Digital Transformation of the Language Industry | Translation Company Talk Podcast

welocalize October 28, 2022

In this Translation Company Talk podcast, Welocalize CEO, Smith Yewell joined Sultan Ghaznawi, President, Hybrid Lynx, to share insight into the digital transformation of the language industry. Together they discuss how technology and digital transformation are the biggest enablers of business in the language industry going forward.

 

 

Where can digital transformation take the language industry? Insights by Sultan Ghaznawi

The language industry is an ecosystem driven by demand from outside for speech and text content across any of the current, or in some cases extinct, world languages. Innovation in this industry has primarily been associated with automation, largely with that of text transformation across languages in the form of translation memory and machine translation. But this is just the tip of the iceberg as to where digital transformation can take this industry.

It’s true that certain industries are slow to adopt innovation, in particular digital transformation. The language services industry has also been a reluctant and in most cases a follower, not a leader, in adopting digital transformation. There are so many business functions that still rely on analog and manual processes. Areas such as project management which forms the core of a language services provider, along with vendor management, sales, quality control, accounting, performance monitoring, and compliance are ripe for digital transformation.

Only recently has the language industry started looking at what digital transformation is and what tools are available to help us move in that direction, but we are still busy with micro-topics such as machine translation and cloud adoption. We should be looking at adopting technologies such as Robotic Process Automation (RPA) for automating repetitive and mundane project management and resource management activities. Combining RPA with natural language processing (NLP) tasks such as content summarization, categorization, entity recognition and translation, intelligent solutions could be built to automate many translation business functions and improve performance across the board.

Digital transformation does not necessarily equate to automation or digitization of production. In fact, we are a process-dependent industry, and we must look at ways to digitize all our day-to-day activities in a way that promotes efficiency, compliance, accountability, and integration across different business functions. The possibilities are endless, and our industry is mature enough to adopt digital transformation to scale up and modernize how we operate. It will help us do better and our customers will benefit from the many advantages that digital transformation presents to them to serve their end-clients.

I welcome you to join the conversation and listen to Smith and I in this podcast episode.

 

About Sultan Ghaznawi

Sultan Ghaznawi is President of Hybrid Lynx, a company focused on delivering translation and multilingual data services to solve unique and complex language communication challenges for clients in North America and Europe. As the host of the Translation Company Talk podcast, Sultan interviews localization industry experts, discussing issues and opportunities in the language space affecting provider companies.

About Translation Company Talk Podcast

The Translation Company Talk Show is a B2B podcast show that covers issues and opportunities for the language translation industry. Touching on everything related to translation, and related services including interpreting, transcription, and localization.


Transcript

Sultan Ghaznawi: Hello and welcome to the Translation Company Talk, a weekly podcast show focusing on translation services and the language industry. The Translation Company Talk covers topics of interest for professionals engaged in the business of translation, localization, transcription, interpreting, and language technologies. The Translation Company Talk is sponsored by Hybrid Lynx. Your host is Sultan Ghaznawi with today’s episode.

Sultan Ghaznawi: Welcome to this episode of the Translation Company Talk podcast. Today I am speaking with Smith Yewell about the concept of innovation in the language provider sector. While many companies claim that they innovate, this term is thrown around so randomly. There are few organizations that actually innovate and try to improve things for themselves, the industry, and the consumers of their services. Smith is the CEO of Welocalize, which is one of the tier-one language service providers. He has been the winner of many awards in business, including the Ernst and Young Entrepreneur of the Year, Inc 5000 Technology Fast 50, Tech Council Firm of the Year, and so on. He was also awarded the US Army Bronze Star in Operation Desert Storm. Smith is a graduate of Tulane University with a BA in English. Welcome to the Translation Company Talk, Smith! How are you today?

Smith Yewell: I’m doing very well, thanks and I appreciate you inviting me to participate.

Sultan Ghaznawi: Smith, I wanted to ask you if you could just provide us a quick introduction, and what you’re up to?

