Translation Bureau Benchmarking and Comparative Analysis - Final ...

www.pwc.com/caFinal ReportMay 15, 2012TranslationBureauBenchmarkingand ComparativeAnalysisFinal Report

Translation Bureau Benchmarking and Comparative AnalysisSome key characteristics of the Canadian labour market include:• The average age of those working in translation is higher than the Canadian workforce asa whole.• Statistics in Canada indicate that demand in the translation sector is higher than thenational average with lower annual attrition rates.• Demographics show a workforce with a higher than national average, post-secondaryeducation and income.• Approximately 62% of the translation workforce were in salaried positions, of whichapproximately 50% were full-time positions. This compares to approximately 33% ofself-employed translators that are working in full-time positions.While resources are fragmented, the supply of translation organizations and independenttranslators appears to be stable relative to demand. These micro-enterprises have low overhead,and as such, are able to compete aggressively on the basis of price and speed. The primary effectof this is in the apparent commoditization of translation services and its effect at providinglower costs services. The emergence of a number of large, multinational organizations and theirexpansion through acquisition of small or medium organizations will likely have an impact onlessening the fragmentation of the Canadian supply and exerting further downward pressure onprices.There are some indications that requirements for translation and interpretation services forother languages in Canada may emerge as Canada’s cultural diversity shifts and the degree towhich the Canadian government focuses on international trade.Page 5 of 43

Translation Bureau Benchmarking and Comparative AnalysisArea ofFocusClassifiedDocumentsKey ObservationsThere is capacity within the private sector to provide translation of securedocuments. The sole commercial language service provider thatparticipated in the study can provide services for Top Secret documents.This service was viewed as an investment that was necessary to secure workof this nature and there was no associated additional cost.The remaining organizations rely on senior translators and adherence tointernal security policy when managing the translation of securedocuments.Social MediaThere is little evidence of the use of translation for social media.Responsibility for translation rests with the content creators, which istypically the organizations’ communications function.OperatingModelAll the organizations leverage a hybrid model that provides contingentcapacity to meet additional demand. The exact blend of in-house vs.outsourced resources varies.1.4. ConclusionSome predominant themes have arisen from the work that we have carried out in conductingthis study. While this is not meant to be comprehensive, the following are key themes forconsideration by the Bureau.1. Enhancing the Bureau’s contribution to innovation. Our studies and interviewsexposed a lack of significant investment in the translation industry. The Bureau has anopportunity to examine the appropriate level of investment in activities that define andmeasure quality standards, as well as the further refinement of translation tools andtechnology.2. Measuring and refining the Bureau’s contribution to ensuring a continuingsupply of quality translation professionals. The Bureau is Canada’s largesttranslation service and does play a role in developing programs that encourage Canadiansto consider becoming a translation professional.The Translation Bureau plays a leadership role in the Canadian linguistic service industry. Ithas made significant contributions to building industry capacity in Canada as witnessed by theuse of Termium by Canadians and its efforts to attract new linguistic service professionals intothe industry. Based upon our discussions with the comparator organizations and from thereview of literature pertaining the global linguistic industry, the Bureau is not immune from thepressures on costs to delivery its services and the prices its clients are willing to pay.Page 7 of 43

Translation Bureau Benchmarking and Comparative Analysis2. Introduction2.1 BackgroundThe Government of Canada’s Translation Bureau (the Bureau) has launched an initiative knownas “Rethinking the Bureau”. The goal of this initiative is a review of the Bureau’s businessprocesses and service delivery model and is intended to secure the Bureau’s long term financialviability and maintain the quality of services provided to the Government of Canada.PricewaterhouseCoopers LLP (PwC) was engaged to conduct a benchmarking and comparativeanalysis study parallel to this review. The objectives of the comparative analysis study are toprovide:• Information and analysis on the capacity of the Canadian industry to meet national andgovernment demand; and• Benchmarks for good practices in linguistic services with other organizations ofcomparable size at the national and international level.2.2 Purpose and Structure of this DocumentThis document is the final report presenting PwC’s findings for the Benchmarking andComparative Analysis study. The report documents data and key findings reviewed by PwCthrough:• Document Reviews including key studies and reviews provided by the Bureau and/orparticipants;• Internet and/or library research focused primarily on trend and industryinformation;• Third Party Information from peer organizations, recognized industry associations ornational research bodies; and• Interviews completed to date with representatives from comparable organizations.The document is organized into the following sections:• Section 3 - Translation and Interpretation Services Sector Profile, bothCanadian and international. This section includes a review of service offerings within thesector, as well as information on industry size, structure and trends within the sector;• Section 4 - Overview of Comparable Organizations, including a summary of theinterviews conducted with external organizations;• Section 5 - Comparative Analysis, which addresses how the Translation Bureaucompares with the external organizations in a number of key areas; and• Section 6 - Key Observations, which draws some preliminary themes forconsideration by the Bureau in assessing its strategic direction for the future.For your reference, a glossary of terms is included in Appendix A.Page 8 of 43

Translation Bureau Benchmarking and Comparative Analysis3. Canadian Translation andInterpretation Services SectorThe following section provides an overview of the current state of the translation services sector,both within Canada and internationally. It provides a synthesis of information available throughstudies and publicly available sources, and highlights recent trends in translation services.Specifically, it includes:• An industry overview;• A description of labour force and business model characteristics;• A description of services offered;• An overview of supply and demand factors;• Information regarding costs and pricing;• An overview of technology usage; and• A summary of key trends.It is important to note that information specific to Canada is less readily available thaninformation on the global market as a whole.3.1 Industry OverviewAs a result of its two official languages and the demographics of its population, Canada is aleader in the translation market. With only 0.5% of the global population, it nonethelessrepresents approximately 10% of the USD 31 billion global translation market 1 . ReflectingCanada’s official language status, it is estimated that approximately 90% of translation inCanada is between French and English 2 .As an employer, the Canadian language services industry is estimated to employ 15,000translators, interpreters, terminologists, and localization specialists in 2010 3 .As can be seen in Figure 1, while the public sector represents a significant portion (17%) of theCanadian workforce, the majority (83%) are employed with the private sector firms providingcommercial translation services 4 . This suggests that there is significant capacity within theprivate sector, however a number of considerations need to be taken into account in order tovalidate this assertion:• During our discussions with comparator organizations, they indicated their ability toincrease capacity to meet additional demand by reaching out to a network ofindependent contractors or by increasing staff compliment if demand could be assured.It is unclear whether the supply of independent contractors that is leveraged by theorganizations is in fact, the same pool of experienced translators. While each providermay believe that they have access to this surge capacity, a significant increase in demandacross the industry may absorb this capacity quickly.1Source: ATA Chronicle – American Translators Association – October 20102Source: Found in Translation – Job Postings Canada3Source: ATA Chronicle – American Translators Association – October 20104Source: Economic Assessment of the Canadian Language Industry, The Conference Board of Canada – March 2007Page 10 of 43

Translation Bureau Benchmarking and Comparative Analysis• The reliability and availability of these professionals would need to be examined as theirpreferences for when and how the work may not align with the needs of the clients.• This capacity represents a point in time. The current demographic profile of translationprofessionals suggests that further pressure on supply will prevail in the near to mediumterm as these professionals retire. In effect, their older average age may be artificiallycreating a false sense of capacity because they are closer to retirement. If the number ofnew entrants into the industry continues to fall short of the annual increase in demand,and the supply of independent contractors cannot make up the gap, then managingsupply will become more difficult and time consuming.It is also important to note that an increasing supply of independent resources will continue tocontribute to maintaining or increasing the fragmentation of the industry. This, in turn, will alsoincrease the urgency and focus on establishing supply arrangements or contracting vehicles thatwould minimize the administrative burden to both the Translation Bureau and the varioussuppliers.Figure 1 - Canadian Translation Sector WorkforceWithin the public sector, the Government of Canada is by far the largest employer with 71% ofthe public sector translation workforce.It is also interesting to note, as indicated in Figure 2, almost half of the Canadian workforce isconcentrated within Quebec (49%) and almost a third in Ontario (31%). This is to be expectedgiven the heavy focus of French and English translation within the Canadian market.Page 11 of 43

