3rd of 3 articles: How to buy language translation services
The first and second articles in this 3-part Translation Solutions mini-series covered spend analysis, stakeholder engagement, building a business case, creating a sourcing team, asking intelligent questions to select the right supplier and assessing quality. But how do you make sure the language translation agency you select delivers all the business benefits promised? This final article in the series explores how success can be achieved by avoiding “deal leakage”, effectively rolling out the new service, and implementing good Supplier Relationship Management.
The job is not yet done just because a contract has been signed with a new language translation agency. “Compliance” now becomes a key challenge. Will internal stakeholders actually use the new service or simply continue using the multitude of translation agencies they have always used? If it’s the latter, all those amazing business benefits everyone has worked so hard to define and negotiate will simply evaporate into thin air. Value will “leak” out of the deal. So, how can this undesirable situation be avoided?
Manage change
The answer is effective change management. Though consolidating suppliers and switching can hardly be classified as major organisational change, it’s a change to the internal users of translation services nevertheless. And as such, it should be effectively managed to ensure the new desired behaviours are adopted across the board.
Assuming you have followed the advice in the first article of this series, the new translation solutions agreement should work for all key stakeholders, and at leadership level all relevant stakeholder groups should have bought into the new way of working. But, it’s the people further down in the organisation that, through their actions (or inaction) will determine whether the project becomes a success.
So, at this stage in the change management cycle it’s about engaging with users to communicate expectations and overcome any inertia there may be. Communication needs to be clear, consistent and remind users why the new solution serves them better than the old ones. The chosen supplier will likely be able to help with this, as they have been involved in rolling out their services in other organisations.
Manage the service roll-out
Also, to allow space for taking corrective action, a phased roll-out should be considered. This is particularly helpful in large organisations. Built into the roll-out phases should be a “grace period”, giving users a realistic time-frame for finishing their engagements with legacy suppliers. Trying to change supplier mid-way through a project will only cause delay, added costs and potentially lower quality.
However, once the “grace period” is over, all legacy suppliers must be removed from procurement and financial systems. Any user insisting on carrying on with a legacy supplier then will need to justify this to management. Only in exceptional cases, if at all, should permission be granted.
Manage the supplier
Rolling out a new solution is one thing. Ensuring that the new solution continually improves is quite another. To ensure continued benefits improvement, a suitable Supplier Relationship Management approach needs to be put in place. This goes beyond just ensuring that the services are delivered to the standard outlined in the contract. It’s about building a mutually beneficial business relationship where joint re-thinking and innovation can thrive.
One aspect of building that type of collaborative environment is regular Business Performance Meetings to jointly agree and track Key Performance Indicators (KPIs). If both parties are involved in developing KPIs, both parties are more likely to see the benefits of these KPIs. This, in turn, means that both parties will be more committed to tracking and improving them. The purpose of KPIs is not just to measure performance of the supplier, but also to measure performance of the buying organisation. Do you, for example, pay invoices on time and provide the information the supplier needs on time?
Conversations during Business Performance Meetings should include joint problem solving and idea generation. For example, exploring innovation that could help overcome a challenge or deliver value in some other way.
At some future point you will want to know whether the negotiated deal is still competitive compared to what other suppliers have to offer. The most common way of checking that is to run a Request for Proposal (RFP) process. However, running an RFP is time consuming, and therefore expensive, for both the buying organisation and suppliers. But are there any alternatives?
Perhaps avoiding RFPs altogether is not the solution. But neither is routinely repeating an RFP every year or every second year. It disrupts the supplier relationship and makes it harder to jointly build business value. One alternative option to consider is defining certain trigger points that would justify an RFP. If, for example, jointly defined KPIs relating to “partnership value delivery” fall below a certain threshold.
These trigger value delivery KPIs could be defined to measure the additional value creation you would expect from a long-term partnership style relationship. So, it’s not about the supplier continually reducing their margin, as this will eventually become unsustainable. It’s about both parties working jointly on taking costs out of the process, improving quality and reducing variability. That requires creativity, collaboration and long-term thinking. KPIs that measure partnership value delivery could, for example, be based on the following:
- Cost and quality impact of innovation supplier has brought to the table
- Cost and quality impact of supplier’s process improvement ideas
- ROI of joint improvement projects
If you have read all three articles in this mini-series, you are now in a good position to derive maximum business value from your organisation’s language translation spend.
Armand Brevig is the Managing Director of Procurement Cube. He speaks four languages and his diverse experience includes leading the procurement transformation of translation solutions for a global blue-chip organisation. Key benefits included total cost reduction through vendor consolidation and deployment of innovative technology, as well as risk reduction through consistent best practice processes.
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