Smith Yewell: I’m Smith Yewell, I am the co-founder and CEO of Welocalize. We’re actually celebrating our 25th anniversary this year. So many years ago, my wife, Julia, and I started the company, just the two of us, in the basement of our house. And now we’re over 2,000 people worldwide, so it’s been an incredible journey and we’re incredibly fortunate.

Sultan Ghaznawi: Congratulations to you and your entire team, that’s definitely a milestone to celebrate. Your history in this industry is nothing short of phenomenal. I’m curious to learn how you found yourself in translation and localization.

Smith Yewell: Well, this innovation topic was very much part of the story, communication was very much part of the story. How did the two relate to each other? When my wife and I met, when Julia and I met, we had no common language, so we got into this industry out of our first-hand experience, and that’s how a lot of businesses start, they’re trying to fill a need. And we saw this need. The Internet was just getting off the ground. The World Wide Web, so of course it’s going to involve languages worldwide, so that was our basic business theory. And then we won our first big job with innovation. So right out of the gate, we wanted to innovate. We won our first big contract and that was the… using some creative technologies, some macros with Trados at the time, and at that time Trados was available, but it wasn’t used all across the industry, so we were able to be more efficient and faster. That’s how we won our first big job, and that was with Cisco, and now they’re still one of our biggest clients 25 years later.

Sultan Ghaznawi: That is truly innovation and in in this space and from what I understand, Welocalize is constantly involved and innovating, but over the years that you have been in this industry, please describe the changes, evolution, events, trends, things that stood out for you during your tenure in this industry.

Smith Yewell: There have been a few and you were part of our effort in the open-source space, so you’re familiar with that, and if I would describe the different phases first, we’ve always been trying to innovate towards a vision, which we believe that through interoperability and we were part of an initiative there at the beginning called Interoperability Now in the industry through various standards of file exchange, and we’ve been involved in a variety of those initiatives as well, through connectors and adopting a framework where we’re willing to work with competitors, the whole ecosystem, to try to make it easier, it still is today. It’s not easy enough to process this work, so there’s been several innovations. Some things work, some don’t. We’ve tried things that haven’t worked. We’ve gone open-source, for example, GlobalSight that that you were a part of. We’ve tried interoperability initiatives. Some of those works, some didn’t. So, it’s been experimental, but that’s what innovation is and that’s what will continue to drive us.

Sultan Ghaznawi: So, let’s talk about innovation. And I know the subject is very dear to you. But in the context of a language services company is a company that takes words and transforms them. What does innovation mean to you?

Smith Yewell: I use some analogies, which it’s easier for me to understand. Everyone is familiar with FedEx and FedEx moves packages around the world in pretty amazing ways, and they’ve been able to make it really easy and reliable. That’s what we’re trying to do. Make it easy and reliable and consistent. So that it’s an amazing experience. What’s the analogy? What’s the connection to us? Well, we are also moving packages, packages of words, and other tasks, not just words, but our industry has grown to include all sorts of natural language processing tasks. So, our job is to get that task in one place to the other and then get it there on time and get it there at a level that is going to be easy, amazing and consistent. That’s what we’re trying to innovate. How does a company like FedEx do that with incredible technological innovation, so that’s what we’re shooting for also.

Sultan Ghaznawi: Innovation, I mean, today when we talk about innovation, it’s automatically technology. But innovation doesn’t have to be technology. It could be a change in a process as well in it as a company that has been, you know, a champion of innovation in our industry and our industry being so responsive, I mean it’s reactive. What stands out as the biggest innovation you have seen in this industry, like as a whole as total… I mean, Trados was one of them and you mentioned GlobalSight which was an amazing open-source initiative. What to you is important as an innovation?

