlines, Car Wash, even Lawn Care: Differentiated Services and Pricing Models


What About Pricing Models? We talk about different types of content, but the price is remains, on average, .22 USD cents per word?*

*Common Sense Advisory

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What About Pricing Models? We talk about different types of content, but the price is remains, on average, .22 USD cents per word?*

*Common Sense Advisory

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Cheeseburger Cheeseburger, Cheeseburger. No Coke, Pepsi


Translation, Edit and Proof – Still Operating Circa 1986?

TEP specified service

Our current model

1. An outmoded concept? Does the E and P not pre-date TM systems and collaborative, cloud computing?

Ambiguous service description

1. No definition of what we are to deliver 2. No standard process to be improved upon or re-engineered

Customer specified service

1. Specific Definitions and Quality Levels are Determined (SLA/KPI) 2. Process can be Optimized and Engineered for Improvement

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Quality Means Industry Standards?

Customer Expectations? “My requirements have been met” “Staying on message and on brand” “Avoiding adverse outcomes” “That LSPs use the resources I dictate” “Minimizing headaches on our end” “Consistency I can trust”

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POLL QUESTION Does your company support various pricing models based on quality? a. Never; it always needs to be the highest quality b. Sometimes; depending on the content c. Yes; we always employ various pricing models based on defined levels of quality

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Most Meaningful KPIs and SLAs are Specific to the Client and Content

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Let’s Get a Few Definitions Straight

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Shift Happens - Growth is Migrating to Developing Nations Reaching 1 Billion Users requires +/- 127 languages Connecting 5 Billion Users will necessitate more than 1,000 languages

Internet Top Ten Languages English

329 159

Chinese Spanish

89

Japanese

86

1,200,000,000 1,000,000,000

59

German

1,400,000,000

800,000,000

French

56 40

Korean

34

Italian

31

Arabic

28

400,000,000 200,000,000 0

Chinese Arabic Hindi English Spanish Bengali Portuguese Russian Japanese German French Korean Javanese Telugu Marathi Vietnamese Tamil Italian Turkish Urdu Punjabi Ukrainian Gujarati Thai Polish Malayalam Kannada Oriya Burmese Azerbaijani Farsi Sunda Pashto Romanian Bhojpuri Hausa Maithili Malay Serbo-Croatian Awadhi Uzbek Yoruba Dutch Sindh Igbo Amharic Oromo Indonesian Tagalog Nepali Assamese Saraiki Cebuano Hungarian Chittagonian Zhuang Shona Madura Sinhala Marwari Magahi Haryanyi Greek Czech Chhattisgarhi Fulfulde Deccan Malagasy Belarusan

Portugese

600,000,000

Rest of World Languages 0

203 50

100

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Š Lionbridge 2008

150 Millions of Users

200

250

300

350


Publication Quality

Plotting Quality and Value of Content

Advertising & Collateral

Customer Education & Service

Informational

Community Generated Content

FAQ’s

Product Information Enpocket Mobile Ads eCommerce User Interface

Customer Care After Sales Support

Lower Value Company confidential – distribution prohibited without permission

Higher Value


Varied Content Mandates Differentiated Approaches Transaction Cost Marketing Content Streaming Web Content High

Solution Efficiency Demands

Product Updates and Training Product, Technical Materials Doc and online Help I18N Initial Product Localization

Low

Translation Cost

1/year

Marketable Shelf Life of Content

1/hour


“…But Work Can Only Be Done One Way”

Or Can It?


Varied Service Levels – An Example Type A: Basic The following rates are all-inclusive. Rates include all file preparation, translation & editing, recording & project management – Audio is VOIP and does not include dialog director or post production engineering and QA

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Varied Service Levels – An Example Type A: Basic The following rates are all-inclusive. Rates include all file preparation, translation & editing, recording & project management – Audio is VOIP and does not include dialog director or post production engineering and QA

Type B: Advanced The following rates are all-inclusive. Rates include all file preparation, engineering, desktop publishing, quality assurance and project management. Audio performed by talent in a studio and includes post-production engineer.

