Guest article from John Walsh, Co-Founder of LocStep Vendor Management Solutions

For many, 2023 was a ‘year of efficiency’ that saw mass redundancies across the tech sector. Unfortunately, the outlook for 2024 indicates that we are not out of the woods yet – with the OECD,  WEF, and Morgan Stanley being just a few economic commentators predicting that global growth will continue to slow in the coming year. This slowdown heavily influences the money invested by VCs, as they are cautiously weighing risk due to the combination of lower growth projections and high interest rates. A recent Crunchbase report on VC lending has October down 24% in funding compared to October 2022. 

As startups and scale-ups no longer have access to the abundant VC money they had in previous years, the focus is shifting to that of profitability – meaning that companies are scrutinizing their costs across the board and are being more frugal and targeted in spending as they aim to lower both fixed and operational costs. The trickle-down impact of these macroeconomic factors is that companies are cutting costs through redundancies and hiring freezes, with many looking to avoid hiring altogether whenever possible. This is setting the trend across the industry of in-house Localization (l10n) teams significantly reducing in team size, meaning they are now adapting to a world where they need to operate in a much leaner environment, i.e., with reduced headcount and, at best, a flat budget for OPEX. 

Of course, having a smaller, leaner team is not the solution in and of itself – the work still needs to be done. Teams must innovate and find ways to integrate and leverage opportunities to automate, including AI, while continuing to push to mature their models to be seen as value enablers for their organization. 

This article will discuss several ways companies can continue to achieve their l10n goals in this harsher climate.

Lean Methodology to Maintain High-Performing Teams

The origin of Lean can be traced back to the Japanese automobile company Toyota. This methodology has gone through various iterations since it was first developed in the early 1900s – but in summation, it is rooted in maximizing value while minimizing waste. 

In today’s corporate world, the term ‘Lean’ is often used to describe a team with a reduced headcount that still performs operationally. Although the lean methodology may never have been applied, the outcome (a high-performing team) is achieved despite the input (an understaffed team). It is worth noting that this ability to maintain performance in a downscaled team that is still using wasteful processes can be to the detriment of the individual team members. The team is likely overworked and papering over the cracks to maintain performance – this is not sustainable.

To have a team that is true to the word ‘Lean,’ the entire lean methodology should be adopted to review and redesign the operations to reduce as much waste as possible, ensuring that any step that remains in the process is necessary and adds value. The lean methodology has five fundamental principles:

1. Define Value: Lean methodology focuses on understanding the value of a product or service from the end customer’s perspective. It involves identifying these specific values to shape and guide all processes and actions.
2. Value Stream Mapping: This principle involves mapping out the entire process of delivering a product or service from start to finish. Doing so makes identifying areas of waste, inefficiency, or unnecessary steps easier.
3. Create Flow: Lean aims to establish a smooth, continuous flow of work, minimizing interruptions or delays. This system involves optimizing processes to ensure a steady and efficient progression toward delivering value to the customer.
4. Establish Pull: Instead of pushing products or services into the market, lean emphasizes creating products based on customer demand. This principle involves producing exactly what is needed when it’s needed, reducing excess inventory and waste.
5. Continuous Improvement: Lean methodology is a continuous improvement process. It encourages ongoing efforts to refine and optimize processes, aiming for perfection even though it might be unattainable, always striving for better efficiency and quality.

Of course, even when automation is utilized- there remains a need for l10n teams. By maximizing automation where it makes sense, humans can focus on areas where they provide the most value. Operational work still needs to be done; teams must continue to innovate, integrate AI, leverage new technologies, find continuous improvements, and, most importantly, continue to push to mature their models to be seen as value enablers for their organization. All of this takes time (and headcount) to do. 

This leads us to the Fractional Team model. 

Fractional Teams to Bridge the Expertise Gap

One of the ways to adapt to the reduction in team sizes and stay within the theoretical limits of the Lean concept is to use Fractional teams. In the startup and scale-up world, more and more companies are looking to buy the specific expertise they need for the particular time they need it. Forbes has called it the ‘future of work’ and the ‘next age of business.’

Introducing fractional CMOs, CTOs, Sales leads, Content strategists, etc., is becoming customary in the startup world. Why hire a CTO on a full-time basis when all you need at this point in your lifecycle is a strategic direction for your engineering team to execute? Or why hire a full-time content manager when all you need is 10 hours of work from them a week? 

This approach is gradually permeating larger companies that are traditionally reliant on contractors. The downsides of contractor use – like co-employment risks and continual rehiring and retraining – make fractional support an attractive alternative. The fractional model allows companies and teams to buy specific skills to cover the gaps in their internal teams and has vast potential to free up internal resources (i.e., l10n Managers) to focus on more strategic initiatives and drive company-wide adoption of localization rather than having to focus all their time and energy on driving the operations of a l10n program. 