Smith Yewell: Well, I think the biggest effect is the digital transformation more broadly and COVID only accelerated that we can imagine when we were getting involved so many years ago. At that time the way things were moved around those packages that I mentioned was intensely manual. The fax machine was still used, people were mailing packages of documents, so what’s changed? Well now that process is becoming not fully there yet, but entirely digital so that there is not an offline spreadsheet. There’s not an e-mail you have to go find where the instructions were. All of it is digitized and all of it is available no matter where you are in the world or any time of day. That’s the vision. We’re not completely there yet, but that’s what we’re working towards, and I think the most exciting thing for the future when we talk about where that goes is using the AI to help guide us on where those improvements could be most effective. There’s still too many steps in the process. As you mentioned process, you’re absolutely right. There’s too many steps in that. Take quality checks as an example. Most quality checks are still performed on a random sample basis. That’s highly inefficient. We should be able to take AI, and this is what we’re doing here at Welocalize. We’re using AI to predict quality based on history based on parameters, experience, and a whole variety of factors. Tell us where the risk is and let’s check that rather than take three more steps to check everything.

Sultan Ghaznawi: Welocalize, the company that you’re leading, is seen as an innovative model in our industry. I’m interested to hear what kinds of innovation do you lead through this organization. You just mentioned AI and quality control, quality checking, what other type of innovation is Welocalize leading?

Smith Yewell: There’s another interesting one. For years we’ve been involved with product localization teams. And product marketing for years in the beginning was not a group that we interfaced much with. They were expecting to do that through other sources because we were perceived as a localization provider, not really a capable marketing provider. Where we’re innovating now is we take that product localization experience and see a convergence with product marketing around what we call performance linguistics, meaning we can run algorithms, tone, style, sentence length, readability, all variety of parameters, and we can tie that then to performance data, Google Analytics as an example, and we can start to run experiments with our AI algorithms on what produces the best performance. So that’s an example of what I think a really interesting application of AI to drive better performance.

Sultan Ghaznawi: Smith, Innovation and change, they come both with risk. I mean any kind of change is uncomfortable. People like to do what they’re used to. I’m sure there are lots of people in our industry, executives, that have innovative ideas, but they’re scared of that risk of implementing those ideas. What do you say to them? Where should they start, and how can they embrace the change?

Smith Yewell: We’ve got 4-pillars in our company that we built everything on. They’ve never changed. Innovation is one of those, the others are customer service quality and global teamwork. So, innovations have been there from the very beginning. I would describe it as a wave, if we want to be on the edge of that wave, and that’s you’re right, that’s that. That’s not an easy place to operate. There’s a lot of risk there, and there’s a lot of investment. And some of that investment doesn’t work out, but you either riding that wave or it’s going to crash on top of you. That’s the way I view it, and you’ve got it. You’ve got to invest to do that, which is risky, but that’s what it takes to continue to be an animator.

Sultan Ghaznawi: And as an innovator, you also need to have certain visibility internally within the organization in terms of your capabilities, investment, and also externally what works. As you mentioned, there might be waves coming from outside the industry today. For example, Google, Amazon, Microsoft, they are leading those type of waves that eventually will hit us. How do you adapt to this changing environment?

Smith Yewell: Partnership. We’ve partnered with those companies and many more. For example in building machine translation engines, and through that we learn, we understand we can shape things together and that collaborative approach in our industries I thought from the very beginning would benefit us all working together and I still believe that now many of the things we do, for example, investment in tools are duplicated and if we could avoid having to do duplication, meaning use standard frameworks and standard exchange formats and interoperability structures, well then we can be more efficient. Both as a company and as an industry, so I would advocate for more of that.

Sultan Ghaznawi: Our industry is one of those that moves very slow, it’s well known, but it also suffers from extreme fragmentation. You just brought up, you know, interoperability and so forth. There’s effort duplication in every front, and it seems like very few companies talk to each other to or lead efforts to bring that interoperability and that harmony if you will. Why is that? Why is our industry so fragmented, Smith?