Translation Bureau Benchmarking and Comparative AnalysisFigure 2 - Canadian Workforce Breakdown by RegionThe industry is global in nature 5 , with over 25,000 organizations that provide Language ServiceProviders (LSPs) in 152 countries. The international industry has the following characteristics:• The industry is distributed with pockets of concentration in Canada, the United States,Western Europe, Northern Europe, China, India and Japan. Each of these countries hasmore than 500 LSPs.• The market is highly fragmented, with the top 50 LSPs generating only US $4 billion ofthe US$31 billion market. Although we have as yet been unable to locate similar data forthe Canadian market, this perspective has been supported anecdotally in PwC’sdiscussions with industry.• 63.4% of LSPs expect to remain independent and grow organically, which suggests thatindustry fragmentation will continue. It is interesting to note that while only 18% ofLSPs would like to make one or more acquisitions in the near or mid-term, 50.9% areopen to business combinations (i.e. mergers, acquisitions) that would make themstronger in the marketplace.The LSP market is growing at an annual rate of 7.41%, and is expected to reach US$38.96 billionin 2014. Although technology is changing the revenue landscape of the industry, most of therevenue generated remains associated with translation services. Fifty-one percent (51%) of LSPsearn more than 70% percent of their revenue from translation. The fastest growing services, indescending order, are:• translation;• website globalization;• software localization;• on-site interpreting; and• multimedia localization.5Source: The Language Services Market: 2011 – Common Sense Advisory – May 2011Page 12 of 43

Translation Bureau Benchmarking and Comparative AnalysisInternationally, the majority of LSPs possess very small employee bases:• 69.3% have 5 full-time employees or less.• 92.4% have 20 full-time employees or less.• 0.6% have more than 100 full-time employees.Approximately 57% of LSPs have been in business 5 years or less, while only 6.4% have morethan 20 years of experience. As would be expected for a fragmented industry, and supportingthe notion that many of the LSPs are small micro-enterprises, 78.4% of LSPs are run by theirfounding owner.3.3 ServicesThe Canadian Translation Services industry is predominantly segmented into 3 areas 8 :• Translation, interpretation and terminology;• Language training; and• Language technologies.Of these three areas, there is very little activity in the language technologies space. While exactdata is not available for the Canadian market specifically, Table 2 represents, at a global level,the size and market percentage of the major services that comprise the language services sector.As can be seen from the table, translation services represent by far the largest service byrevenue.Table 2- Market Size and Revenue by ServiceService Percent 2010 Percent 2011Total MarketOpportunity2011(US$ M)Translation 43.3% 45.7% 13,370.18On-Site Interpreting 13.0% 14.4% 4,226.32Software Localization 7.1% 6.6% 1,917.95Website Globalization 4.9% 4.7% 1,380.33Multimedia Localization 4.0% 3.3% 957.91Translation Tools & Software 3.6% 4.0% 1,169.12Telephone Interpreting 3.3% 3.4% 994.18International Testing / QA 3.1% 2.4% 686.96Machine Translation Post-editing 2.8% 2.3% 680.56Internationalization Services 2.7% 2.3% 669.90Business Process Outsourcing 2.5% 2.3% 659.23Voice-over / Dubbing / Narration 2.5% 2.4% 689.10Transcreation 2.4% 1.9% 554.69Subtitling 2.1% 2.0% 586.69Interpreting Tools / Software 1.6% 1.6% 465.09Video Interpreting 1.2% 0.9% 260.288Source: Economic Assessment of the Canadian Language Industry – Conference Board of Canada – March 2007Page 15 of 43

Translation Bureau Benchmarking and Comparative AnalysisTable 3 details the percentage of global LSPs that derive revenue from the specific service area(e.g. 24.7% of LSPs derive 91-100% of their revenue from Translation service). There are a fewkey observations that can be made from this data:• Most LSPs are generating the 70% or more of their revenue from translation services.• Beyond translation many other LSPs generated less than 10% of their revenue from otherservice areas.• Software localization (21.4% of LSPs), website globalization (15.5% of LSPs), on-siteinterpreting (27.9% of LSPs) and multimedia localization (9.1% of LSPs) are the onlyother service areas that have a material portion of LSPs generating over 10% of theirrevenue from a service outside of translation.• Few, if any LSPs offer a full suite of services, with many “boutique” operations providingunique and/or specialized services.Table 3 – Revenue Breakdown by Services AreaService Area% of Rev.TranslationSoftware LocalizationWebsite GlobalizationTranslation Tools &SoftwareMachine TranslationPost-EditingTranscreationOn-Site InterpretingTelephone InterpretingVideo InterpretingInterpreting Tools &SoftwareMultimedia LocalizationVoice-Over / Dubbing /NarrationSubtitlingInternationalizationServicesInternational Testing &QA0% 5.7 36.5 35.5 67.0 62.3 62.3 38.0 66.3 75.2 81.0 44.4 55.5 59.7 61.7 62.41-10% 6.8 32.9 38.4 13.8 21.3 19.4 27.3 17.2 12.6 4.6 36.0 27.6 25.1 20.3 20.411-20% 4.2 10.0 9.6 2.2 3.1 2.3 4.9 2.3 1.2 1.5 6.1 3.3 2.6 3.8 3.021-30% 3.1 3.9 2.7 0.5 0.3 0.3 2.4 1.2 0.4 0.1 0.8 1.1 1.0 0.5 1.131-40% 4.2 2.4 1.0 0.8 0.3 0.3 1.6 1.0 0.1 0.1 0.4 0.5 0.1 0.8 0.841-50% 6.5 1.9 0.5 0.4 0.3 0.3 2.8 1.2 0.0 0.3 0.5 0.4 0.4 0.4 0.551-60% 6.6 1.0 0.4 0.4 0.3 0.4 1.2 0.1 0.1 0.0 0.3 0.0 0.1 0.1 0.061-70% 7.7 0.5 0.5 0.7 0.1 0.3 1.6 0.3 0.0 0.0 0.1 0.0 0.0 0.1 0.471-80% 12.0 0.5 0.1 0.5 0.4 0.1 1.5 0.1 0.1 0.0 0.3 0.1 0.1 0.0 0.081-90% 14.3 0.5 0.4 0.0 0.3 0.3 3.2 0.4 0.0 0.0 0.3 0.4 0.1 0.5 0.491-100% 24.7 0.7 0.3 2.3 0.4 0.1 8.7 1.4 0.1 1.4 0.3 0.3 0.4 0.1 0.1No Data 4.3 9.1 10.6 11.4 11.1 14.1 6.8 8.5 10.0 11.1 10.6 10.8 10.3 11.5 10.8Page 16 of 43

Translation Bureau Benchmarking and Comparative Analysis3.4 Supply and DemandA significant proportion of translation services are consumed by public sector organizationswithin Canada and internationally. In line with this, most translation services within Canadaand internationally are provided internally by various government agencies. Within theCanadian market, the Translation Bureau represents the largest single supplier by volume andsize.Specifically, for the private sector organizations providing translation services, Table 4 outlinesthe top ten global translation and interpretation companies 9 :Table 4 - Top Ten Global Translation and Interpretation CompaniesCompanyHQCountry2010 Rev.US$M Employees Offices Status1 Mission Essential Personnel US 588.00 7,494 20 Private2 HP ACG FR 460.00 4,200 15 Public3 Global Linguistic Solutions US 435.00 339 9 Private4 Lionbridge Technologies US 405.20 4,500 40 Public5 Transperfect/Translations.com US 252.44 1,268 66 Private6 SDL UK 245.09 1,800 60 Public7 L-3 Linguist Operations & TechnicalSupportUS 167.00 1,016 1 Public8 STAR Group CH 145.00 850 43 Private9 Euroscript International S.A. LU 124.13 1,350 16 Private10 ManpowerGroup US 101.11 324 11 Public9Source: The Language Services Market: 2011 – Common Sense Advisory – May 2011Page 17 of 43

