Why LSPs should consider vendor management

Language Service Providers are starting to see the benefits of supply chain management. The increase in vendor management (VM) comes from more clients having more stringent localisation and translation requirements, pressures on pricing, and the significant diversity of the industry when it comes to language combinations.

Vendor management and CSA research

The CSA conducted research, where it interviewed over 30 language service providers to device a list of best practices for setting up vendor management within the industry. In order to assess the technology within the industry that supports VM, the CSA further attended demonstrations of the VM features of several translation management systems. Further, the CSA conducted an analysis of over 30 regional portals.

What the research found was that not all vendor management teams are equal when it comes capabilities and strength. How businesses arrange the function tends to affect their profitability and growth, and even the valuation of the business that investors calculate.

The CSA’s research helps both newer and smaller Language Service Providers set up a team who are dedicated to handling the function, while also enabling existing teams to optimise operations.

How strong is your vendor management model?

Many LSPs tend to use ISO 17100 certification to bolster claims of strength when it comes to vendor management. In the CSA’s research, it was found that there are broad variations in terms or the organizational maturity of the vendor’s function, regardless of certifications. Overall, the core purpose of VM is to aid the project managers to allocate resources with the right tools, availability, and expertise to each project, and within the desired rates.

What usually happens is that owner-operators will handle vendor recruitment, and then pass it on to project managers. Ultimately, a growing client and vendor base places steady pressure that leads to LSPs formalising the function. As the LSPs grow, the find themselves with a dispersed vendor management team that supports a range of goals.

So, LSPs eventually land up building vendor self-registration portals that will automatically feed their database with applicants. More mature vendors tend to make use of AI to automatically select the best vendor for any given project, and then make use of smart predictive models that help with capacity planning.

No matter what kind of vendor management model you use, it still requires strategic thinking and an effective process to respond to the various life cycle phases needed to build vendor relationships. This is where there tends to be the most different among LSPs. Some prefer to be prepared with tons of resources that are ready to go; and others rely on last-minute recruitment. What happens is some evaluate linguist’s skills on live projects and others use translation tests to vet their experts.

Whichever approach you prefer, it is the overall strength of the processes surrounding such decisions that make certain LSPs stand out above others.

Overall, though, the CSA research has found that regardless of an LSP’s preferred model, there is a shortage of fully trained talent at affordable rates. The CSA continues to conduct research on how LSPs quote on projects in order to develop vendor management systems.

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