textbook it sourcing strategy for localization companies ...buy/ outsource make or buy/ outsource...

42
Translation Workflow – Make or Buy? Textbook IT Sourcing Strategy for Localization Companies [email protected] 2005-10-22

Upload: others

Post on 13-Oct-2020

0 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

Translation Workflow – Make or Buy?Textbook IT Sourcing Strategy

for Localization Companies [email protected]

2005-10-22

Page 2: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

Source: ]project-open[, own elaboration, http://www.project-open.com/whitepapers/

Contents

CustomerRelationship

What to do? Why do it? How to do it?

InternalEfficiency

Skills &Resources?

Organizational

Change

Do we reallyneed this?

ProviderRelationship

Which Parts/Functionality?

Make or Buytextbook

Strategic or not?

Make caseBuy case

Adapt case

Explain & define „Workflow“

BizProcs

WorkflowDesign

What‘s in for me?

Make or Buy?

IT-Dept?Rumors, Hype,

Fashion IT Provider& Evaluation

Examples/Cases

ROI

CasesResources

WorkflowScoping

Eval Matrix

Page 3: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

Contents

Strategic or Not?– What is "Strategic"– IT is not "Strategic"– Translation Workflow Benefits– Translation Workflow Extensions– How to Differentiate?– Sample ERP Architecture– Strategic Modules

Summary– "Classical" – Value vs. Risk– "Skills" - Skills vs. Strategic

Importance

"Make" vs. "Buy" Sourcing Options

– Sourcing Options Overview – The case for "Pure Make" – The case for "Pure Buy" – The case for "Adaptation"

How to Decide– Summary of Decision Factors– Example of Decision Factors

Textbook Theory– "Classical" – Value vs. Risk– "Skills" - Skills vs. Strategic

Importance– "IT Depts." - Strategic vs. Efficiency– "Integration" - Modular vs. Dependent– "Ford Motor Company" Case

Suggestions– "Resource Dependence Theory"

Page 4: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Make" vs. "Buy"Sourcing Options

Sourcing Options Overview The case for "Pure Make" The case for "Pure Buy" The case for "Adaptation"

Page 5: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

Sourcing Options Overview

"Pure Make"

"Pure Make" (100% in-house)

"Make" with external consultants

"Make" with subcontracted functions

"Make", followed by spin-off

"Buy" from provider and customize in-house

"Buy" from provider, with financial investment in the provider

"Buy" from provider, but "nurture" provider with partnership and long-term contract

"Pure Buy" (100% external)

...

"Pure Buy"

Source: ]project-open[, own elaboration, http://www.project-open.com/whitepapers/

Page 6: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

The Case for "Pure Make"

AdvantagesTailored solutions for in-house needsCritical knowledge is kept in-house

DisadvantagesLack of knowledge of building and maintaining state-of-the-art IT systems.Difficulties of keeping the IT staff busy after the end of the implementation phaseDifficulty of retaining good IT staff

Customer CEO

ITOperationsFinance &Admin

TestDevelopmentProjectMgmt.

...

Project 1

Project 2

Project 3

Custo

mer O

rganizatio

n

...

Ownership

100% of the functionality is developed in-house

Source: ]project-open[, own elaboration, http://www.project-open.com/whitepapers/

Page 7: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

The Case for "Pure Buy"

Advantages"Economies of Scale": Provider can occupy resources with projects from other customers and share development and maintenance costs among customers.Provider may provide additional knowledge, gained from other companies in the sectorThe customer can profit from continuous development of functionality

DisadvantagesProvider interests may not fit fully with customer interests (roadmap development, functionality, …)The application software is more complex if it needs to fit more than one customer

Customer CEO

ITOperationsFinance &Admin

Provider CEO

TestDevelopmentProjectMgmt.

...

Project 1

Project 2

Project 3

Custo

mer O

rganizatio

nPro

vider O

rganizatio

n

...