Translation Bureau Benchmarking and Comparative Analysis3.5 Cost and PricingSpecific quantitative data on industry costs and prices has thus far been largely difficult toobtain or unavailable. Figure 6 illustrates the distribution of cost per word for translationservices globally 10 . As can be seen from this data, almost 80% of providers charge less than$0.15 / word for their services.Figure 6 - Cost of Translation Services per word (USD)3.6 TechnologyAccording to a 2008 Study by the American Translators Association 11 , the three most commonlyused technology tools are:1. Word Processing Applications (98% usage);2. Translation Memory (47% usage); and3. Terminology Management Software (27% usage).Some key data and trends in translation technology and technolinguistic tools are:• The Translation Software market represents US$575.5 million of the market in 2010 –revenues are anticipated to reach US$3 billion by 2017 12 .• Word processors notwithstanding, translation memory remains the most commonly usedtechnology and will be for the foreseeable future as quality concerns around othertechnologies prevent widespread adoption. It is worth noting however that translationmemory is still not universally adopted, leaving the industry with a high reliance onhuman labour.10Source: The Language Services Market: 2011 – Common Sense Advisory – May 201111 Source : Summary of ATA’s Latest Translation and Interpreting Compensation Survey - 200712Source: Language Translation Software Market Shares and Forecasts, Worldwide, 2011-2017 – Market Research – January 2011Page 18 of 43

Translation Bureau Benchmarking and Comparative Analysis• Machine translation, although a key productivity enhancing tool, is generally notconsidered to produce a level of quality sufficient to correctly convey a full message inanother language, and its output must be reviewed by a qualified translator 13 . As a resultof the significant post process editing, machine translation is not widely adopted. It isgenerally used for large volume translations with an accuracy rate of 75% to 85%.• Human Assisted Machine Translation (HAMT) is growing in usage. A 2009 study byCommon Sense Advisory indicated that HAMT doubled the translation output thathumans could do alone and was 45% cheaper.In general, innovation in the industry is extremely limited as fragmentation preventscollaboration and investment in key transformational technology. Translation service buyersare acting as the driving force for technology changes. Broadband and web proliferation isopening the market to a larger pool of translators providing on-line translation servicesassisted by machine translation. The aggregated effect is a downward pressure on translationprices as more suppliers enter the market 14 . Appendix B provides an outline of somecommon linguistic tools.3.7 TrendsA number of important trends and challenges are emerging within the translation industrywhich are affecting how services are delivered, as well as the cost of delivering these services.We have grouped the trends into three main components;• Technology;• Services and resources; and• Translation languages.3.7.1 TechnologyIt is interesting to note that many of the identified trends are all either directly or indirectlylinked to technology. Significantly, these trends continue to evolve as the applications andtechnologies expand and mature. Tools such as translation memory are now significantenablers supporting translation services and driving greater efficiencies. In addition toimproving machine translation, a number of community and on-line services are becomingmore broadly utilized. Table 5 highlights some of these key trends in the industry.13Source: Canadian Translators, Terminologists and Interpreters Council14Source: State of the Translation Industry - MyGengo - 2009Page 19 of 43

Translation Bureau Benchmarking and Comparative AnalysisMachineTranslationHybridtranslation /“post-editing”Communityand “crowdsourced”translationsThe expandingpieTable 5 - Key Emerging Trends 15• Has been around for over 50 years.• Not considered sufficiently mature to provide the desired level of accuracy and reliability.• Low cost – many free services are available (e.g. Google Translate, BabelFish).• Deemed effective for many informal situations.• Technological advances have improved quality and accuracy and machine translation isincreasingly being incorporated into traditional translation processes as an enabler ofincreased efficiency.• Technological advances have improved quality and accuracy and machine translation isincreasingly being incorporated into traditional translation processes as an enabler ofincreased efficiency.• Increased demand for “post-editing” services where translators proofread and editautomated translation results.• Proliferation of volunteer-based translation sites – provides near-perfect translation at nocost.• Machine translation websites are leveraging their communities to improve the quality oftranslations via providing options for users to “contribute a better translation”.• Translation services are being demanded by a much larger group of customers.o Services are more accessible.o Users want different forms of content translated – emails, blogs, tweets.• Last decade has seen an explosion of informal content published and shared online –content not well served by traditional lines of service because of its volume, informalnature, and lower commercial value.• Increasing need from users to balance efficiency, easy integration and price.3.7.2 Services and ResourcesThe Canadian translation sector continues to face challenges. Industry fragmentation continuesto be prevalent. It would appear that the combination of low visibility for the industry andindividual choices by translators to work independently has created challenges in therecruitment of new resources to fill vacancies created by retiring translators. In terms ofworkforce demographics, the labour market appears to be transitioning year over year fromsalaried to self-employed.Given the supply and demand for translation and linguistic services, there appears to be aninsufficient level of investment in research and development to strengthen the infrastructure(tools, technology, and resource development) in Canada. This can be directly attributed to theunder-investment based upon the fragmented nature of the industry and the difficulty for small“mom-and-pop shops” to invest in the necessary tools and technology.Table 6 outlines some of the key service and resource related challenges.15Source: State of the Translation Industry - MyGengo - 2009Page 20 of 43

Translation Bureau Benchmarking and Comparative AnalysisIndustryFragmentationLack of visibilityWorkforce ChurnInvestment inresearch anddevelopmentIndividual choicesand motivationDynamics of supplyand demand3.7.3 Translation LanguagesTable 6 - Key Industry Challenges• Estimated number of translators, interpreters, terminologists, and localizationspecialists - 15,000.• Majority of industry are small enterprises.• A large number of small contracts.• Globalization will reduce fragmentation, but not for the near-term.• Canada's language industries are largely unknown in Canada and abroad.• Low level of knowledge about employment opportunities in the field.• Approximately 1,000 new translators are needed each year to meet demand andreplace retirees.• Under-investment in research and development.• Lack of economies of scale (i.e. fragmentation) does not support the financialbenefits needed to support the investment required.• Global organizations are able to make the necessary investments in tools andtraining.• Canada risks losing its linguistic infrastructure without investment.• Low profile of industry experiences challenges in attracting talent.• Occupational profiles and education programs not widely promoted.• Predominantly influenced by the public sector as it is the major consumer oftranslation services.• Inconsistent revenue streams and complicated management requirementsattributed to government acquisition policies that are complex, has resulted in fewprivate sector suppliers to supplement in-house work performed by the governmentand a general focus of private sector suppliers on private sector demand.Internationally, there has been significant growth in multilingual translation and inlocalization 16 . The industry is expected to grow at an annual rate of 7.4%. International tradeand the growth of global content, such as for websites and multimedia, remain stronglycorrelated to high-growth industry sectors and language pairs (e.g. Chinese to English). Chinesetranslators in particular are in high demand.Specific to Canada, the country’s increased diversity is increasing the demand for languagesother than French and English 17 .3.8 ConclusionThere continues to be increase in the demand for translators despite the use of automatedtranslation and increased productivity 18 of existing professionals.Both globally and in the Canadian market, demand for less common languages is increasing andwill continue to drive growth, as will demand for web and multimedia services. Suppliers faceincreased time pressures from translation service buyers.Although industry fragmentation will be the norm for years to come, industry consolidation is,and will continue to be, significant. More mid-sized and small LSPs (i.e. revenue of US$516Source: The Language Services Market: 2011 – Common Sense Advisory – May 201117Source: Found in Translation – Job Postings Canada18Source: Translators, Terminologists and Interpreters – Service Canada – December 2010Page 21 of 43

