Language Localization Special Section - What is LISA?
By Rolf Rykken
Founded in 1990 in Switzerland, the Localisation Industry Standards Association (LISA) is the premier organization for the promotion of the interests of its individual members, as well as of the localization industry as a whole.
Of equal importance is to ensure that multilingual software, documentation, and related products are manufactured worldwide to the highest possible standards. To that end, LISA provides its 180 member companies an opportunity to exchange information on the development of processes, tools, technologies and business models related to localization and globalization.
LISA is not only an organization for localization and translation firms, however. A number of Fortune 500 companies have joined in the last decade, as a way to more closely interact with LISA members and to take part in the standards setting process. These include Microsoft, 3Com, Cisco, Compaq, Disney, Medtronic, Novell, Nortel Networks, PeopleSoft, Sony, Unisys and Xerox.
"We now sell more than $5 billion per year of our products outside the United States," says David Brooks, senior director, international product strategy at Microsoft. "Our involvement in LISA has allowed us to explore important localization models, services, technologies and data with other software publishers and this has contributed to our ultimate goal of getting quality products to the local markets, on time."
Sue Ellen Wright, Professor, Kent State University Institute for Applied Linguistics, says LISA is one of the first organizations to appreciate the significance of educating future international business leaders about the strategic concepts, processes and considerations related to how initial product design affects the later marketing of the products worldwide.
Going Global One Word at a time
In the fall of 1999, illustrator Michael Gibbs received an e-mail from an Italian Advertise agency. The firm wanted to buy artwork from Gibbs' online portfolio of stock images
But Gibbs was stumped. Although it would be easy enough for him to send the image to Europe via the Internet, he had no idea how to bill the company.
"I didn't know the dollar-to-lira exchange rate or how to arrange a wire transfer," says Gibbs, of Alexandria, Va. "Plus, they needed the illustration by the close of business, and due to the time difference, I barely had time to do the research. If I wanted to make the sale, I had to act immediately."
As it turned out, Gibbs couldn't work out the details and the deal fell through. He isn't alone. Worldwide, a strange phenomenon is occurring. Large and small companies, even those with the most meager of a web presence, are being approached by all sort of potential overseas clients via the Internet. The majority of these firms, however, even many of the biggest firms, are not prepared to take full advantage of the revolution.
In most cases, companies have made little or no effort to adapt their traditional business practices to the web's global environment. Their websites, if they even exist, are written only in English. Many other firms have indeed made rudimentary efforts to reach out to foreign-language customers - for instance by translating a home page into a few target languages - but then have not followed up with development of the basic business practices needed to support overseas web sales. Such actions as fulfilling orders, sending out invoices and delivering post-sale service is a lot more daunting in Brazil than in Boston.
The result of all this is obvious: missed sales and missed opportunities to expand.
But there is help. Many of the 180 or so member companies of the Localisation Industry Standards Association (LISA) offer products and services to assist companies worldwide who are struggling to figure out how to localize their websites and products, and globalize their approach to doing business.
Not only do many LISA members offer basic translation services, but many have the expertise to help companies tackle cultural and language issues to give a company the edge it needs to sell its products around the world. And, increasingly, these firms can also help handle the back office and support services that enable a company to make more full use of the Internet's capabilities.
Not Made in America.
"Localization means more than simply translating a corporate website and rewriting a few purchase orders," says Michael Anobile, managing director of LISA, which is based in Switzerland. "Localization is the overall term used to describe the process that enables a product to be sold and used more effectively in different international markets."
Any product that is "properly localized has the look and feel of a product manufactured nationally - not of a product made in America being sold in a foreign market. American references must be removed."
To illustrate the importance of localization, Anobile points to software products - including eCommerce enabled websites - which he says are the most frequently translated item. Whenever such a product is localized, he says, three key elements need to be taken into account simultaneously - language translation, software engineering and cultural and content adaptation.
"Language translation is critical because screens, online help systems and documentation all need to be understood in the user's native language," Anobile says. "Software engineering enables the user to interact with a product. And perhaps most importantly, software products need to speak the local language - not only the words, but the nuance."