Smith Yewell: Years ago I was in a fun debate at one of our conferences myself and the CTO from SDL at the time, and the debate was my argument was that a walled garden is not what I mean by that as a closed technology structure, closed APIs, as an example, is not going to be the future for either a company or the industry, whereas companies who are selling those products of course they tip take a different approach. I believe that 25 years later that my theory has borne more fruit, as evidenced by the fact that there are no technology-only companies ranked by revenue in the top ten of our industry, or maybe even up 25 or even more. So, what is that telling us? It’s telling us that customers are looking for technology to solve a problem, but it’s the analogy of when I hire someone for my home I I’m not hiring them to bring a hammer I’m hiring them to build my house and that’s the view we take as technology relates to us and our customers. How can it be used to make it easier, more amazing, more consistent for the customer, and it could be any technology, including our competitors.

Sultan Ghaznawi: You just talked about it briefly, but I would like you to elaborate. I think it is clear now that technology is not just an enabler as you mentioned, but also a driver of business in translation and localization. I can’t imagine doing any kind of work without any type of technology. How should we embrace this shift into a total technology digital transformation and allow innovation to flourish in our industry?

Smith Yewell: Well, our vision is from intake all the way through invoice, but that is completely digitized. There’s no offline spreadsheet or tracker or status sheet or separate system that doesn’t speak to another system, so that’s all of your infrastructure in the cloud, HR, CRM systems, invoicing and accounting. I mean all of those speaking to each other. That’s true digital transformation. That’s our vision. With that, what we can deliver in terms of incremental innovation on top of that platform once that platform is in place is really exciting not just because we work with our competitors all the time with our clients. Very rarely does the client have only one provider, so we do have to collaborate. That’s what clients are expecting us to do with common platforms and technologies, because otherwise we will not keep up the explosion in content just continues the competition for resources, especially in the labor market now with inflation only continues, the quality of translators graduating is not exponentially increasing, so these challenges are only going to get larger as we go forward, and that’s going to require innovation.

Sultan Ghaznawi: Let’s shift gears and talk about scale, Welocalize is a considerably large LSP. What does that mean for innovation? Is it easy to innovate when you have the resources to do so? In contrast, what should a small language service provider do to become innovative?

Smith Yewell: There’s been several times in our history where we had great innovation ideas and we couldn’t do it because we didn’t have the money. Especially when you’re a small company, you’re doing this the best you can, but there are certain technologies that I can remember. In the beginning we were looking at some database technologies that that we would need and to buy a license was just out of our reach. We couldn’t afford it. So, as you get larger, of course you’ve got more profitability as a company as you grow, which creates greater flexibility to invest in technology. So that comes with growth. You’re right where we sit today because we’re a three hundred million company that gives us greater, more greater flexibility in terms of scale to be able to make investments. So that’s the difference between when we were much smaller and where we are today. It’s easier to make the investments.

Sultan Ghaznawi: Absolutely. Smith, do you think that as a reactive or responsive industry when we respond to other industries, demand our ability to innovate is limited to what is asked from us by our clients? We just mentioned technology providers and other platforms. Do we lack being proactive about innovation, I mean, do we have enough visibility to see what changes happen in the landscape in the next ten, twenty years to build those tools, those processes and those ideas within our industry ahead of them happening?

Smith Yewell: My conversations with clients, they are expecting greater leadership from our industry. They tell me you all are the experts you’ve been doing this for a long time. What are the best practices? What are the things we’re not thinking of? What are the things we might not even be aware of? Educate us on how to innovate and let’s collaborate to innovate together. So, the answer is a simple yes. We need to do a lot more in taking leadership positions both as companies and as an industry to drive innovation.

Sultan Ghaznawi: And where do you see that leadership lacking or being slow in our industry? What is the reason behind it for us to be to just kind of ride the wave when the wave is created from outside industries opposed to us creating wave?

Smith Yewell: I believe our industry associations could do more to bring us together around some simple things such as API’s and being able to whatever the best technology stack is for the customer, which could involve a whole variety of products. Whatever that stack may include that it’s easy to plug and play components. Even translation memory exchange still has in many cases significant loss when you make one of those changes which blocks freedom to make different choices, which is inefficient. So those are a couple of examples.