Translation Bureau Benchmarking and Comparative Analysismillion per annum) are initiating consolidation activity. Globalization continues within theindustry with more and more small and medium size LSPs diversifying globally.It is expected that industries depending on quality, service and confidentiality, such as thepublic sector and regulated industries, will continue to rely on traditional translation services.Their focus will be on streamlining the translation process and implementing enablingtechnologies to increase quality and increase timing and cost efficiencies.Page 22 of 43

Translation Bureau Benchmarking and Comparative Analysis4. Overview of ComparatorOrganizationsIn order to collect data on other organizations with which the Translation Bureau could becompared and benchmarked, representatives from a selection of Canadian and internationallanguage service providers were interviewed. Interviews were conducted with five Canadian andthree international organizations. This section is intended to provide an overview of the outputof those interviews. Table 7 provides a profile of the eight organizations that were interviewedas well as a profile of the Translation Bureau.4.1 ServicesThe primary focus of the organizations interviewed is the delivery of translation services, withsome revision, editing and localization. Interpretive services are offered within Organization #7and Organization #8, however in the case of the Organization #7, they are managed by anentirely separate group. While Organization #5 does not provide interpretive services, the groupdoes manage contracts for the provision of interpreters for the organization.Other services offered included:• Preparation and delivery of summary translations;• Terminology;• Translation for websites; and• Issuance of opinion on third party translations.Only two of the organizations interviewed provide services to external parties, and of those, onlyone could truly be considered a commercial service. Organization #1 provides translationservices within the firm, as well as to clients of the firm. Their services are not commerciallyavailable to other third parties.The volume of work ranged from 650,000 words to over 600 million words. As one wouldexpect, the organizations within Canada predominately managed translation between Frenchand English, whereas the international organizations were required to manage translationbetween the official languages of their respective organizations.Page 23 of 43

Translation Bureau Benchmarking and Comparative AnalysisTable 7 - Comparable Organizations InterviewedOrganizationCanadianRelevance to Study# ofLanguageProfessionalsServicesAnnual Volumeof Work(Millions ofWords)% of WorkDeliveredby ExternalSuppliersOrganization#1• Large service provider• Translation of financial andregulatory documents≤ 50• Translation(English → French)18.5 67%Organization#2• Translation of legal documents ≤ 5• Translation (English ↔French)0.65 33%Organization#3Organization#4Organization#5InternationalOrganization#6• Large internal service provider• Translation of financial andlegal documents• Large service provider• Public Sector organization• Translation of financial andinsurance documents• Public sector organization• Translates laws and reports≤25≤75≤25≤50• Translation (English →French)• Translation (English ↔French)• Text revision• Localization• Editing• Translation (English ↔French)• Editing• Proofreading• Concordance check• Linguistic advice• Co-ordinate foreignlanguages• Manage contracts forinterpretation services• Translation• Interpretation20 20%35 variable10 40%6.4 20%Organization#7• Public sector organization• Translates laws, policy papers,and reports≥500• Translation• Interpretation• Verbatim Reporting• Editing• Proofreading• Copy preparation• Summary records113 25%Organization#8• Public sector organization• Translates laws, policy papers,and reports≥1000• Translation• Summaries of documents• Oral summaries• Terminology services• Web services686 27%Translation BureauTranslationBureau• Public sector organization• Translates laws, policy papers,and reports• Largest provider of translationservices within Canada1200• Translation• Editing• Revision• Proofreading• Interpretation• Terminology• Professional andAdministrative Services420 43%Page 24 of 43

Translation Bureau Benchmarking and Comparative Analysis4.2 Operating ModelThe organizations also have a similar approach to their operating model, operating in a hybridmodel. All retain an in-house capacity, and maintain a roster of external suppliers that allowthem to increase their contingent capacity to meet additional demand or to respond to specificrequests. The exact blend of in-house vs. outsourced resources does vary betweenorganizations; however they are generally consistent in their overall approach to the use ofexternal resources:• Documents that are classified, or may be considered highly sensitive are usually deliveredthrough the use of in-house capacity.• Whenever possible, the priority is to ensure that in-house resources are engaged intranslation work before using external suppliers to provide capacity on demand.Table 8 provides further detail on the criteria that the organizations use in determining when toengage external resources. Organizations not listed in the table did not provide specific criteriafor using external resources beyond the approach outlined above.Table 8 - Criteria for Use of External ResourcesOrganizationOrganization#1Organization#4Organization#5Organization#6CriteriaExplicitly expressed a preference for outsourcing as much as possible as itprovided significant cost savings.Targets the use of in-house resources for approximately one-third of its workand staffed accordingly.A number of factors are considered including the customer, deadline, andcompetency or special knowledge required for the translation, however thereis no standard policy.A number of factors are considered including the availability of internalcapacity, complexity, length, and deadline.The organization has made an effort to eliminate overtime in order to supportwork/life balance for employees; if a translation order has a short deadlinethat can’t be moved, the organization will rely on freelancers in order to avoidovertime.If a piece of work requires special knowledge or expertise, it is usually donein-house by employees that possess the organizational understanding tocomplete the work.Demand drives usage; external suppliers are used to deal with peak periods.External resources are used to support translation of a specific set of reportswhere cost reduction was explicitly requested.Page 25 of 43

Translation Bureau Benchmarking and Comparative AnalysisOrganization#7Maintains a target for its use of external resources. The policy is based oncapacity.Policy is that internal resources were to never operate at full capacity. Internalresource utilization is set at 80%, to be supplemented by temporary resourcesas required. This allows the organization to maintain internal flex capacity.The ability to secure additional resources is not considered a major impediment, with mostorganizations feeling that they could easily accommodate at least a 10% increase in demand. Inone case, a service provider felt that they could increase capacity by over 50% because of astrong subcontractor network. Staff complements of the organizations that were interviewedranged from 3 to over 1400 FTEs.Depending on the organization, and the document that is being translated, the translateddocument may be reviewed for style, accuracy and terminology. A key observation is that thereis a significant amount of variation in how each organization manages its quality assurancefunction. In some cases, quality assurance often relies upon the skill of the translator, ratherthan being a separate function within the process. With some exceptions such as certified orlegal documents, quality is not considered as important to clients as cost. In these instances,quality is expected by clients and therefore it is not considered a differentiator. At the other endof the spectrum, for legal or certified documents, quality is critical and clients are often willingto pay a premium to ensure quality. It is also important to note that each of the organizationsdoes track the quality performance of its outsourced suppliers and often give priority to itspreferred suppliers based on the quality of past work.4.3 Price and PerformanceCollection of quantitative data regarding organizational costs and prices has proven to be achallenge. Of the eight organizations interviewed, five were unable or unwilling to share theircost and price data.Despite this gap, there is an important observation worth noting with respect to how theorganizations manage the pricing and funding of their services. Four of the eight organizationsmandate that their translation service be used by the business units in order to translatedocuments. As such, those four translation services are fully funded, and do not engage inchargeback to the client for any translation.The three organizations that were able to provide pricing information billed clients in the rangeof approximately $0.23 - $0.65 / word, with two of the organizations being at the high end ofthat rate. This was acknowledged as being above the market rate, however these are bothorganizations that exclusively deal with specialized documents or documents that requirecertification, hence the rationale for the higher-than-market rateDespite the challenges collecting cost data, performance data was collected from theorganizations. This data reflects the productivity that is expected by the organization from itstranslation professions. The data was normalized to reflect words/hour for an “intermediate”-level interpreter. The productivity values range from 195 words/hour to 333 words/hour asoutlined in Table 9.Page 26 of 43