Ownership

Ownership

100% of "the" functionality is developed by a provider

Source: ]project-open[, own elaboration, http://www.project-open.com/whitepapers/

Page 8: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

The Case for "Adaptation"

AdvantagesCritical knowledge is kept in-houseIn-house staff is able to react rapidly to company's needsBulk of non-strategic functionality is outsourced with more efficient providerFits with "Strategic or Not" section (see below)

DisadvantagesDifficulty to manage the partnershipIn-house developers need to learn the provider's software architecture

Provider CEO

TestDevelopmentProjectMgmt.

...

Project 1

Project 2

Project 3

Custo

mer O

rganizatio

nPro

vider O

rganizatio

n

Ownership

Buy 90% of the functionality and make 10% extensions

Customer CEO

ITOperationsFinance &Admin

OperationsProjectMgmt.

...

Project 1

...

Ownership

Source: ]project-open[, own elaboration, http://www.project-open.com/whitepapers/

Page 9: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

How to Decide

Summary of Decision FactorsExample of Decision Factors

Page 10: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

Decision Process

Factors:Bla bla blaBla bla blaBla bla blaBla bla bla

CorCoree

ComCom--moditymodity

AnxieAnxietiesties

SatisfaSatisfactionction

Market Test

Outsource

Insource

Smart Source

Recom-mendation

DecisionFactors

Theory

Page 11: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

Summary Decision Factors

Prod

ucse

rvice

1Pr

oduc

serv

ice 2

Prod

ucse

rvice

3Pr

oduc

t or

serv

ice 4

t or

t or

t or

The decisions depends on many factors:"Value" or "Impact": How much $$$ is involved in the sourcing decision

Relative effectiveness:How efficient is your company in building the goods, compared with a provider?

Ease of sourcing:Is it easy for you to find another provider?

Relative sourcing position:Is it easier for you to find a provider than for your competition?

Strategic or Not: Does the sourcing decision influence the possibility to build/lose sustainable competitive advantage?

Integrated or Modular:How tightly are the sourced goods integrated with the company?

Source: ]project-open[, own elaboration, http://www.project-open.com/whitepapers/

Page 12: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

The decisions depends on many factors:„Value" or „ Impact": How much $$$ is involved in the sourcing decision

Relative effectiveness:How efficient is you company to build the goods, compared with a provider?

Ease of sourcing:Is it easy for you to find another provider?

Relative sourcing position:Is it easier for you to find a provider then for your competition?

Strategic or Not: Does the sourcing decision influence the possibility to build/loose sustainable competitive advantage?

Integrated or Modular:How tightly are the sourced goods integrated with the company?

Mod

Not

Same

Easy

Verylow

Low

BadGoodOK

IntegMedMod

MedStra-tegicNot

BadMed-BadGood

DiffDiffEasy

HighHighHigh

This example uses a fictitious MLV translation agency with 20 employees, specialized on marketing material. Should they "make" their translation in-house? What should they do with the workflow?

Stan

dard

Tran

slatio

nMar

ketin

g

Tran

slatio

nW

orkf

low

Office

Mat

eria

l

The company creates "value", by training it’s in-house staff in marketing translations.Freelance translators with these skills are very expensive.

Freelance translators with these skills are very difficult to find.

Big translation agencies may have better access to the skilled resources

Big translation agencies may have better access to the skilled resources

A new translator has to learn a lot of knowledge upon joining the company

Decision Factors Example

Source: ]project-open[, own elaboration, http://www.project-open.com/whitepapers/

Page 13: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

TextbookTheory

"Classical" – Value vs. Risk"Skills" - Skills vs. Strategic Importance"IT Depts." - Strategic vs. Efficiency"Integration" - Modular vs. Dependent"Ford Motor Company" Case Suggestions"Resource Dependence Theory"

Page 14: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Classical" – Value vs. Risk

Leverage

Ex. Basic Production materials, packaging

Goal: Maximize leverage, standardize, consolidate volumes, reduce transaction costs

Routine

Ex. Office supplies, MRO, Administrative

Goal: Reduce activity, minimize transactions, supplier managed inventory

Strategic

Ex: Components that represent a competitive edge in marketplace

Goal: Form strategic alliances, partnerships, limited global sourcing

Critical

Ex: Very unique and "over specified" items

Goal: Reduce or eliminate

HighR

isk

Low

ValueLow HighSource: I-Ping Chou, Cristal Brun, Augusto Gamarra: "Supply Chain Strategies Part II"