Traditionally, l10n teams are very familiar with outsourcing, heavily relying on language service providers to augment their teams by providing linguistic expertise and supporting services across dozens of languages. However, it is still common for these teams to be hands-on and heavily involved in the operations required to run their program, as many have stopped short of outsourcing a variety of other roles and tasks that remain an internal responsibility. And they still must hire internal team members to manage. 

There are several reasons why localization teams refrain from outsourcing more of their work, including the following:

1. Multi-Vendor Approach: Teams with a multi-vendor system have been inhibited from outsourcing work involved in managing and governing vendors due to a potential conflict of interest in having one vendor manage the work of a competitor. 
2. Single-Vendor Approach: for teams with a single-vendor model, there is often a need to have internal oversight of the operations so that there is no ‘vendor lock-in’ and to ensure that the company’s priorities are met. 
3. Comfort Factor: One of the most common root causes of why in-house teams are so involved operationally is the approach of setting up a program. Before a l10n program matures, i.e., before l10n tooling and workflows are in place, it is a manual process to extract, localize, and import translations for product and content teams. Only as l10n teams and processes mature can this manual involvement be reduced. But the comfort factor makes the old ways sticky – team members are comfortable running the operations unchanged since this brought success in the past. They tend to be reluctant to outsource/lose control and often retain the hands-on involvement longer than is necessary. 

However, with the introduction of fractional teams and specialized vendors like LocStep entering the l10n space, the opportunity to run a l10n program at scale, with minimal internal headcount, no conflicts of interest, and confidence that the buyer’s priorities are front and center – is fast becoming a reality. 

Utilizing the Localization Maturity Model as a Value Driver

A topic that has circulated in the l10n industry for many years is the Localization Maturity Model. This useful model aims to assist businesses in assessing their current localization maturity level and identifying areas for improvement. It details five stages of maturity:

1. Reactive: Workflows are ad-hoc; things get done as they surface, and there is a lot of uncertainty around roles and responsibilities without proper plans or strategies.
2. Repeatable: A limited number of established processes exist at this stage.
3. Managed: A noticeable shift towards formality and documentation is evident. Active management of localization and engagement with multiple vendors is apparent in operations.
4. Optimized: In this stage, localization operates within an optimized and proactively managed system. It is considered a priority for the company, where adherence to standards and processes is enforced, and internal tool-sharing is prevalent across stakeholders.
5. Transparent: At this stage, the company boasts well-established systems, processes, and tools that undergo continual enhancements and scaling. Localization is an integral element within the company, influencing product development and release planning.

Stages 1 to 3 can be classified as being within the service provider category for your organization. The longer your team stays in this area, the less influence and impact you will have at an organizational level. You are seen as transactional and a supporting function to the other teams in the company (perceived as more strategic). Considering the changes in staffing levels, it is easy to see how a team might get stuck at these stages. It can be due to a lack of bandwidth or an incorrect focus on the tactical areas, hindering the ability to elevate to stages 4 or 5. 

Worse still, it is also conceivable that a team regresses back into this service delivery mode from a more mature stage due to the loss of integral team members. It’s easy for people to confuse being busy (which you will be with an understaffed team) with making progress that matters. 

And yet, the inability to mature your l10n program will lead you into the tactical aspects of the role and guide you on a path of regression.

So, how do you achieve stages 4 and 5 of the maturity model and be seen as a value driver in your organization? Below are five tips:

1. Refocus your efforts on areas that only you/your team can do – drive strategic initiatives that span cross-functionally, or better yet, move the needle on organizational-level goals.
2. Build strong and strategic partnerships with cross-functional leaders.
3. Get involved in product decisions – don’t just attend the meetings – participate and give a global perspective.
4. If you still need help to be recognized, build alliances with other like-minded teams and act in unison.
5. Be prepared to have to earn a seat at the table.

To explore this topic further, catch up on Vistatec’s Localization Leadership series. 

The Changing Face of In-House L10n Teams

Given all the change and advancement in the industry over the last year, which will likely continue to develop further over the coming year – the modus operandi for in-house l10n teams continues to change and evolve. Thankfully, there is light at the end of the tunnel, as new and innovative ways exist to achieve set goals. 

While the entire landscape of l10n is undergoing a significant transformation, teams that can reposition themselves as value enablers within their organizations are the ones that are most likely to have long-term success.

To learn how Vistatec can tailor a localization strategy for your unique needs, contact us today.