Translation Bureau Benchmarking and Comparative AnalysisOrganizationCanadianTable 9 - Productivity Ratios at Comparable OrganizationsProductivity Ratio (Words /hour)Organization #1 250Organization #2 333Organization #3 267Organization #4 333Organization #5 ~195InternationalOrganization #6 300Organization #7 242Organization #8N/A4.4 Specialized DocumentsOnly two Canadian organizations handle classified government documents. One organization’sfacility is site cleared to Top Secret, and the cost of that facility has been amortized over a longperiod of time. Both organizations employ translators that have been security cleared to therequired level, and translators working on classified documents are required to work within theoffice, or at the client’s site rather than working from a home office. There is no price or costdifference applied for the translation of these documents.The international organizations also handle sensitive or classified security documents. Oneorganization’s approach is similar to that of the Canadian firm, with special facilities in whichthe translation must be completed. The other two relied on their in-house employees forsensitive documents, with documents of a particularly sensitive nature being assigned to verysenior resources with the requisite experience and context.A common theme among all the participating organizations was that document complexity wasnot a factor in either cost or productivity. Document length was considered the primary driverfor cost. As stated above, the organizations have productivity thresholds that their translatorsare expected to meet. The background and experience of the individual translators is relied uponto provide the specialized knowledge to translate more ‘complex’ documents rather thanallowing an extra time allotment for completion of the translation.Page 27 of 43

Translation Bureau Benchmarking and Comparative Analysis4.5 Technology / Linguistic ToolsAdoption of technology among the organizations varies significantly. Given the cost and effortrequired to build and maintain the tools, and the variance in organization size and budget, thereis an emerging theme that only the larger organizations invest in developing or acquiringtechnology and tools.Translation memory is used within a number of the organizations in order to improveproductivity and is considered successful. However, most organizations have not yet moved toincorporate machine translation into their processes. Most do not foresee machine translationbecoming a part of their translation process in the near term, as it has not sufficiently advancedto the point where it is can be used reliably. However, there was a general acknowledgment thatas little as five years ago, translation memory was viewed with the same perception.All the organizations maintained or used some form of terminology repository, with “Termium”being specifically identified as a repository that was used by at least one of the Canadian firms.With the growth of global organizations, and the projected six-fold increase in the size of thetranslation software market, it is reasonable to expect that there will be significant increase inthe uptake of technolinguistic tools within the market as a whole. This has the potential tosignificantly impact the role of the translator, with the translation becoming less of a creativeprocess and more of an editorial endeavour where the translator spends the majority of his orher effort revising machine translated output.Use of these tools is currently at the discretion of the translator, however the trend is to formallyintegrate them into existing process to drive consistency of translation as well as improvetranslator efficiency.4.6 Emerging TrendsThe following are some of the key trends that were identified by the interviewees:• The influence from large global translation firms appears to be increasing and could bedriving prices down. In addition, these organizations have resources and infrastructureto invest in and maintain stable and reliable translation resources and services on aglobal scale. They are often able to deliver in a timely, cost-effective manner.• Quality is assumed within the market, and is not seen as a differentiator betweensuppliers, except in limited circumstances such as certified documents, legal documentsor documents with a high degree of visibility or sensitivity. To a large extent, the onus hasbeen placed on the translator to self-monitor and deliver a high–quality document, andon the client to identify issues in lieu of a robust quality assurance function.• There is an improvement in the quality of machine translation and translation memory.While not yet ubiquitous, the tools are seeing greater adoption but not at the expense ofhuman resources. The profile of the translator over the next five years will be someonewho can combine linguistic skills and computer skills. The belief is that the model is“translator and machine” rather than “translator or machine”.• Within Canada, it is felt that competition is increasing, resulting in downward pressureon rates, while the level of quality is improving. Commercial service providers findPage 28 of 43

Translation Bureau Benchmarking and Comparative Analysisthemselves in a position where they are delivering a higher quality product faster, butwith lower revenue.• At present, PwC did not find any provision of translation services for social media. Theorganizations interviewed indicated that the translation responsibility rests with theorganization that was creating the content and not with the translation services group.This is generally the communications group of the organization.Page 29 of 43

Translation Bureau Benchmarking and Comparative Analysis5. Comparative AnalysisThe purpose of this section is to review the information collected from both the TranslationBureau and the participating organizations in order to provide the Translation Bureau with acomparative analysis between its practices and those of the other organizations. Thiscomparison focuses on seven key areas:• Organizational Mandate;• Organizational Funding Model;• Price and Performance ;• Tools and Technology;• Information Security;• Multilingual Services; and• Social Media.5.1 Organizational MandateThe mandate of the Translation Bureau is to provide translation, interpretation and terminologyservices to the Parliament of Canada, and federal departments and agencies. The service iscurrently provided as an optional service on a cost recovery basis to the rest of the Governmentof Canada. Departments and agencies are not required to engage the Bureau for its services, andcan opt to secure their own linguistic services. Today, the Translation Bureau handlesapproximately 72% of the Government of Canada’s translation services.Among the international comparator organizations, all three linguistic service providers hadsimilar mandates to provide services within their own public sector organization. An importantdifference, however, is that use of the comparator organization’s linguistic services is mandatoryfor those organizations.Among the Canadian organizations, three provide services exclusively to internal clients.Organization #1 provides translation services within the firm, as well as to clients of the firm.Their services are not commercially available to other third parties. Only Organization #4provides translation services on a purely commercial basis, and 85% of its volume is with thepublic sector. Of the five Canadian organizations, only Organization #3 has mandated that itsinternal translation service must be used by the lines of business.5.2 Organizational Funding ModelSince 1995, the Translation Bureau has been a Special Operating Agency retaining its mandateas the exclusive supplier of services to Parliament and the exclusive authority for terminologystandardization, but an optional service provider for federal departments and agencies. TheBureau’s funding model reflects this duality of mandate. The Bureau receives budgetaryfunding for its services to Parliament as well as for Termium. For services provided to federaldepartments and agencies, the Bureau operates through cost recovery.Among the eight comparator organizations, four organizations, including all three internationalorganizations, are fully funded and do not engage in any chargeback to the business for theirPage 30 of 43

Translation Bureau Benchmarking and Comparative Analysisservices. Organization #5 is the only public sector organization that operates in a cost recoverymode similar to the Translation Bureau. Organization #4, as a commercial service provider, isnot funded, and charges fully for its services. Organizations #1 and #2 operate through acombination of internal cost recovery and billing to external clients.5.3 Price and PerformanceAs stated in Section 4.3, collection of cost and pricing information from the comparatororganizations was a challenge. Productivity data was determined to be a suitable substitute inorder to provide a basis for quantitative comparison between the Translation Bureau and theexternal organizations. This data reflects the productivity that is expected by the organizationfrom its translation professions. The data was normalized to reflect words/hour for an“intermediate”- level interpreter. The productivity values range from 195 words / hour to 333words / hour as outlined in Table 10. The Translation Bureau’s productivity ratio is 250 words /hour, which places it in the lower-mid range of the comparator organizations.Table 10 - Productivity RatiosOrganizationProductivity Ratio (Words / hour)CanadianOrganization #1 250Organization #2 333Organization #3 267Organization #4 333Organization #5 ~195InternationalOrganization #6 300Organization #7 242Organization #8N/ATranslation Bureau 250In addition to the price information provided by the three comparator organizations, PwC wasable to collect an additional data point with respect to prices. Organization #5 provided therange of prices it is charged by its suppliers. Analysis of the Translation Bureau’s pricing,calculated using a workload-weighted average of the Bureau’s productivity ratio, as it comparesto the available data is presented in Table 11 .Page 31 of 43

Translation Bureau Benchmarking and Comparative AnalysisTable 11 - Price StructureOrganization Price ($ / hour) Price ($ / word)Organization #1 N/A $0.42Organization #2 N/A $0.65Organization #5 N/A $0.23Organization #5 Suppliers(General andfinancial/legal documents)Organization #5 Suppliers(Insurance andsecuritization documents)Organization #5 Suppliers(Technical documents)Translation BureauAll translation services,including revision andproofreadingN/A $0.17 - $0.30N/A $0.18 - $0.30N/A $0.17 - $0.32$77.64 $0.37Translation only $77.02 $0.37Revision and Proofreading $91.21 $0.445.4 Tools and TechnologyThe Translation Bureau utilizes a number of tools as it processes a translation order. These toolshave been deployed to help standardize processes and increase productivity.In terms of process and the management of translation jobs, the Bureau’s IntegratedInformation System (IIS) is used to manage the translation workflow from business intakethrough to invoicing. This is similar to other organizations that also use a workflowmanagement system to track their jobs from intake through to delivery.In terms of technolinguistic tools, Table 12 outlines the major tools that the Bureau hasintroduced into its translation workflow.Page 32 of 43