Page 15: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Classical" – Value vs. Risk

Routine ItemsRoutine items are low-value activities which contribute little to the strategic direction of the firmImplement streamlining in the acquisition processPurchasing goal: Reduce the time spent by personnel in the firm on the acquisition, delivery, stock-keeping, and payment of these items

Leverage ItemsLeverage items are high-value activitiesFocus on short-term contracts and pursue a proactive supply strategy to find new substitute productsPurchasing Goal: Increase profit margin, use competitive purchasing practices to increase profitability

Critical ItemsCritical items are low-value activities with high exposure/riskStrategic items are high-value activities with high risk/exposurePurchasing Goal: Evaluate them for elimination

Strategic ItemsRequire the highest level of purchasing competence; consider long-term contracts.Total cost of acquisition must be monitored and controlledPurchasing Goal: Maximize competitive advantage

– Earlier time to market, Superior Product Quality, Rapid Innovations

Source: I-Ping Chou, Cristal Brun, Augusto Gamarra: "Supply Chain Strategies Part II"

Page 16: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Classical" – Value vs. Risk

LeverageEx. Basic Production materials, packaging

Goal: Maximize leverage, standardize, consolidate volumes, reduce transaction costs

RoutineEx. Office supplies, MRO, Administrative

Goal: Reduce activity, minimize transactions, supplier managed inventory

StrategicEx: Components that make a competitive edge in marketplace

Goal: Form strategic alliances, partnerships, limited global sourcing

CriticalEx: Very unique and "over specified" items

Goal: Reduce or eliminate

Ris

k or

Exp

osur

e

ValueLow H

Covers the global sourcing situation of a companyThe classic 2x2 sourcing matrixBeing tought in all MBA sourcing classes

- Very generic- Most major IT systems are

located in the "Strategic" sector.

There are few conclusions for IT sourcing concerning "Make" or "Buy", except that we have to keep digging.

Source: I-Ping Chou, Cristal Brun, Augusto Gamarra: "Supply Chain Strategies Part II"

Page 17: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Skills" - Skills vs. Strategic Importance

Str

ateg

ic I

mport

ance

Company’s Skills Related to Best External Source

Low

Low

HighHighEqual

Buy/Outsource Make or Buy/ Outsource

Tend to make

Tend to make MakeStrategic Alliances

Source: T. Rands: A framework for managing software make or buy. EJoIS, 1993, pp. 273-282.

Page 18: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Skills" - Skills vs. Strategic Importance

Str

ateg

ic

Import

ance

Company’s Skills Related to Best External Source

Low

LowHigh

HighEqual

Buy/Outsource

Make or Buy/ Outsource

Tend to make

Tend to make

MakeStrategic Alliances

Generic matrix, not only for IT outsourcing decisions The 2x2 is used forlarge corporations. It's not clear how it relates to SME's

Source: T. Rands: A framework for managing software make or buy. EJoIS, 1993, pp. 273-282.

Page 19: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"IT Depts." - Strategic vs. Efficiency

Operational Performance of ITAnxietiesAnxieties SatisfactionSatisfaction

Market Test

Outsource

Insource

Smart Source

Source: Adam Murray: Costing, Outsourcing and Contracts

CoreCore

Business Value of IT

CommodityCommodity

Page 20: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"IT Depts." - Strategic vs. Efficiency

When to Outsource reduce head countservice a "commodity"can’t afford time, $ for new techcan’t keep good staffdon’t have good staffsmall project

When to Insourcefunction is mission criticalis a core competencycannot identify any cost savingsnot clear that vendor is any bettervendor cannot be "controlled"

Source: Adam Murray, Costing, Outsourcing and Contracts

Page 21: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"IT Depts." - Strategic vs. Efficiency

Operational Performance of IT

Busi

nes

s Valu

e of

IT CoreCore

ComCom--moditymodity

AnxietiesAnxieties SatisfactionSatisfaction

Market Test

Outsource

Insource

Smart Source

Focuses on the experience that an in-house IT department doesn‘t fully satisfy expectations.The 2x2 is being usedin generic IT outsourcingdecisions in large corporations.