To do this most efficiently, Anobile says, a company should adhere to the concept of "globalization," which can be described as a concerted effort to extend a company's localization efforts back to the point where they affect how the core product is being engineered. In other words, globalization aims to ensure that a product is designed from the beginning to make subsequent localization into multiple languages and markets easier and less expensive than the more traditional ad hoc approach.
"This means going upstream, ensuring that an international mindset is incorporated into product design from the very start, that efficient localization and testing procedures are in place, and that senior management supports the issues involved," Anobile says.
Practically, this can mean everything from zapping all references to such American colloquialisms as baseball, apple pie or Chevrolet. It may mean modifying the type of music that is integrated into the product. It may even mean overhauling the actual function of an application to make it comply with the laws and conventions of the target market, as is often the case with business programs that have accounting packages.
Such modifications are critical to a company hoping to sell its goods and services in the global economy in an efficient manner, says Anobile, who cites a 1998 study by Forrester Research that shows people are likely to spend twice as much time at sites written in their native language, and are three times as likely to buy from them.
"These examples clearly show that one of the main drivers behind the rise of the localization industry is the spread of information technology," Anobile says. Yet it is not only the IT manufacturers themselves that must rethink their localization policies, he says. Far from it.
All manufacturers should "rethink their localization policy, and in some cases put a localization strategy into place for the first time," he says.
A recent Boston Consulting Group report, in fact, says that six industries will account for 65 percent of business-to-business (B2B) transactions by 2003, only one of which engages in a core IT activity. The six are the motor vehicles industry, the transport industry, industrial equipment manufacturers, technological goods, government agencies and departments, and the retail sector.
Many Options, Growing Need.
For any company looking to tackle its localization challenges, there are many options, ranging from the services of full-service corporations to those of some very sophisticated "mom and pop" translation outfits. Lernout & Hauspie (L&H), a 1,700-employee translation and localization firm based in Ieper, Belgium, is one of the largest.
"We recognize the problems corporations face while operating in a global marketplace," says Kaija Poysti, director of enterprise consulting in the Boston, Mass. branch of (L&H). "As companies are starting to earn revenue from worldwide sales, they need to make sure that their websites are translated in a way that is culturally sensitive and legally accurate."
L&H is a publicly-traded company that earned $211.6 million last year. At any one time, a team of more than 1,000 key personnel are on hand to translate, edit and help market websites. Of course, this level of hands-on service comes at a price. The average cost for translation at L&H is about .45˘ per word (versus an industry average of about .25˘ per word). Considering there are about 300 words on an average page and most websites contain several pages, the cost of the job can be considerable.
Such giant localization firms didn't really exist a decade ago, when players such as Lionbridge, Bowne and L&H were still in their relative infancies. Only the language and translations firm Berlitz, which in recent years has emerged as an important localization services provider, was widely known. In the coming years, the growth is expected to continue. Analysts predict the translation industry will go from $11 billion in sales this year to $20 billion by 2004.
Of course, a decade ago the world - the pre-WWW world - was a very different place. Any U.S.-made product targeted for foreign sale would have its supporting documentation translated into a few target languages, usually well after completion of product development.
At a growing number of firms, however, such practice has been made taboo by the realization that the original engineering of the product should incorporate fully all later plans for international marketing and support.
The reason for this is simple and compelling.
"Product life cycles are extremely rapid," says Ed Deveau, director of customer information training and services at Nortel Networks, the giant Canadian telecommunications firm. This is especially true in the IT industry, he says, where at some foreign subsidiaries, upwards of 60 percent of revenues can "come from products that did not exist 12 months ago."
No longer can a company expect to keep older products on store shelves in foreign markets, as was the case for many decades. In the Internet-connected world, buyers around the globe are aware almost to the moment of when the latest version or the newest model of a product is introduced.
"It is well known," Deveau says, "that customers in other countries generally stop buying the current localized version of a product when the new English one is released."
The Future Arriving Fast
Localization is not an absolute necessity for most companies, at least not yet. And indeed, most products that are shipped abroad are handled by companies that have made at best only rudimentary efforts at localization.
The question for such companies, however, is whether they are coming anywhere near to fully exploiting their markets.
According to the figures provided at a recent forum hosted by LISA, as much as 10 percent of a company's revenue from a particular product could be lost if foreign-language versions of the product are not shipped within two months of release of the English version.