Translation Bureau Benchmarking and Comparative AnalysisTable 12 - Use of Technolinguistic Tools at the Translation BureauTechnolinguistic Tool Translation Bureau UsageTranslation MemoryMachine Translation(“Portage”).Terminologyrepository(“Termium”)A database is maintained containing all translated documents delivered by theTranslation Bureau for all clients. This enables staff to undertake a search whentranslation requests come in to see if the material has been previously translated.This addresses the fact that when managers make translation service requests theyare not in a position to know whether a document has previously been translated.Currently, the search of the database is manual and optional and it is used whendocuments are pre-existing and/or originate from outside the client business unitthat is requesting the translation service. Under this approach, 25% of documentsare found to have been previously wholly or partially translated. This reduces thetranslation efforts and client billings.Enhancements to the software and database are underway. The TranslationBureau will be undertaking an automated search of all documents for whichtranslation is requested to identify if any parts of the documents have beenpreviously translated.The Translation Bureau uses the software product titled “Portage” which has beendeveloped and is supported by National Research Council of Canada as the toolsetfor machine based translation.The Translation Bureau maintains a database of terms for which French andEnglish versions have been established and to assure consistency, should not befreely translated. Examples of such terms include the titles of organizations,business units, projects and initiatives, personnel titles, committee names andother terms. A database for such terms is maintained per client department aswell as for overall Government of Canada. The maintenance of a database ofestablished terms is a key tool in ensuring quality in translation services.Currently the Translation Bureau maintains these databases through the systemtitled “Termium”. Through Termium, content is continuously added to a databaseby Translation Bureau translators and, through its web-tool, these terms can besearched by anyone.Enhancements to the Termium software are underway to enable full documents tobe searched, so that all established terms can be identified and searchedautomatically. At the same time, changes to the software and support areunderway to enable non-translation bureau personnel to recommend additions toclient specific and government-wide terms.Among the comparator organizations, the following key points were noted:• Use of the tools remains optional and at the discretion of the translator.• The tools have not been integrated into any automatic workflow as is currently plannedby the Translation Bureau.• All organizations use some form of terminology repository. Organization #2 specificallyreferenced Termium as a repository that it used for its translation.• With the exception of Organization #2, all the organizations employed translationmemory.Page 33 of 43

Translation Bureau Benchmarking and Comparative Analysis• Of the eight organizations interviewed, only the three international organizations usemachine translation, with Organizations #7 and #8 using custom solutions for theirmachine translation.• In terms of benefits, the use of these tools is generally felt to have provided a tangibleincrease in productivity. A slightly more intangible benefit was an increase in theconsistency of translation.5.5 Information SecurityThe Translation Bureau manages the translation of documents classified up to and including‘Top Secret’ level. This is done primarily through the use of internal language professionals. TheBureau has also invested considerably in building specific facilities that meet the necessarysecurity requirements.Of the eight participating organizations, two handle translation of Government of Canadaclassified documents. Organization #4 is particularly interesting as it is a commercial serviceprovider that has received a facility cleared to ‘Top Secret’ and all its translators are cleared upto at least ‘Secret’. In the interview, the CEO of the organization indicated that there is nodifference in their approach to translation of classified documents. There is no extra charge toclients for providing this service. His organization’s perspective was that this service wasconsidered as essential in order to have access to this segment of the public sector market andserves as a competitive differentiator. The cost of the facility clearance has been amortized overa long period and is included in the overhead of the organization.Although not all of the organizations handled Government of Canada classified documents, eachdid have measures and guidelines in place for handling secure or highly sensitive documents.These measures were consistent between organizations, and included:• Secure or highly sensitive documents were generally translated by in-house resources;• When necessary, translation was managed by senior resources, up to and including thehead of the organization;• Staff possessed the requisite level of security clearance, or had signed some form ofconfidentiality clause or non-disclosure agreements. These requirements were usuallyextended to suppliers as well;• Restrictions on where the translation work could be performed (i.e. on-site rather thanworking from home); and• Where a document has an official security classification, policy around access andtransmission of the information are followed (i.e. document encryption, no transmissionvia e-mail, work performed on a secure workstation).5.6 Multilingual ServicesAlthough the majority of its volume is between English and French, the Bureau does provideservices in over 100 languages and dialects, including Aboriginal languages. This service ismanaged primarily through the use of external suppliers. Estimated to be less than 5%, it doesnot represent a significant percentage of the Bureau’s current volume.Among the comparator organizations, three of the organizations did not deal with multilingualtranslation at all. Three of the remaining organizations only dealt with multilingual translationPage 34 of 43

Translation Bureau Benchmarking and Comparative Analysison an occasional basis and relied on external resources to provide this expertise. OnlyOrganization #7 and Organization #8 provided a sufficient volume of multilingual service toretain in-house expertise. A key issue in managing the translation to and from a large number oflanguages is that the number of potential language pairs can grow very quickly. Organizations#7 and #8 managed this complexity by restricting the source language to one or two workinglanguages. This restriction dramatically reduces the number of potential language pairs thatmust be staffed.Although it was not one of the eight comparator organizations, an interesting Canadian exampleof multilingual translation can be found with the City of Toronto. As Canada’s largest city,Toronto has a very multi-cultural demographic. In order to support its delivery of services andcommunication with an increasingly diverse population, the City of Toronto has leveraged‘Google Translate’ to provide real-time translation of its website (http://www.toronto.ca/) intoover 51 languages.5.7 Social MediaAs stated in Section 4.6, there is little evidence of the use of translation services for social media.The organizations interviewed indicated that the translation responsibility rests with theorganization that was creating the content and not with the translation services group. This isgenerally the communications group of the organization. Organization #4, the commercialservices organization, did not view this as an area that presented a sound business case forinvestment, and felt that it was an area better addressed internally within an organization due tothe speed required as well as range of potential material that would need translation. While notpurely in the area of social media, Organization #8 did provide some support for websitetranslation, however in their view, the limiting factor on timely delivery was the speed of thewebmaster rather than the translation.Discussion on social media during Executive Workshop #2 suggested that translation for socialmedia as a service that was closer in nature to interpretation or adaptation rather than puretranslation. This was due to the preference for speed while capturing the essence of the messagerather than providing a purely faithful and accurate translation of text.5.8 SummaryThis section summarizes the above data into a single table, as presented in Table 13.It is important to note that the information presented can be considered from two perspectives.The first perspective is to highlight how the Bureau compares to other organizations. The secondperspective is to provide some context to the comparator data so that readers of this report canunderstand the differences between organizations and the difficulties in making a directcomparison between the organizations. As such, consideration of both the similarities and thedifferences between organizations should be taken into account when reviewing Table 13.Page 35 of 43