- The "Operational Performance of IT" measure depends on the track record of the IT department in a given area. This may be difficult to measure in the case of complex software development

Source: Adam Murray, Costing, Outsourcing and Contracts

Page 22: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Integration" - Modular vs. Dependent

Dependent for Knowledge &

Capacity

Independent for Knowledge &

capacity

Dependent for Capacity only

BEST OUTSOURCING OPPORTUNITY

WORST OUTSOURCING

SITUATION

CAN LIVE WITH OUTSOURCING

A POTENTIAL OUTSOURCING

TRAP

ITEM

IS

MO

DU

LAR

ITEM

IS

INTEG

RAL BEST

INSOURCINGSITUATION

OVERKILL IN VERTICAL

INTEGRATION

Source: Fine & Whitney, "Is the Make/Buy Decision Process a Core Competence?"

Page 23: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Integration" - Modular vs. Dependent

Focuses on "modularity"of the product or serviceCaptures the "dependency"of other systems in theproduct‘s company.

May apply more to the decison of how to source part of aproduct than to the IT "make or buy" decision. Also, the author further elaborates on the concept of "clockspeed" in the corresponding market which doesn't apply to IT sourcing decisions.

Dependent for Knowledge &

CapacityDependent for Capacity only

BEST OUTSOURCING OPPORTUNITY

WORST OUTSOURCING

SITUATION

CAN LIVE WITH OUTSOURCING

A POTENTIAL OUTSOURCING

TRAP ITEM

IS

MO

DU

LAR

ITEM

IS

INTEG

RAL

Independent for Knowledge &

capacity

BEST INSOURCINGSITUATION

OVERKILL IN VERTICAL

INTEGRATION

Source: Fine & Whitney, "Is the Make/Buy Decision Process a Core Competence?"

Page 24: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Ford Motor Company" Case Suggestions

High In-house solution

Cost sharing or strategic alliance/Selective outsourcing

Need for tailor-made

supportTrue spin-Off or outsourcingLow

Low High

Market Potential to provide the support

Source: Ford Motor Company Case: Supply Chain Strategy

Page 25: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Resource Dependence Theory"

High In-house solution

Cost sharing or strategic allianceDegree of

Resource Dependence

True spin-Off or outsourcingOutsourceLow

Low HighDegree of volatility

Source: Strategic Choice Framework for the IT Professional Resource

Page 26: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

Summary

"Classical" – Value vs. Risk"Skills" - Skills vs. Strategic Importance

Page 27: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Classical" – Value vs. Risk

Leverage

Ex. Basic production materials, packaging

Goal: Maximize leverage, standardize, consolidate volumes, reduce transaction costs

Routine

Ex. Office supplies, MRO, Administrative

Goal: Reduce activity, minimize transactions, supplier-managed inventory

Strategic

Ex: Components that represent a competitive edge in marketplace

Goal: Form strategic alliances, partnerships, limited global sourcing

Critical

Ex: Very unique and "over specified" items

Goal: Reduce or eliminate

HighR

isk

Low

ValueLow HighSource: I-Ping Chou, Cristal Brun, Augusto Gamarra: "Supply Chain Strategies Part II"

Page 28: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Classical" – Value vs. Risk

Leverage

Ex. Basic Production materials, packaging

Goal: Maximize leverage, standardize, consolidate volumes, reduce transaction costs

Routine

Ex. Office supplies, MRO, Administrative

Goal: Reduce activity, minimize transactions, supplier managed inventory

Strategic

Ex: Components that make a competitive edge in marketplace

Goal: Form strategic alliances, partnerships, limited global sourcing

Critical

Ex: Very unique and "over specified" items

Goal: Reduce or eliminate

Most IT decisions are

high-risk and high-value.

HighR

isk

Low

ValueLow HighSource: I-Ping Chou, Cristal Brun, Augusto Gamarra: "Supply Chain Strategies Part II"

Page 29: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Skills" - Skills vs. Strategic Importance

Company’s Skills Related to Best External Source

LowStr

ateg

ic I

mport

ance

Low

High

Buy/Outsource Make or Buy/ Outsource

Tend to make

Tend to make MakeStrategic Alliances

Equal High

Source: T. Rands: A framework for managing software make or buy. EJoIS, 1993, pp. 273-282.

