| Michael |
I’m Michael Stevens. |
| Renato |
I’m Renato Beninatto. |
| Michael |
And today Renato we get to talk to a guest from one of the largest software companies in the world. |
| Renato |
Absolutely, it’s not a consumer kind of product. |
| Michael |
It’s not American. |
| Renato |
It’s not American. You don’t see it every day, but I can guarantee you that if you download music from iTunes, if you buy stuff at Walmart, if you do a shipment from UPS you’re probably going to be affected by the reach of this software. |
| Michael |
Yes, so SAP kind of has taken over the world and they do have a model for localization that we don’t see in every company, and today we’re going to get some insight into that. |
| Markus |
My name is Markus Meisl. I work at SAP in Germany. SAP is one of the largest business software companies in the world. I’m a member of the management team there. I have basically three teams, what we call translation service teams that service our in-house clients, so the different product departments, and we do all the localization, the translation work. I have to mention if anyone from SAP listens to me, localization has a different meaning at SAP. Localization at SAP means creating country versions, so having legal requirements translated into the software. So, we are the language services department, outside of our company we’d be called the localization department. |
| Michael |
Internally they talk to you as language services? |
| Markus |
Yes. |
| Michael |
Okay. |
| Renato |
So, you do not handle… and this would probably be handled… because SAP is the kind of software that touches every aspect of a business. So, you have HR, you have accounting, you have supply chain, you have anything that you want to talk about, and these are things that follow very local rules and legislation and so on. So, that’s not part of your scope? |
| Markus |
It’s part of the area that SAP language services, my department, belongs to. We belong to a development group called globalization services, that’s about 1000 people, mainly software developers, software engineers, that build those country versions. And one of the largest chunks of their work is to do the legal updates that happen every six months or every year. So, our customers run their business 24⁄7 on our software, and when the government of the US decides to change taxes, which may happen, and they say this is going to go live on January 1st 2018, we will have to have all those tax changes in our system and shipped to our customers and installed there so they can continue running their business. And we’ve got sort of smallish customers like Walmart that depend on that sort of thing. |
| Michael |
Yes, you’re talking billions of dollars. |
| Markus |
So, that’s what the larger area does and translation is obviously one part of that because it can’t create a country version without the language. |
| Renato |
So, 1000 in globalization, how many in translation? |
| Markus |
1200 in globalization and 200 of those are in SAP language services. |
| Renato |
Okay, so SAP, unlike most other software companies in the world, doesn’t outsource its language services. You are like a large LSP. |
| Markus |
We are a large LSP; we’ve outsourced the translation though. |
| Renato |
Absolutely. |
| Markus |
We have an ecosystem of about 110 or 120 agencies. We work with a single language vendor model, but yes essentially SLS our language services department is the project management organization. So, we deal with the internal accounts, the internal clients which could be development departments, it’s marketing, it’s the training department, it’s a lot of corporate documents that we have to translate between English and German. We have a business partner management group that handles… it’s basically our part of purchasing inside our department handling all the agencies but, yes, apart from the translation proper we do it all in-house. |
| Renato |
There are very few companies left that work like this, which is very interesting because there’s also EA in the gaming industry that is very similar. They also… it’s like they run an internal LSP. I find this fascinating, and I find it great because I tell… and we have several listeners here that are going to be knocking on your door after they listen to this podcast, that there’s still hope for single language vendors to… |
| Michael |
Single language vendors, correct. |
| Markus |
I’m not denying that this is a model that’s being questioned time and again the higher up you get in the hierarchy, and the less people know about the translation and localization aspects, the more difficult it gets to argue why this model is actually a good one, but so far we’ve been quite successful in arguing it. |
| Michael |
When you have those discussions, what’s the benefit you’re getting? There’s some costs involved by having people on full-time and head count and things like that, but what are some of the benefits that SAP receives? |
| Markus |
You’re right, people look at us as a really big ugly cost center because 200 people, 200 headcount… |