Translation Bureau Benchmarking and Comparative AnalysisTable 13 - Summary of Comparative AnalysisOrganizationMandateFundingModelProductivity(words /hour)Tools and Technology Information Security Multilingual ServicesSocialMediaOrganization#1Organization#2Organization#3Organization#4Organization#5Organization#6Organization#7Organization#8TranslationBureau• Provide service internally toorganization as well as to firmclients.• Internal service is optional forbusiness units.• Provide service internally toorganization as well as to firmclient.• Provide service internally toorganization.• Internal service is mandatory forbusiness units.• Commercial service provider.• Provide optional service internallyto business units.• Provide service internally toorganization.• Internal service is mandatory forbusiness units.• Provide service internally toorganization.• Internal service is mandatory forbusiness units.• Provide service internally toorganization.• Internal service is mandatory forbusiness units.• Provide optional service toGovernment of Canadadepartments, agencies, CrownCorporations.Internalchargeback;External clientbillingInternalchargeback;External clientbillingFully fundedinternallyExternal clientbillingInternalchargebackFully fundedinternallyFully fundedinternallyFully fundedinternallyInternalchargebackwith somebudgetaryfunding250• Translation memory• Terminology• Usage is optional.333 • Terminology• Usage is optional.267333~195300242N/A250• Translation memory• Terminology• Usage is optional.• Translation memory• Terminology• Usage is optional.• Translation memory• Terminology• Usage is optional.• Translation memory• Terminology• Machine translation• Usage is optional.• Translation memory• Terminology• Machine translation• Usage is optional.• Translation memory• Terminology• Machine translation• Usage is optional.• Translation memory• Terminology• Machine translation• Tools integrated intoworkflow.• Staff cleared to at least appropriatelevel.• Highly sensitive documents managedby head of translation.• Highly sensitive documents retainedfor in-house translation.• Highly sensitive documents retainedfor in-house translation.• All staff cleared to at least Secret• Top Secret facility clearance• Classified work performed indedicated facility or at client site.• Staff have security clearance toappropriate level.• Secure documents not exchanged viae-mail• Work on classified documents nopermitted from home.• All resources sign a confidentialityclause.• Highly sensitive documents managedby head of translation.• All resources are expected to preserveand safeguard documents as part ofcode of conduct.• Highly sensitive documents managedby senior translators and revisers.• Staff security clearance• Secure facility with no externalelectronic access.• No outsourcing of classified orrestricted document.• Staff security clearance• Top Secret facility clearance• Classified work performed indedicated facility.Spanish translation providedthrough contracts andtranslation services ininternational network ofmember firms.Multilingual services notprovided.Multilingual services notprovided.Multilingual services notprovided.Languages dependent onorganizational business plan.Managed through contractsuppliers.Occasional service providedfor foreign correspondence.Managed through contractsuppliers.6 official languages.Language pairs managedthrough the use of Frenchand English as primaryworking language.23 official languages.Language pairs managedthrough the use of English asprimary working language.Managed through in-housestaff and contract suppliers.Not managedthroughtranslationservices.Not managedthroughtranslationservices.Not managedthroughtranslationservices.Service notprovided.Not managedthroughtranslationservices.Not managedthroughtranslationservices.Not managedthroughtranslationservices.Not managedthroughtranslationservices.--Page 36 of 43

Translation Bureau Benchmarking and Comparative Analysis6. Key ObservationsThe primary purpose of this report is to provide the Translation Bureau with key findings fromthe interviews with the comparator organizations and the results of PwC’s research ofpublications and documents by other organizations. This section identifies some preliminarythemes for consideration by the Bureau in assessing its strategic direction for the future.6.1 Canadian Translation Services EnvironmentWhile respecting the Bureau’s current mandate, further examination of its delivery model willbe influenced by availability, quality and supply of third party providers. Translation Servicesfor French-to-English and English-to-French continues to dominate the overall demand.While resources are fragmented, the supply of translation organizations and independenttranslators appears to be stable relative to demand. These micro-enterprises have low overhead,and as such, are able to compete aggressively on the basis of price and speed. The primary effectof this is in the apparent commoditization of translation services and its effect at providinglower costs services. The emergence of a number of large, multinational organizations and theirexpansion through acquisition of small or medium organizations will likely have an impact onlessening the fragmentation of the Canadian supply and exerting further downward pressure onprices. This presents an opportunity for the Bureau to examine and consider how to takeadvantage of its relationship with these suppliers and examine higher value services in the areasof quality standards and tools that could be used to support the industry and its clients.There are some indications that requirements for translation and interpretation services forother languages in Canada may emerge as Canada’s cultural diversity shifts and the degree towhich the Canadian government focuses on international trade. While further analysis will berequired to determine the significance of this emerging demand, the Bureau may wish toconsider its capacity and current mandate to address this potential demand.6.2 Funding ModelIn reviewing the information provided by the comparator organizations, an importantcommonality was noted among a number of the public sector organizations. Of the four publicsector organizations, three are fully funded through an appropriation for the services that theyprovide. The linguistic services provided are considered essential to the operation of the parentorganization and the language service providers are therefore not required to engage in costrecovery from their clients.In light of the Translation Bureau’s legislative mandate to “collaborate with and act for alldepartments, boards, agencies and commissions … in all matters relating to the making andrevising of translations”, and the importance that is placed on similar services in the comparatororganizations, consideration should be given to reviewing how the Translation Bureau is fundedto deliver on its mandate.Page 37 of 43

Translation Bureau Benchmarking and Comparative Analysis6.3 Tools and TechnologyAs indicated above, there has been an improvement in the quality of machine translation andtranslation memory. These tools, however, have yet to be fully adopted by the industry. Thereare a number of reasons that can be seen as driving this trend:• Among many of the organizations that we interviewed, the use of technolinguistic tools isoptional, and at the discretion of the translator. This is, in large part, because there iscultural resistance by translation professionals to use these tools. They are seen as furtherautomating and commoditizing a service that language professionals may feel is acreative exercise.• The use of technolinguistic tools requires both an investment to build and maintaininfrastructure as well as a significant repository of data in order for the tool to beeffective. Both factors impede the adoption of these technologies by the small enterprisesthat represent the bulk of businesses within the industry.• The translation software industry is expected to grow exponentially over the next fewyears. The emergence of global translation organizations with resources to invest in andmaintain the required infrastructure will impact the development and adoption oftechnolinguistic tools. While the degree to which either of these two phenomena will takehold, it is reasonable to assume that the majority of this growth and adoption will bedriven by these large firms as they attempt to reduce costs and increase market share.The Bureau may have an opportunity to examine and determine how to support thedevelopment and adoption of these emerging technologies to further support its clients and thelarger translation and interpretation services marketplace in Canada.6.4 ProductivityWhile PwC was not able to obtain sufficient cost data from comparator organizations for a directunit cost comparison with the Translation Bureau, we were able to review productivity measuresthat each organizations has for its language professionals. Based on its data from 2010-2011,the Bureau’s productivity ratio was approximately 250 words/hour. This was on the lowermiddleend of the scale as compared to the organizations interviewed, which ranged from 195 –333 words/hour.As indicated in our current state assessment of the Translation Bureau, the Bureau employs agraded scale to determine document complexity, which in turns influences the time allotted forthe translation of a document. A key differentiation between the comparator organizations andthe Bureau was that complexity was not a factor for the external organizations. Document lengthwas seen as the primary driver for workload and costs. The translators have a productivitythreshold that they are expected to meet, and the background of the individual translators isrelied upon to provide the specialized knowledge to translate more ‘complex’ documents ratherthan allowing an extra time allotment.Page 38 of 43