Sultan Ghaznawi: You mentioned GlobalSight earlier. I think that was one of the most innovative leadership examples in our industry from any organization trying to bring in interoperability and providing a tool for not just their clients, but also their competitors to deliver services in a much better way. Why do you think efforts in an open source and other type of efforts were for example, we’re talking about LISA, which was bringing QA as a, you know, harmonize QA, those things are not taking off? What is the reason behind it in our industry?

Smith Yewell: There are a variety of reasons. You’re right, our vision with GlobalSight was to benefit the industry as a whole, take a take it open source and we were the first to do that, and we’ve seen open-source products for example, RedHat and others be quite successful, and so we were trying to follow that lead and why hasn’t it been as successful as we as we hoped at the time. The first reason is because GlobalSight was one of the very first products on her industry. It was GlobalSky, there was Uniscape, there was Idiom, and these were all around dot com boom time with the vision that those products could revolutionize translation and what kind of challenges we run into once we took it open source, the first was that that technology was old. That that was really the biggest blocker there was 3 million lines of code. So, in older generation coding systems. So, to modernize, that required a whole lot of investment and we put investment in it ourselves, as did others. But the amount of investment to really take that to the next level is probably insurmountable.

Sultan Ghaznawi: Do you think that the time is right for our industry to push new initiatives in the opensource direction where we can build tools, probably backends, even standards if you will, because what we have today is definitely not up to date. It’s not up to the challenge for today.

Smith Yewell: Sure, take project management, which we all we all need. And what happens, everybody invests enormous amounts of money into their own project management systems, either developing on themselves, or separate systems offered by different providers and getting those again to communicate to each other, there’s no real way to do that efficiently. We know that because we acquire a number of companies and when we acquire those, of course they’ve got these systems in place. So, we’ve got first-hand experience on what do we do about that. And the answer the question again, can the industry and our industry associations do more for example, with an open-source project management system that could be used and contributed to, especially by small companies as they’re getting off the ground because they just don’t have the money to invest. I know we didn’t right so if the industry or our associations had an initiative to be able to offer that kind of system, especially to small companies, I think it would help those companies get off the ground. I think more companies is more innovative. I don’t think it’s counter to competition. Competition helps improve industry, so I think. Those were all positive things.

Sultan Ghaznawi: That’s a very good segue to my next question, and it’s about mindset. How do we get that mindset developed, the mindset for innovation developed in our industry? Everyone is comfortable doing what they know and have been doing for a long time. And innovation is about change that is not always easy or painless, so how do you develop that mindset for innovation inside your organization or within our industry?

Smith Yewell: I think it begins with curiosity. That’s the culture we try to create at Welocalize. First, it’s an insatiable appetite for curiosity and what could be different, what could be better and waking up every day and wanting to scratch that? That’s what we’re trying to create. That’s what intrigues me the most and why I’ve been in the industry for so long because I believe we are getting close but never really there. We’re always in a state of what if becoming more innovative, becoming more collaborative, becoming better service providers to our to our customers. So how do we, how we motivate that kind of innovative culture? That’s how we do it here at Welocalize and again some of those innovations work, some don’t. So, you have to have a culture as well of fail-fast that doesn’t work fine, let’s stop doing it and let’s start up another experiment.

Sultan Ghaznawi: Speaking of culture, it’s interesting because all the existing enterprise cultures, you know, reflect the old mindset of hierarchy of power, if you well. I think a lot of people confuse innovation with automation today, but it is about a lot more as we just discussed. It is about things being better and finding new solutions to existing and new problems. So, in a culture which is based on innovation, who is best positioned to lead this type of thinking inside an organization? Is it the responsibility of the leader? Where does it come from?