| Renato |
In Germany. |
| Markus |
Costs a lot of money. There’s about 90 in Germany and we’re… got large bases in Vancouver in Canada which is also a pretty high cost. |
| Renato |
That’s the old BusinessObjects group. |
| Markus |
That’s correct, yes, plus we’ve got a place in Galway in Ireland which is lower cost, we’re in Shanghai which is lower cost, and we also have a base in Japan, in Tokyo. The first thing that we always argue is we’re in-house and we’re integrated in the development and the engineering organization so we can look after optimizing the processes internally. We do contribute to the company’s top line by providing a text, if you want to sell your software in Russia you have to have it in Russian, same in China, in Japan and so on. That is a contribution, but the revenue from that is not attributed to our department or even our area. That goes through the sales organization, but we look after the bottom-line. We make sure that the processes internally are as efficient as possible and at the same time because we’re internal we have direct access to the different teams that produce the text, whatever it happens to be. Could be UI text, can be marketing, can be training, whatever. If there’s questions, and there are often in every project questions, you know, instead of creating queries we can go there directly. So far we’ve argued that leads to a better quality at an equal price probably and the time factor really depends on the product or whatever it is that we translate. We’re not really fully in control of timelines. We’re told, have it ready by then. |
| Renato |
Well, another company, just to make the parenthesis here is IBM that has a hybrid model, but they also have these huge localization centers spread in multiple parts of the world and they do a lot of the work, working with single language vendors. |
| Michael |
Is SAP a developer-centric company? |
| Markus |
Very. |
| Michael |
And so this relationship would definitely keep developers happier rather than some outside force, would you say? |
| Markus |
Probably, it’s hard to say because I think, historically, SAP is really only a development company. We’ve only had something that’s called product management since the late ‘90s really. Before everyone did everything. So, the developers went to the customers which was good because they understood what the customers wanted. They pitched our products, they developed what the customers needed, so they did some sales, and then in the ‘90s when SAP really boomed, we started developing specialized functions like product management, like consulting and so on. Still localization, translation was still an afterthought. It’s amazing because we are really important, but it’s still an afterthought and we’re trying to move further and further upstream. And especially now with things moving into the cloud and agile software development, and continuous delivery, you know, the topic of this conference here at LocWorld, we need to be upfront, and we need to have built-in quality, and the quality of the text is a big part of it, a big aspect. |
| Renato |
And how is machine translation or neural machine translation affecting your processes? I remember a long, long time ago our friend Daniel Grasmick was doing simultaneous releases in English and German, but I’ve lost contact, so I have no idea how you do these things today. Are you doing it in, I don’t know, 25 languages at the same time? |
| Markus |
Well, he introduced machine translation at SAP, and obviously it was rule-based, and we’ve spent several years now moving from rule-based to statistical, and we’re… like everyone else, we’re also experimenting with neural, with pretty good results. We’re putting it bit by bit into our internal processes as well. There’s a very strong pressure, there are quite a few people who don’t know too much about all the aspects of software localization and translation, who believe we can simply pump it through Google Translate and get what we need in terms of quality. Obviously when you have machine translation, it’s zero time, it’s zero cost, put very simply, once you’ve got it all trained up, and then it’s just a matter of quality. So, obviously we need to do it, certain processes will go faster, whether we’ll save a lot of money that’s something that remains to be seen. |
| Renato |
Well, one of the things that I can think the German culture is pragmatism. So, you’re not going to be wasting money on adventures unless it’s something that really works. |
| Markus |
And that’s one other thing, probably the same in every big software company, if you want investments in, for example, development resources for MT, you have to kind of provide a business case. We probably would want to have more people working on it to get faster because the company feels it competes with the likes of Google and Facebook and Amazon, even though we are different. We’re a little bit like, let’s say Salesforce; we sell a product, we don’t give the software away for free so we take liability for what we ship because our customers pay us for it, and there’s a bit of a difference. When you give away the software for free you have a problem on the UI and the text, it’s not really such a big deal. We have large customers like Walmart, our largest one I believe is Nestlé, and they use our software in many, many different languages. |
