Within the global translation market, there are over 200 global language service providers (LSPs), each reporting annual revenues larger than $1 million. Collectively, the 2020 revenue of all 200 companies equates to approximately $8 billion. All of these LSPs have robust service structures, hold a presence across different time zones, and cover 50+ languages.

Fortune 500 companies are increasingly weighing the possibility of choosing a one-stop-shop solution for their company’s LSP needs across global markets. Can this seemingly perfect centralization solution really exist? Should it exist?

Let’s examine the pros and cons of a centralized global provider vs. many smaller local translation agencies.

Advantages of Global LSP Providers

24/7 Coverage

Global providers offer non-stop service support. Armed with a network of vetted freelance linguists and offices across multiple time zones, global firms can provide quick customer service 24/7. This means if there’s a problem with a project, it will be addressed quickly.

Expanded Service Menu: Beyond Simple Document Translation

Smaller, local agencies tend to focus on at most a few languages. Additionally, they usually do not offer services outside of standard document translation. Global providers have invested heavily in not only covering a wide range of languages but also services that complement traditional translation projects.

Examples of this include: SEO on top of website localization; the development of “localization-friendly” e-learning modules for different markets; and subtitling and voiceover of multilingual scripts.

This enables them to offer a full package solution and alleviate the client’s burden of coordinating various vendors on a project.

High Security Standards

Global providers are obliged to follow very strict security policies dictated by both their client and their certifying body (ISO, TÜV, etc.). Linguists and employees are rigorously monitored through non-disclosure agreements (NDAs) and technological solutions to ensure confidentiality.

Internal and External Audits

One global provider is easier to audit than hundreds of smaller providers in the regions. On average, global translation companies are audited by their clients every two to three years; in some cases, even yearly.

Global providers are equipped to handle these audits. They often have dedicated internal quality assurance teams that execute client audits on a weekly, if not daily, basis. Additionally, all major LSPs follow ISO-standards, which is often a prerequisite of being able to work with large global businesses.

Centralized Translation Memory and Global Language Asset Management

Even the most organized company will struggle with internal communication between teams. Often, global companies distribute a document for local translation, but fail to coordinate with other offices, meaning the document is translated twice.

For example, let’s say a company is operating in both Germany and Austria. Their Germany office has already translated an English document into German. The Austrian office, unaware of this, also gets the same document translated into German a second time by another agency. See the problem?

Global LSPs place heavy focus on a centralized language asset strategy. This ensures that not only translation memories are referenced, but also glossaries and style guides as well.

All content that was previously translated can easily be detected via the central translation memory (TM) database. This eliminates the risk of translating the same document twice, ultimately reducing costs.

Translation Management System Benefits

Managing the full translation cycle of a project can be complex—even more so when multiple languages are involved. Global LSPs focus on providing their clients with a robust translation management system (TMS) that creates a workflow from the initial upload of content to the finalized translated product.

Here are some of the core benefits of a TMS:

• Improved security
• Solid reporting
• End-to-end project management
• Language asset centralization
• Project status and budget tracking
• Integration with other systems (Veeva, Salesforce, ServiceNow, Sitecore, etc.)
• (Multi-)vendor management

Disadvantages of Global Providers

Global vs. Local Pricing: Low-Cost Markets

With a few exceptions, most global providers struggle to compete with local agencies when locking in competitive rates for certain markets. These markets include specifically Latin America, Asia, Africa, and some countries in Europe (mostly Eastern Europe).

TM helps global providers reduce global rates to a minimum. However, infrastructure costs and different margin expectations prevent the major global LSPs from matching the low-cost rates of their smaller local competitors.

Local Requirements and Flexibility

Local translation companies can be more flexible and knowledgeable about local regulations. Despite a global LSP’s worldwide network of subject matter experts and qualified linguists, their insight is limited. Local requirements may not have been as deeply explored or studied in the same depth as with local agencies. Think of sworn translations for Vietnam or highly specialized interpreters for a meeting in an industrial, remote site somewhere in China.

Local Invoicing

Currency fluctuation along with tax requirements can have major impacts on the total price of a product. While global companies have offices spread across the globe, not all countries are covered. Foreign invoicing complexities often mean higher costs for the buyer.

The Best of Both Worlds?

There are certainly advantages of working with one or two global providers; advantages that can and often do outweigh those of working with many smaller agencies regionally. Yet, companies still consistently find the need to use smaller local LSPs for special cases. Historically, the main driver behind the quest for vendor consolidation has been cost and the need for centralized supplier management.

So, rather than asking if using a global LSP vs. a local agency is better, the question becomes how I (the global buyer) can have all the benefits and ease of working with one large LSP while integrating management of several small LSPs for niche cases without driving costs up.

By implementing a global multi-vendor TMS, large enterprises can continue working with local and regional vendors in certain markets where it makes sense. This allows large companies to use multiple vendors with ease by ensuring everything is centralized in one multi-vendor management platform.

A robust TMS ensures the following:

• Faster time to market by eliminating long project management cycles
• Immediate access to centralized language assets
• The highest security standards for all vendors using it
• Full visibility to global buyers around their translation spend

Interested in learning more about TransPerfect’s integrated TMS solution? Please contact us for further info here.