This is especially true for communications firms, and computer hardware and software manufacturers. Such companies typically earn anywhere from 45 percent to 60 percent of their revenues outside the U.S. market, says Rory Cowan, president of Lionbridge Technologies, Inc. And at growing numbers of both IT and more traditional manufacturers, the global share of the revenue stream is increasing more quickly than the share earned in the home market, he says.
Companies therefore must recognize the strategic need to tailor their products and services to specific geographic markets.
The ability to localize simultaneously for multiple markets "can have immediate effect on customer perceptions, buying habits, and corporate or brand images," Cowan says. "Ultimately, such effective globalization can impact revenue streams and profitability."
Despite the surging need for globalization, only a few firms have elevated the effort to the level of corporate strategy.
"We have not seen the emergence of a Chief Globalization Officer, and few enterprises even have a globalization office," he says. The result is that even at the companies that already devote substantial resources to globalization efforts, many still do so mainly on an ad hoc basis, with little coordination at upper levels.
"Usually, the work of globalization involves a wide range of individual localization activities that are performed within pockets of the organization," Cowan says. "Not only are such functional silos focused solely on a go-to-market release cycle, they may be unaware of localization activities happening elsewhere in the enterprise. In many cases as well, these activities may lie beyond the core competence of individual functions."
The Internet has undeniably created a higher level of global awareness more rapidly than any technology before it, says Donald J. Plumley, senior vice president at Bowne Global Solutions.
Yet in an era in which the forces of market globalization are inescapable for virtually every industry and any company, the Internet until the last couple of years was largely an American phenomenon, Plumley notes.
The unfortunate result has often been a slowness by many U.S. companies to take advantage of global opportunities. Many U.S. firms have simply seen little need - or have grown so fast they have had little capacity - to push beyond the home market.
"The largest number of users and the sites with the highest traffic volume reside in the United States," Plumley says. "It is therefore not surprising that the overwhelming majority of content in websites today is in English."
Nevertheless, there have been a number of successful pioneers in setting up global web presences, and much can be learned from their experiences, Plumley says.
"The early leaders into Europe, such as Amazon.com, understood the need for locally relevant content," he says. "They executed their strategy by acquiring a local player on a country-by-country basis. For example, Amazon started in the UK by acquiring Bookpages.co.uk and turning it into Amazon.co.uk; then went to Germany to acquire Telebuch.de to launch Amazon.de.
Bertelsmann also serves as an interesting example of how a European powerhouse developed a Web strategy aligned to capture European consumer market share, Plumley says. "While their joint venture with Barnes and Noble is well publicized, they also created a joint venture with the French publisher Havas to create BOL, a leading pan-European online bookstore. They have made other investments in Internet infrastructure such as ISPs to help bring customers to their storefronts."
But while such business-to-consumer (B2C) sites will continue to grow at a rapid pace, many industry experts expect that the next real boost will come from business-to-business websites.
Indeed, Forrester Research estimates that by 2003, B2B companies will as a group reap 10 times more revenue than B2C companies. And, the Boston Consulting Group figures the rise in B2B purchasing will be so dramatic that 25 percent of all purchases will be made online within the next three years, ringing up transactions worth $2.8 trillion.
"The United States and Canada will continue to lead the way in B2B online business," Boston Consulting Group researchers reported in January 2000. Over the next three years, "eCommerce penetration around the world will triple with an increase from 7 percent to 24 percent in North America and growth from 3 percent to 11 percent in Europe. Online business penetration should increase from 2 percent to 9 percent in the Asia-Pacific region and from 2 percent to 7 percent in Latin America."
Too Many Markets?
eCommerce savvy companies the world over these days are not so much looking for countries where their products will sell - there are often dozens of possibilities - but where they can generate the most revenue relative to investment.
Little wonder then that one of the hot words these days in boardrooms around the world is "focus." And little wonder that localization and globalization services are playing an ever bigger role.
Internet usage is surging around the world. In Europe, one of every four adults reported having used the Net between September and December of last year. In Latin America, estimates of the number of people online range up to 8.5 million, and researchers predict that by 2003 the total number will skyrocket to 38 million. In Asia, the numbers are starting to surge especially following introduction of wireless Internet products in top markets such as Japan. There, the Internet has even reached the corner Seven-Eleven, where kiosks have been installed to serve customers who don't have the money or desk space for traditional PC connections.
