From back-office to direct clients: Idea Translations case study

Ahh… translations. A strong representation of the law of supply and demand. A way to connect nations and make history, and now a commodity accessible through common technology. As a translator, you might consider it to be art. As a customer, you might consider it a means to an end. As an LSP, however, it has to be the merging of both worlds.

We talked with Sergio Atristain of Idea Translations, a company that successfully navigated the waters of value-adding and is now thriving in the commoditized world of translations as an LSP.

Idea Translations started out as a back-office agency for larger translation companies — Sergio describes their role back then as a “factory of projects”. Then something unexpected happened. “We had a really big client, one of the biggest translation companies in the world, that was responsible for about 80% of our revenue,” he says. “This company changed their strategy and completely wiped us off their work routine.”

“We had a client responsible for 80% of our revenue. Then they changed their strategy and wiped us off their work routine.”

But it turned out to be a blessing in disguise. Over 10 years, the company evolved from a “factory” to an industry leader. They were forced to change to get themselves out of a situation out of their control. But what was within their control was their willpower to make their business work despite the challenges.

Compelled to find new clients, they looked inwards to find where their specialty lied. Since most of their work revolved around healthcare, the decision to invest in this niche came naturally. And, wanting to safeguard themselves against a similar predicament in the future, they decided to put an end to being just another link in the translation chain. It was time to go after direct clients.

They targeted companies that were of similar scope and scale as theirs: medium-sized businesses looking to expand that had been disappointed with their previous working relationships. The people they spoke with had the same maturity level as them, and their shared fields of action and experiences helped them bond well.

They quickly found that working with direct clients brought many advantages, but also involved a lot more effort. Focusing on your clients means understanding them much better and knowing their final purpose. You need to know what their problems are, and what solutions they need. The job is no longer about counting words and spewing them out on time.

Focusing on your clients means knowing their final purpose. The job is no longer about counting words and spewing them out on time.

Since most of their work was already focused on healthcare, they had a much better grasp of what U.S. laboratories and healthcare organizations needed. But everyone around them claimed they could offer the same, and all at the same “top-class quality”. In a market where clients aren’t always able to tell the difference, how do you stand apart from the competition?

Their solution was to invest in resources that could serve their clients’ needs, and not just in translation. “One client came with a particular challenge of training their nurses and office staff, and they approached us to create an e-learning course,” says Sergio. “We did a little bit of research and took on the project, having understood that this was a big space that would allow us to approach companies that needed to train their global forces but didn’t want to get into the hassles of instructor-led training. So that's how we started with the e-learning space.”

The strategy worked. “We had accumulated a number of assets that would help us simplify most of those projects and invested heavily in both technology and people who were able to tackle e-learning projects,” he says. “Now, we have a number of clients that hire us for e-learning projects as well as for healthcare.”

They stopped trying to service everything to everyone, and put all their efforts into getting to know their clients, learning more about their needs, and developing ways to make their life simpler and easier.

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But it’s not only small companies that can benefit from diversification. Sergio cites Transperfect as an example:
“It is one of those companies that have been able to capitalize on being a lot more than just a language-service provider,” he says. “They have understood that going beyond strictly translation services and into content management, adaptation, editing, and manipulation is a strategic step for the future.”

But the change from being a back-office to serving direct clients was not as simple as it sounds. There were many difficulties along the way, especially in terms of features and resources that became necessary to maintain the flow of their work.

Sergio mentions that one of the biggest issues they’ve had during this four-year adaptation period was the administrative side of it. Back when they were “a factory”, all they needed were translation project managers to manage the linguistic side of things. But with direct clients, they had to have people available at all times who had a vision, in order to predict their customers’ needs, people skills, and knowledge, to be able to discern what it is that the client really wanted, as sometimes they were not quite sure themselves.

Another setback was the fact that direct clients had many more requests, as they were not always able to cover certain adaptations by themselves. They could ask you to do the formatting or publishing, provide additional languages of entirely different regions, or ask you for information that you would not need to know otherwise.

Last but not least, the structure of orders has changed. “We have some clients that provide us with very, very small projects — I believe our ‘record’ was 50 cents,” says Sergio. “A project like that is going to make you lose money just through the admin work it requires.”

All of this obviously calls for tools that help you reduce manual work. “You need some type of project automation: automated PO creation, automated invoicing, and so on,” says Sergio. “Those are key factors that give you a competitive advantage over your more bureaucratic colleagues.”

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But the transition must be done with caution. “You can’t just hop from one system to another and make everyone go crazy in the process,” says Sergio. “There are many tools in the market, but some of these tools really complicate stuff.”

The company’s search for the perfect solution is far from over. “What keeps me up at night is trying to find a process that works for every project,” says Sergio. “This is a constant journey.”

This is Sergio’s story, but of course, your LSP might not need to take such measures. There are advantages to working as a back-office. According to Sergio, companies supplying other agencies with translation services have fewer marketing needs, your up-front investments aren’t as high, and it’s a lot easier to organize your workflow. It’s a project in, project out without much strategic thinking.

The downsides are that you depend on others to provide you with work. And since translations have often been treated as a commodity, you have to compete with others for your position, which might involve lowering your prices. Furthermore, your cut of the project is already smaller because you are only one piece of the puzzle.

But if you are able and willing to take the leap and expand, there is opportunity for growth, both economic and entrepreneurial, as well as personal fulfillment. As became evident through Sergio’s story, LSPs can provide more than a mere quantitative service but a whole value-adding offering. All they need to thrive is to stop thinking about selling and start focusing on solving their customers’ problems.