Translation Bureau Benchmarking and Comparative Analysis6.5 QualityQuality assurance often relies upon the skill of the translator, rather than being a separatefunction within the process. With some exceptions such as certified or legal documents, qualityis not considered as important to clients as cost or speed. Importantly, quality is expected byclients and therefore not considered a differentiator. However, it is important to note thatwithin the sector, it is harder for the smaller organizations to implement and support theoverhead associated with a true quality assurance function. This, as well as the overallmanagement of quality, will be an important consideration for the Bureau as it considers itsfuture sourcing strategy.6.6 Classified DocumentsPreliminary review suggests that there is some capacity within the private sector to providetranslation of secure documents. The sole commercial language service provider thatparticipated in the study can provide services for Secret and Top Secret documents. This servicewas viewed as an investment that was necessary to secure work of this nature. During furtherdiscussion at Executive Workshop #2, an independent language consultant indicated that shehas ‘Secret’ site clearance for her home office, and through the use of inexpensive, commercialtools, is able to send and receive secure documents. It was indicated that there is both capacityand appetite within the market, from both large and small service providers to delivertranslation of secure documents. The primary barrier to service providers taking the necessarysteps to comply with the relevant information security policies was sufficient demand to supportthe business case for the investment.6.7 Social MediaThe research suggests an expanding market for translation service utilizing social media tools.For the organizations interviewed, translation of social media was being handled by theorganizations’ communications function and not handled by translation services. Most indicatedthat the translation responsibility rested with the organization that was creating the content.The one organization that provides external services did not view this as an area that presenteda sound business case, and also felt that it was an area better addressed internally within anorganization due to the speed required as well as range of potential material that would needtranslation.6.8 ConclusionThree predominant themes have arisen from the work that we have carried out in conductingthis study. While this is not meant to be comprehensive, the following summarizes key themesfor consideration by the Bureau.1. Refining the Bureau’s service delivery model for its current client base.There is an opportunity to more clearly segment its current client base (House ofCommons, Senate, specific government departments and agencies) and perhaps refineservices and service level agreements that have higher value for their clients. Managingthe relationship with the private sector will need to consider the existing dynamics ofprocurement with Federal Government departments and the Translation Bureau itself.We are aware of the current efforts to streamline and improve the processesPage 39 of 43

Translation Bureau Benchmarking and Comparative Analysis2. Enhancing the Bureau’s contribution to innovation. Our studies and interviewsexposed a lack of significant investment in the translation industry. The Bureau has anopportunity to examine the appropriate level of investment in activities that define andmeasure quality standards, as well as the further refinement of translation tools andtechnology.3. Measuring and refining the Bureau’s contribution to ensuring a continuingsupply of quality translation professionals. The Bureau is Canada’s largesttranslation service and does play a role in developing programs that encourage Canadiansto consider becoming a translation professional.Page 40 of 43

Translation Bureau Benchmarking and Comparative Analysis7. AppendicesAppendix A – Glossary of TermsTranslationTermTranslation of bilingualdocumentsTranslation of changesAdaptationSight translationEditingRevisionEditing of bilingualdocumentsQuality assessmentTechnical or scientificaccuracy checkProofreadingTranslation and revisionEditing and translationEditing and translation ofbilingual documentsOn-site translatorDedicated translatorStandbyProject managementSpecial administrativeservicesConsulting servicesWriting assistanceBrief DescriptionRewriting a text in another language, taking into account the tone, style andterminology used by the author.Translating a document part of which is in one language and part of which is inanother language (e.g. English and French).Translating changes made to a text that has already been translated.Translating a document in a way that makes it easier for the target audience tounderstand.Translating a document orally, either in person or by telephone.Improving an original text by correcting the grammar or style or by suggestingsolutions to make the text easier to read and understand.Carefully comparing a translation with the original text and correcting thecontent and style of the translation.Editing a document part of which is in one language and part of which is inanother language.Checking whether a translation is accurate and follows the rules of the languagein which it is written.Closely comparing the technical and scientific information in a translation andthe original to make sure it matches.Reading a text, identifying any errors or typos, and indicating any changes to bemade.Translating a document, then having the translation revised by anotherprofessional.Editing an original document, then translating it.Editing a document part of which is in one language and part of which is inanother language, then translating it into each of the two languages.Assigning a translator to work on site with a clientAssigning one person to translate the texts of a specific client.Offering the services of a language professional who can be reached on shortnotice at any time during a specified period.Helping a client plan, organize, direct, control and monitor a project.Handling a request made up of many files, combining many complex files into asingle file, searching for documents that have already been translated, etc.Analysing a client's language-service needs (translation, revision,interpretation, etc.) and giving advice to the client on how to plan, manage anddeliver these services.Helping a client write a text.Page 41 of 43

Translation Bureau Benchmarking and Comparative AnalysisTermLanguage adviceInterpretationOn-site InterpretingLocalizationTranslation Tools & SoftwareTelephone InterpretingInternational Testing / QAMachine Translation PosteditingInternationalization Services/ GlobalizationBusiness ProcessOutsourcingVoice-over / Dubbing /NarrationTranscreationSubtitlingInterpreting Tools / SoftwareVideo InterpretingBrief DescriptionProviding expert advice on translation problems and language issues(grammar, style, punctuation, terminology, etc.).Facilitation of oral or visual communication, either simultaneously orconsecutively, between speakersAssigning an interpreter to work on site with a clientAdapting a product or service to a different language, or to a specificregion or country that may have different cultural and linguistic characteristicsDevelopment of tools and technologies to support the delivery of translationservicesFacilitation of interpretation through the use of a telephone as medium forcommunication.Testing and quality assurance in support of a globalization effort for a productor serviceEditing of the output of a machine translation by a human translatorPreparing a product or service through identification, extraction andpreparation of elements of requiring linguistic and cultural adaptation in orderto minimize subsequent localization workload.Contracting of the operations for a specific business functions to a serviceproviderVoice-over translation of audio to adapt the material for a local audienceAdapting a message from one language to another, while maintaining its intent,style, tone and context.Textual versions of audio for on-screen displayDevelopment of tools and technologies to support the delivery of interpretiveservicesFacilitation of interpretation through the use of a video relay service as mediumfor communication, particularly for deaf, hard-of-hearing or speech-impairedparticipants.Page 42 of 43

Translation Bureau Benchmarking and Comparative AnalysisToolAppendix B – Common Linguistic ToolsOpen-source TranslationManagement System(TMS)CrowdSightInSightGlobalLinkABREVEAlchemy’s VisualTranslation MemoryTranslation WorkspaceGeoFluentFreewayBrief DescriptionThe open-source Translation Management System (TMS) helps automate the criticaltasks associated with the creation, translation, review, storage and management ofbusiness content and materials. Through an open modular design, organizations candepend on the customizability of a powerful, on-demand TMS tool backed by keyindustry playersCrowdSight provides the platform to manage the translation process for dynamiccontent by leveraging the appropriate group of stakeholders. Through this opensourceapplication, companies can work with clients to define a “crowd”, group orcommunity and set up a translation and review collaboration process that leveragesthe necessary constituents in the translation supply chainInSight is a dynamic reporting dashboard that provides real-time intelligence on KeyPerformance Indicators (KPI) to help clients map their localization spending to theirbusiness objectives. Employing easy-to-read graphs and charts, the InSight platformprovides vital reports on translation that tracks and measures performance, volumeand spend across all languages and productsGlobalLink provides an intuitive platform to streamline every facet of the localizationprocess. The suite is comprised of modular applications that can functionindependently or as part of an integrated end-to-end solution. GlobalLink is thesolution for documentation, software and web content requirementsABREVE compares disparate data, tracks large volumes of consistencies withincontent, and identifies inconsistencies across files, providing with metrics all alongthe wayAlchemy TM solutions increase translation accuracy and precision while reducinglocalization schedules by recycling up to 70% of previous translation work. VisualTM solutions help streamline QA and Engineering processes, automating builds andtesting and providing the quick and intuitive environment for fixing localization bugsTranslation Workspace is an open, Software-as-a-Service (SaaS)-based translationproductivity platform. With Translation Workspace, clients, translators and agenciesgain on-demand access to the industry’s most advanced language asset managementtools without the cost and infrastructure of traditional on-premise translationsystems. Translation Workspace is available through GeoWorkz.com, theeCommerce portal for technology applicationsGeoFluent is real-time translation technology that instantly translates content andcommunications such as Web pages, documents, customer support, user generatedcontent, instant messages, blogs and e-mail. This dynamic, real-time multilingualcommunication platform can be customized using each client organization’s existingcontent and configured for specific business processes to increase translation qualityand availabilityFreeway provides a host of productivity-enriching features that help organizationscost effectively deliver global content, provide real-time project visibility and ongoingenterprise reporting with the minimum amount of administrative burdenPage 43 of 43