Page 30: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

"Skills" - Skills vs. Strategic Importance

Company’s Skills Related to Best External Source

Str

ateg

ic I

mport

ance

Low

High

Buy/Outsource Make or Buy/ Outsource

Tend to make

Tend to make MakeStrategic Alliances

Do you have really good IT guys in-house?

Low Equal High

Source: T. Rands: A framework for managing software make or buy. EJoIS, 1993, pp. 273-282.

Page 31: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

Summary: Two Relevant Factors

Strategic or Not?

How good is your IT team?(Compare with the best external source)

Page 32: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

Strategicor Not?

What is "Strategic"IT is not "Strategic"Translation Workflow BenefitsTranslation Workflow ExtensionsHow to Differentiate?Sample ERP ArchitectureStrategic Modules

Page 33: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

What is "Strategic"

A strategy is a long term plan of action designed to achieve a particular goal [...].

Wikipedia

Goal:Sustainable competitive advantageSustainable superior margins

Examples that are known to work:– Size: Be the biggest– Price: Be the cheapest– Specialization: Be the best in a very specific field

Page 34: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

IT is not "Strategic"

Michael Porter claims IT doesn't provide companies with a competitive advantage:

To gain competitive advantage using IS and IT usually needs an element of surprise; the system needs to be out in the market place before competitors make a start in copying the ideaSustaining that competitive advantage requires either:

– Converting the technical advantage into brand advantage– Sustaining the technical lead by continuous product and

service development

Source: "Strategy and the Internet", Michael Porter, Harvard Business Review March 2001

Page 35: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

Translation Workflow Benefits

Strategic for you?

nononono

Improved general efficiency by 20%Demonstrate sophistication to customersImprove quality (process standardization)Take more informed project staffing decisions

Generic Translation Workflow is not "strategic" (according to Porter)...

You may need it anyway to match or exceed your competitor's "operational efficiency".

Source: ]project-open[, own elaboration, http://www.project-open.com/whitepapers/

Page 36: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

How do you compete?

BrandSalesforce ("presence")Proximity

Sales/Channel

Specialization on field, industry sector, value chain position,...Linguistic ResourcesUpward IntegrationHigh Quality

Specialization/Niche

PriceSize / economies of scale

Price

Capability to execute /Company SizeExecution SpeedCustomer ServiceOne-Stop shop

Service

...(?) ...

Page 37: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

Translation Workflow Extensions

Strategic for you?

maybemaybe

maybe

. . .

maybemaybe

Support for specialized processes?Managing knowledge in order to allow for synergies in very big companySpecial way to manage qualityAttract better freelancersManage existing knowledge. . .

You may have to extend your IT application using proprietary functionality in order to gain a sustained competitive advantage.

Source: ]project-open[, own elaboration, http://www.project-open.com/whitepapers/

Page 38: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

How to Differentiate?

Buy???(Minimize Cost)

???(Maximize Value)

Make

HighD

iffer

entia

tion

/ Str

ateg

ic v

alue

LowLow Cost of (Re)-Development High

Source: ]project-open[, own elaboration, http://www.project-open.com/whitepapers/

Page 39: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

Buy!???(Minimize Cost)

???(Maximize Value)

Make

DataWarehouse

Engine

How to Differentiate?

Diff

eren

tiatio

n / S

trat

egic

val

ueHigh

Low

Web Server

Database

SearchEngine

DataWarehouse

(Config)

Payroll

TranslationWorkflow

TimesheetMgmt.

ProjectMgmt

RecruitingWorkflow

Skill-DB

Accounting

FinancialControlling

L10nWorkflow Knowledge

Mgmt.

ContentMgmt.