Smith Yewell: The earlier questions, not just about technology, it’s also about process. And in this question, it’s also about people, so I give you a summary of what I think has been a very innovative approach Welocalize has taken over the last couple of years. You’re right power in the organization traditionally was quite often defined by, well, how much headcount do you have. And the more headcount you have the higher you go in the organization. That begins to breakdown, especially in the context of innovation because bureaucracy creeps in, so Welocalize is put in place while things a very innovative career framework, which is also not title based and it’s also not quantity based, meaning we’ve got, for example in the framework, it’s called advanced professional track, and that’s for people who want to continue to advance careers but aren’t is interested in managing people so that they continued to grow and expand their career and be able to innovate, especially in development teams, because a lot of developers are not as interested in taking on personnel management. So how do we keep them engaged? These are all kinds of innovations that we’re making in our career framework on the people side. And then on the process side, the examples I mentioned and on the technology side, we just continue to experiment.

Sultan Ghaznawi: Smith, let’s talk about these innovations and how we perceive them. Things such as digital transformation, cloud adoption, virtual ops and so on are all innovations that were brought to us by players from outside of our industry, we briefly talked about that earlier.     What innovations have leaders in our industry championed that we should replicate such model? We talked about Globalsight as being one of them, what else stands to you that should be replicated?

Smith Yewell: I think that we can get off the plane anywhere in the world right now, and our cell phone works that didn’t used to be the case. I think that we should take that example and work collaboratively together as an industry so that that would be possible with any particular content type and that content type can flow through our workflow systems, our customer systems, our partners, external vendor systems, and it’s as easy as getting off the plane and it works. That would be the challenge that I give to ourselves and our industry.

Sultan Ghaznawi: Yeah, I think another analogy is a car. Regardless of which company you buy from the driving experience is the same, you don’t think about, you know where the steering wheel is when you buy another car, why should the experience between different translation companies should be different? And I agree with you, that’s a very good point. Now we mentioned earlier that people are scared of innovation people are scared of change, but more important people are scared that they might fail innovating not many people think about this, but innovation and failure or two concepts that are intertwined, I guess. Please explain to me how failure leads to success in terms of innovation.

Smith Yewell: Well, it’s iterative, so if there’s an expectation that it’s one and done, meaning you run an experiment and it works, then off you go. Of course, it takes many more iterations than that, especially in software development, but also in the behavioral aspects that go along with it. One of the things that we’ve learned through our digital transformation is that we call it the iceberg under the water, and the biggest portion of the iceberg in what we’ve learned is behavioral change, because jobs are evolving as jobs or as work becomes digitized, what’s expected of us? For example, in data analysis and data literacy and business intelligence literacy and using BI tools. Also, all of those things, so many years ago when I started, they weren’t even part of the process. And now for example, project managers might spend most of their day in those systems.

Sponsor: This podcast is made possible with sponsorship from Hybrid Lynx, a human-in-the-loop provider of translation and data collection services for healthcare, education, legal and government sectors. Visit hybridlynx.com to learn more.

Sultan Ghaznawi: Smith, on that note, you know traditional language service providers have been working with translators, editors, linguists, you know, which is what we all did and still do. To become innovative how can we help this workforce you that that you just mentioned and turn them into for example, data providers or data manipulators in the sense that we will be dealing a lot more with data rather than just language alone going forward? And in your opinion, how do we innovate our workforce?

Smith Yewell: In the digital world there’s only two ways that we’re communicating, or either typing into a box, or we’re speaking to a box. In our industry where we’re transforming content from that process into hundreds of languages, in some cases simultaneously, that changes the job, and I’ve seen because we have in-house translators, they’ve been periods in time where some really qualified people told me this isn’t just, this isn’t the job of find satisfying anymore. I give an example for the average translation task for Welocalize is less than 200 words. And for one of our biggest customers, we’re processing 60,000 tasks a month. So this is back to the FedEx example. This is an at scale logistical operation, moving packages from one place to the next. And how can we enable people to be efficient in that new environment? Especially back to your point on translators, which much of their job now is post editing using a machine translation tool to increase efficiency? Well, we’ve got to come up with ways to make that more interesting. We’ve got to come up with ways to provide context. We have to come up with ways to provide incentives. For example, on productivity, because many of these tasks when they are reduced to their to their smallest element, candidly, they can become boring to work on, so in in many cases inefficient to work on, meaning the resource is making less money. We’ve got a large training team internally, so what have we done about it? Our outreach and our training materials and number of training hours provided to external resources and just going straight up over the last couple of years, our investments in training and development has been one of the most significant areas of progress for Welocalize.

