By Ian Henderson, CEO of Rubric

Lately I have been thinking a lot about the pricing model in the translation and localization industry. It was a topic of discussion at one of the GALA 2011 sessions in Lisbon, and it has come up lately in our internal discussions at Rubric.

As all in the industry are aware, there is a general concern among language service providers that, with technology, we are being squeezed to provide the same service for less and less. I believe one of the issues is the devaluation of the project manager role. Another problem is that LSPs, always trying to get the work, accept any conditions imposed on them, including fixed prices based on inputs.

Let me give an example. We are being paid $50 to translate 3 words into 16 languages. That is based on a fixed price. In such a case, the project manager fee for that will be $5. Go figure that out. Let’s just say the hourly PM rate is $60. That means the PM has 5 minutes to churn out this job, which includes:

1) Read request and digest it – 15 seconds
2) Reply that we can do the job – 15 seconds
3) Write a blanket e-mail to all translators and pray they are available – 15 seconds
4) Create 16 POs – 16 seconds
5) Extract files and put on system – 1 minute
6) Start job – 15 seconds
7) Respond to queries – no time allocated
8) Gather files up from translators – 15 seconds
9) Package files and send to client – 30 seconds
10) Issue invoice – 30 seconds
11) Make a cup of coffee to take you up to 5 minutes, because no way can you spend a total of 5 minutes on a job like this.

Lawyers and accountants charge by the hour, so why not LSPs? They also find economies by choosing who will do the work—a junior or a senior professional—based on the type of work required. In the case of LSPs, the client pays a flat rate regardless of whether a rookie or a project manager with 10 years’ experience does the work.

As the translation and localization needs continue to change, and LSPs are left with fiddly work of post-editing and testing, the current pricing model will not work. High volumes are required to sustain the project manager structure. Interestingly enough manufacturers are already feeling the pain; nobody wants to translate and test mobile apps as there is no money in it.

But will the current model change? Not anytime soon. However, the industry is changing dramatically now and discussions on pricing are increasing. Maybe with a groundswell, change will eventually come.