Are We Staring at End-Of-Days for LSPs?

By Sudheen M, Crystal Hues Limited

Language Service Providers (LSP) across the world has been seeing a significant drop in business in the last 3-4 years. One of the most credible research organizations for the language industry has also noted the decline in the growth rate over the last couple of years.

We have been analyzing various developments that may have resulted to this debacle for LSPs and were surprised to discover some of the facts.

Let us recapitulate couple of significant developments in the translation industry over the last five years, which we believe are more universal, and then let’s analyze the impact it may have had.

1. Online integrators: Many online portals now facilitate search and selection of translators most appropriate for the translation of text. Most of the LSPs incur great cost (and pains) to develop and maintain such translators’ database which is one of the main components in the business model of the LSPs. The second important component of LSP business model is the project management services. Now, online integrators have made the translators’ database available for free at the click of a button. In addition, many of these portals also facilitate project management that includes assigning multiple translators on a project and managing schedules, invoicing and payments.

Impact: Most of the LSPs’ business model is based on the ability to access translators and the project management services that the clients need for their translation requirements. These are important services provided by the LSPs and were fundamental components of the LSP business model, which are now being provided by these portals free.

2. Technologies and innovations: Machine translation and translation memory tools have evolved to provide more accurate translation and is now gaining much more acceptability. In addition, the technologies used for further processing and delivery of translated content for publishing, internet and multimedia have also evolved to ensure professional use by an absolute novice to such technologies.

Impact: Another important component of LSPs’ model business is the use of technology for managing translation memories and use of still more technology for delivery of the translated content for any end use be it for publishing, internet or multimedia.

These two developments have led to the loss of vanilla projects (simple translation from one language to another). In addition, these developments have also resulted in the decline in the volume of business per client.

The LSP business model, in general, based on providing appropriate translator and undertaking the project management is now increasingly becoming irrelevant. Many businesses, with similar business model purely based on captive information and project management (travel agency, real estate agency, etc), seems to be staring at end-of-days.

Author: Sudheen M is the President of Crystal Hues Limited (CHL), an integrated localization and marketing communication company based in India. An ISO 9001:2008 company established in 1989, CHL is a unique organization that combines Content (development, translation), Creative and Promotion services. Specializing in delivering content in any language across various technologies, CHL has 100+ professionals across six offices in Asia delivering end-to-end linguistic services in Indian and international languages.