CustomerPortal

CRM

Reporting

ReportingEngine

WorkflowEngine

QueryWorkflow

Sample Modules from ]project-open[

Support for specialized

process

Support for specialized

process

HighCost of (Re)-DevelopmentLow

Source: ]project-open[, own elaboration, http://www.project-open.com/whitepapers/

Page 40: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

TMIntegration

AutomaticInvoicing

Sample ERP

Architecture

OtherRoomReservation

E-Commerce

Surveys

Glossary Web-MailRecruitingWorkflow

SoftwareDevelopment

Templates

Trans-lation

CRMFinance

Controlling

HR

System

Mail ServerIntegration

ContentManagement

WebDAV

Blog

Collaboration,Content & KM

OOFrame

Security

ProjectMgmt.

Project &Subprojects

TranslationWorkflowPayroll

Skill Database

ProjectControlling

TimesheetMgmt.

ApplicationModules

Calendar

OpenACSPermission

Web Server

Database

FinanceBase

Filestorage

OnlineDiscussions

IncidentWorkflow

BasicAuthentication

LDAPAuthentication

WorkflowEngine

Chat

PackageManager

AutomaticSoftwareUpdates

PostgreSQL Oracle 8i, 9i, 10g

PageContracts

SQLTemplates

OO Model

ObjectMetadata

LocalizationFramework

ContactMgmt.

ReportingEngine

Wiki

Oracle Intermedia/TextTSearch2

Linux Solaris BSDWindows+ CygWin Mac OSOperating

System

SearchEngine

AOLServer PoundRevers Proxy

DynField Object

Extensions

PlatformServices

Profiling &Performance

DebuggingSystem

FormBuilder

Portal &Components

ApplicationServices

DB-APITCL

Quotes &Invoice

Payments

FinancialReporting

Mail ServerIntegration

CustomerWeb Reg.Freelance

Invoicing MarketingCampaignsTimesheet

Invoicing CRMTrackingCMS

AutomaticAudits

Full-TextSearch

ISDN TelIntegration

AutomaticTesting

SOAP &XML-RPC

CVS

BigBrotherSys Mgmt.

Postfix/Sendmail

Database Replication

MondrianData-

Warehouse

Source: ]project-open[, own elaboration, http://www.project-open.com/whitepapers/

Page 41: Textbook IT Sourcing Strategy for Localization Companies ...Buy/ Outsource Make or Buy/ Outsource Tend to make Tend to make Strategic Make Alliances Generic matrix, not only for IT

SoftwareDevelopment

Templates

Trans-lation

CRMFinance

Controlling

HR

System

Collaboration,Content & KM

OOFrame

Security

Calendar

OpenACSPermission

FinanceBase

Payroll

Skill Database

Filestorage

OnlineDiscussions

IncidentWorkflow

BasicAuthentication

LDAPAuthentication

WorkflowEngine

Chat

PackageManager

AutomaticSoftwareUpdates

PostgreSQL Oracle 8i, 9i, 10g

PageContracts

SQLTemplates

OO Model

ObjectMetadata

LocalizationFramework

ContactMgmt.

ReportingEngine

Wiki

Oracle Intermedia/TextTSearch2

Linux Solaris BSDWindows+ CygWin Mac OS

AOLServer PoundRevers Proxy

DynField Object

Extensions

Profiling &Performance

DebuggingSystem

FormBuilder

Portal &Components

Mail ServerIntegration

ContentManagement

DB-APITCL

Quotes &Invoice

Payments

FinancialReporting

Mail ServerIntegration

CustomerWeb Reg.

MarketingCampaigns

CRMTracking

AutomaticAudits

ISDN TelIntegration

ProjectMgmt.

Project &Subprojects

ProjectControlling

TranslationWorkflow

TMIntegration

FreelanceInvoicing

TimesheetInvoicing

TimesheetMgmt.

AutomaticInvoicing

Strategic Modules

Full-TextSearch

AutomaticTesting

BigBrotherSys Mgmt.

Other

CMS

WebDAV

SOAP &XML-RPC

Glossary

Blog

RecruitingWorkflow

CVS

Postfix/Sendmail

Database Replication

MondrianData-

Warehouse

RoomReservation

E-Commerce

SurveysWeb-Mail

Nothing butHeadaches

Possibly(!)Strategic

ApplicationModules

ApplicationServices

PlatformServices

Web Server

SearchEngine

Database

OperatingSystem

Source: ]project-open[, own elaboration, http://www.project-open.com/whitepapers/