Sultan Ghaznawi: Are there roadblocks to innovation in the language services space? If so, in your opinion, what are they? How can we overcome them?

Smith Yewell: Well, the roadblocks are the traditional roadblocks. there’s time, and there’s money and the time to do it. You hear that quite often, I don’t have time to learn to learn a new way because I’m too busy with the way that I’ve always done before. So, it’s going to be a behavioral challenge. And then the money as it relates to not just an investment in the technology, but an investment in the training that I mentioned, and less the approach is comprehensive, including both of those angles. The technology in the training, we’ve learned the hard way as a company that the outcome is less successful.

Sultan Ghaznawi: Are there instances were innovation that you implement, that you see as something that will improve productivity, efficiency and so on, it’s the people who are supposed to be adopting them. For example, translators that are resisting that change because of so many things. Either they see that they’re not getting enough volumes as you mentioned earlier, or because, uhm, they just don’t like new technologies. They like to do things the old way. How do we overcome those type of roadblocks?

Smith Yewell: I think the training again just can’t be emphasized enough, and the ability of our process and our technology as things becoming smaller and smaller in terms of how we process tasks to make those interesting, especially in a in a world where inflation right now is there the biggest challenges we’re facing, especially the effect on that on wages where people can pick and choose what kind of work they want to do, and a lot of these tasks they’re choosing, I’d rather do something else. So how are we going to make that more interesting either by packaging it differently, structuring it differently, paying for it differently? All of those have to come into play to continue to innovate.

Sultan Ghaznawi: Would you say, Smith, that innovation drives business? And if it can be proven, how do you measure that or why of innovation?

Smith Yewell: Well, we use a variety of measures, simple measures are cost categories related to revenue. So, seeing operating leverage, meaning that you can produce more for less. The other categories, we might use our headcount, so for example, in IT we’re always looking for, there’s a cost to supporting an employee from an IT perspective, and that’s easy to calculate, how many… what’s the cost divided by how many employees? So, you know specifically what is the IT cost per person in looking at way, whether it be more innovative help desks, whether it be virtual assistants, or automation bots we’re using a lot of out of that in our workflow now to where we can use automation bots as a first-tier level of support in some cases. Those are different things we’re doing to both measure and improve innovation around investment costs.

Sultan Ghaznawi: When we’re talking about technology in particular, things that are new or innovative, do you see them as a threat in any way? I mean, can we do things better in a way that can cannibalize our business models and offerings as we offer today?

Smith Yewell: Yes, innovation is a threat because businesses that aren’t able to keep up don’t last, so that is a fact. For example, if you look at the three hundred million in Welocalize revenue now, roughly half of that is coming from business lines, service lines that we weren’t even in 10 years ago. And I would say the same thing will be 10 years from now and in some cases, we don’t even know what that’s going to be. That’s exciting area for us. Many of the things that we do today, for example, 10 years ago around patent translation around our different NLP offerings and in AI, all of these things, at least for Welocalize in the past in 10 years have been new service lines, new innovations, new experiments, and now significant parts of our revenue.

Sultan Ghaznawi: Let’s talk about the NLP evolution and Welocalize again happens to champion many of the services that it provides within our industry. Please tell me how did you decide which of these services is needed? Is it driven by clients demand or is it something that you innovate, and you create and then your clients realize that ‘oh this is something we could use to solve one of our existing problems, we never thought of that’?