Within each region there are a few leading-use countries as well, such as Finland, Singapore and Brazil. Localization expert Patricia Seybold says Ireland is quickly becoming another hot spot.
"I did a quick tour of Ireland in late November 1999, and I saw an Internet powerhouse poised to explode," Seybold says. "On the surface, you might not think that Ireland is any further along the Net path than the rest of Europe. The Scandinavian countries still lead the way in terms of early adoption on both the business-to-consumer and the business-to-business front. Yet, Internet usage in Ireland has jumped from 5 percent in 1996 to 28 percent in 1999."
For most companies, however, deciding on which markets to concentrate depends on a lot more than just the local levels of Internet literacy.
The initial focus has to be on the primary market a company want to work with, and only thereafter on its relative technical development, says Peter Stumpf, general manager of tools and services at STAR Software Co. A lot more is involved than just having a properly localized website, however, says Stumpf, whose Switzerland-based company specializes in some of the world's more difficult markets, including Russia and China.
Stumpf uses China as an example. In such an incredibly complex and constantly changing market, any company with serious plans to expand its sales there should plan on hiring a staff that speaks Chinese. And, of course, an expatriate manager who already has some experience in the country. And one who has some friends, since one of the major factors in the success or failure of working in China is guangxi, which means having good relationships and connections.
Of course, building strong relationships is a key factor wherever a company is hoping to expand, even if it is a well-developed market in western Europe or Asia.
For many companies, the focus increasingly is on markets that can promise big payoffs, even if they are neither easy nor immediate. Take Japan for instance, which has long been regarded as one of the toughest markets in the world for a western company. In recent years, however, this has changed dramatically, which is good news since Japan remains the world's second biggest economy after the United States. Interest in reaching Japanese buyers is certainly growing. At a recent forum hosted by LISA in Tokyo more than 200 people from around the world came together to discuss the technical, cultural and logistic challenges of doing business in the country, and the implications of this for the localization industry.
Hosted by IBM Japan, International Translation & Publishing (ITP), Lionbridge Technologies, Hewlett-Packard, LINC Media, the Japan Personal Computer Software Association and Bowne Global Solutions, the forum confirmed that Japan is embracing the IT revolution as a means of remaining competitive. Another tough - but potentially huge - market is China, says Lionbridge's Rory Cowan. At same time, however, there is lots of uncertainty about how China will handle the growth of the Internet. The government's fear of the technology has been obvious in recent months, as it has imposed a variety of new restrictions on both Internet service providers and on the companies that use the Internet. "Every 15 years China has undergone a major policy switch and there's no knowing what they will do next," Cowan says.
A well-thought-out localization policy is not easy, nor will it be inexpensive. But for many companies, it is also something that can be approached organically, with the effort growing along with the growth in overseas sales.
Nevertheless, the best time to start integrating localization tactics and strategies into a company's way of thinking is right now.
So far, few firms have really done so, and even fewer have established a home or sponsor for the process of localizing and globalizing products and processes, says David Johnston, president of Johnston and Associates, Inc.
Johnston, who during an 18-year career with IBM became well-versed the problems associated with localizing products, says one answer is for companies to design a single worldwide product instead of building different versions for each country.
"When I was at IBM, we found it was extremely expensive to make a new product for each country," he says. "We never completed product enhancements for each country before a new version was announced and we had to start all over."
To compensate, Johnston says IBM hired a staff of experts to produce what he calls "country-generic" software. Johnston's Sarasota, Florida firm now does the same thing for dozens of clients, including IBM. His goal, he says, is to ensure that his customers create products that can be used worldwide. To that generic end, Johnston insists that his clients go through his checklist of 180 design issues. This includes lots of specifics such as commas (used as decimal points instead of periods in Europe) dollar signs (used as a decimal point in Brazil, where it bears no relation to the U.S. dollar), and color (red in western countries is associated with emergencies, errors or minus figures; while in China and India it connotes positive, joyful events).
The process also involves lots of generalities, he says. "As more and more developers are seeking to internationalize their software, senior management must decide that going international isn't just nice - it must be a way of life."
Doing anything else, says LISA's Anobile, "means kissing good bye to a significant portion of the revenues."