Company confidential – distribution prohibited without permission


Varied Service Levels – An Example Type A: Basic The following rates are all-inclusive. Rates include all file preparation, translation & editing, recording & project management – Audio is VOIP and does not include dialog director or post production engineering and QA

Type B: Advanced The following rates are all-inclusive. Rates include all file preparation, engineering, desktop publishing, quality assurance and project management. Audio performed by talent in a studio and includes post-production engineer.

Type C: Professional The following rates are all-inclusive. Rates include all file preparation, engineering, desktop publishing, testing of compiled application, quality assurance & LQI checks, DTP Print proofs, professional voice talent and project management. Company confidential – distribution prohibited without permission


Hybrid Model – UI, MT & Community

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More Content = More Options Microsoft’s View from 2010 On

Broad reach to penetrate new markets effectively

Premiumlevel quality for targeted product audience

Lower-cost alternative for expanded marketplace

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Community outreach at lowest cost for widest expansion


More Content = More Options Microsoft’s View from 2010 On

Broad reach to penetrate new markets effectively

Premiumlevel quality for targeted product audience

Lower-cost alternative for expanded marketplace

Company confidential – distribution prohibited without permission

Community outreach at lowest cost for widest expansion


More Content = More Options Microsoft’s View from 2010 On

Broad reach to penetrate new markets effectively

Premiumlevel quality for targeted product audience

Lower-cost alternative for expanded marketplace

Company confidential – distribution prohibited without permission

Community outreach at lowest cost for widest expansion


Deliverables

Quality

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Current Localization Cost Model Traditional Premium localization cost breakdown ~60%

~25%

Translation Logoport

Proof LTB

95% Average Quality

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Copy Editing

~15%


Current Localization Cost Model Traditional Premium localization cost breakdown ~60%

~25%

Translation

Copy Editing

Logoport

~15% Proof LTB

95% Average Quality

• What % of quality comes straight from translators? • What % gets improved via each of the post-translation steps?

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Basic Pilot #2 MT Post-editing + Tools Average to Good Translators + Tools 50% of cost

MT

MT Post-Editing Logoport 50% Average Quality?

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LTB


Basic Pilot #2 MT Post-editing + Tools Average to Good Translators + Tools 50% of cost

MT

MT Post-Editing

LTB

Logoport 50% Average Quality?

• Use of MT as baseline for Basic loc

• LTB will post-process files and identify/flag strings with highest probability of

wrong MT translation (based on experience + statistics) • Must cut 50% of costs and reach 50% of quality (to be tested/proven in during

pilot) Company confidential – distribution prohibited without permission


Value Pilot #1 Direct Translation + Tools Good (not great) Translators + Tools 70% of cost

MT

Translation Logoport 70% Average Quality?

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LTB


Value Pilot #1 Direct Translation + Tools Good (not great) Translators + Tools 70% of cost

MT

Translation

LTB

Logoport 70% Average Quality?

• By using only translators + tools, we can eliminate 2 steps in process • Probably can cut costs by 30% and still maintain >=70% of quality (to be

tested/proven during pilot) • Perform a LQA to measure the Quality Company confidential – distribution prohibited without permission


Cobblers and Conductors

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Service Oriented Architecture & Components for Enhanced Connectivity A Symphony of Service Models Language Quality Mgt.

Community Models Crowdsourcing

Global Search Relevancy

Asset & Terminology Mgt. Human Translation Authoring

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Computer Assisted TM

Global Branding

MT


Knowledge Center

www.lionbridge.com Download White Papers

• Building Stronger Brands Around the World: A Guide to Effective Global Marketing • Strengthening Global Brands: Key Steps for Meaningful Communications around the World • Building a Global Web Strategy: Best Practices for Developing your International Online Brand

View Webinars

• Web Globalization Trends to Watch • The Art and Science of Global Navigation • The Best Global Web Sites (and Why)

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Questions?

Paula Shannon CSO, SVP and General Manager, Lionbridge Paula.Shannon@lionbridge.com

PaulaBShannon

Lionbridge www.lionbridge.com

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Localization in 2010 and beyond