Smith Yewell: It’s been both because the best-case scenario you don’t get it all the time, but the best-case scenario is where you’ve got a customer who’s willing to collaborate with you and because you know that come up customer has the demand, you can make the investment. It’s harder when you’re going to make an investment and hope it works, you don’t have a customer yet. So yeah, in a perfect world you have a customer and you do it together. And we’ve had both. So, when you have both in the area of NLP, you can take our history with machine translation, which is the new NLP technology, and then in our… in the two scenarios I’ve described in the digital world, you either typing into a box or speaking to a box. Customers, as that has grown have turned to, well it… I need that to be multilingual. And actually, that’s an NLP exercise, so who knows how to do NLP? Oh, our machine translation provider, because that’s an LP technology. And by the way, they’re also multilingual. So, customers in the last 10 years began to turn to us more and more as they grew interfacing with their customers with these new technologies, especially virtual assistance, chatbots, things like that. So, we’ve seen tremendous growth there, and we’ve invested heavily there. And we see that continuing to grow going forward.

Sultan Ghaznawi: What defines the characteristics of an innovative language service provider today, to you? I mean is it the technology, the way they do things, the way they’re perceived by their clients, or something else? What makes an LSP innovative?

Smith Yewell: I think the innovative LSPs of which there, there are quite a few. We’ve got some great companies in our industry doing very interesting things. What? How would I categorize the most innovative is where companies aren’t just innovating on a single product or a single service. We’re one of the five super agencies in our industry as an example. So, what are super agencies? How are they different? I think that we and others in that category, we’re able to innovate across the tech stack and across the workflow, ideally again from intake beginning work all the way through invoicing that and having that be entirely digital all the way to the resources themselves. So, for example, for a translator to get paid, it’s as simple as clicking one button. That’s where we can do some really exciting things, and that’s what that’s going to enable us to continue to scale as a company in as an industry.

Sultan Ghaznawi: How do you see this industry changing in the context of the present risks, threats, opportunities and changes that we observe?

Smith Yewell: One of the biggest challenges right now is security and the protection of data. So, in this digital world it’s all data and the threats that are only growing, the requirements around the regulations to that are only growing. We are a significant provider of life sciences services as an example and the regulations, whether they be GDPR or others, and moving data around are significant. So being able to invest for example in ISO certification around data privacy which we have done to be able to give confidence that we’ve got that covered, that’s an example where we’re also innovating.

Sultan Ghaznawi: Please, Smith, as we’re reaching towards the end of this conversation, I would like to hear your thoughts about innovation. What kind of advice would you like to offer LSP executives who are on the edge right now? They don’t know too much about innovation, they are constantly think about what is innovation?

Smith Yewell: I would encourage them to try what I just described. In a perfect world you got a customer, and you can build around that. We’ve been lucky to have that, but we didn’t have it in all cases. So you’ve got to balance the two to where you’re going to go out on a limb. When we decided to take GlobalSight open source, that was a seven-figure investment. It wasn’t as if we had a customer saying, well, I’m going to pay for that, so that’s an example you’ve got to do both.

Sultan Ghaznawi: That was a fascinating discussion, and, uh, I’ve learned a lot and I’m sure people listening also found ideas and takeaways that they can take with them and implement, think about and probably come back with questions. I would love to do this again Smith at some point and learn more about your experiences and with that I want to thank you for your time and sharing your thoughts with us.

Smith Yewell: My pleasure, thanks for having me.

Sultan Ghaznawi: OK, it’s time for my roundup of the interview and my analysis as to what has been discussed. Innovation is a concept that will drive the translation and localization industry in a fast, changing global business environment. Whether adapting to a change in process, policy, technology or responding to a catastrophe such as COVID, it will be innovation that will make or break successful language services providers. Welocalize the organization that Smith Yewell leads, has been a champion on that front and they have not just innovated, but they were one of the very few that were willing to share their success and innovation with the whole industry, which is very commendable. The best example is of course their open-source effort on GlobalSight, the translation management system that covered all aspects of translation project execution. Change and innovation requires investment and long-term commitment, but the rewards are clear with creating distinction and distinguishing your organization from the herd. Go ahead, innovate, and inspire others to do the same.  That brings us to the end of this episode. Innovation is one of the topics that I’m very passionate about and I’m very happy that I had Smith Yewell on this episode to cover this important area.

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