| Renato |
I have personal experience, and I can tell you that sometimes it can be very hard. I worked on a project with a French company that bought… the operating system where the system was running, was in English. Their user interface was in French. This was a long time ago, I’m sure that that has changed, and the error messages came up in German. |
| Markus |
That sort of thing can still happen today. |
| Renato |
Really? |
| Markus |
Yes, unfortunately. |
| Renato |
But it’s very complex. I don’t know if people who are listening to us have any idea of how complex SAP is. It’s the operating system of companies. You talk about Walmart, you’re managing the whole supply chain of the company with this software. It’s the guy in China who receives an order from Walmart, and it goes to the shipping company, it touches the drivers in the trucks, it touches the accountants in five or six companies. It’s really a monster that you have with fingers in every space. So, it’s extremely complex, I understand the drive to try to keep this under control because of that complexity, but tell us a little bit about number of languages and types of vendors that you work with. |
| Markus |
So, our core product which used to be called R/3 when the company’s success really took off in the ‘90s, and later was called ERP, Enterprise Resource Planning, these days it’s called S/4HANA®. It’s basically the fourth version of that software; it’s translated into 39 or 40 languages. In recent years, or in the last ten years, we’ve acquired a whole bunch of companies that have brought their own products. There was… BusinessObjects was the first large one, there’s Concur, there’s SuccessFactors®, Sybase, they all have their own range of languages. I think the product with the largest number of languages is one of the SuccessFactors products with 46 or 47. The vendors we have, when we recruit them we have sort of a couple of key requirements. We would like the founder or the CEO to be relatively involved in daily operations or to at least understand what’s happening in this company. The location should be in the target country of the language. Ideally, it’s usually a key prerequisite, they should have a bunch of in-house translators who will then look after a lot of the quality. |
| Renato |
You have the volume to justify that. |
| Markus |
Yes and then essentially most of them are small and midsized companies. Obviously here and there in certain countries where there isn’t a lot of choice of agencies we also work with big MLVs but then only for that particular country. We also have agencies that are MLVs for other customers but for us they only serve the one language. |
| Michael |
When you guys benchmark yourselves as a group are you looking at other MLVs in the industry? How do you think about that part of your business? |
| Markus |
I think we do. One of… Renato mentioned him, Chris Pyne, used to have his own agency, he later sold it Lionbridge, he worked at Lionbridge, so he’s really well networked in the industry. He was one of the key people who developed the idea of this model, of this ecosystem. We do look at others, but in a way we’re very strongly following that model because it works for us. We have very close relationships with our agencies. We have a group of core focus agencies. They give us constant input on what we want to change and they’re always the first ones that we talk to when we want to change our processes or the tools that we use. So, there are a lot of very candid conversations between us and them because we don’t always see eye to eye on what we’re doing. |
| Renato |
So, in our podcast we love stories. So you have the choice, you can tell us a horror story or a success story, but you have to tell us a story. |
| Michael |
A horror story or a success story? Now you’ve got me. |
| Markus |
Actually I’ve got a good combination. |
| Renato |
Okay, good. |
| Markus |
In the early 2000s when everyone said SAP is not on the internet and we kind of missed the boat on that, we started developing our first cloud solution which originally didn’t seem to be as successful. Today it’s a fully-fledged cloud-based ERP system. When the company built that product they basically took a number of experienced ERP developers, product managers and so on and shut them away. They had their own building, they had their own network, they had their own means of communicating, and no one else from the company was really supposed to interact with them, and they did a complete outside-in product definition process. So, they sat down with lots of potential customers that they thought would be interested in developing the solution together. And they also said we need to get away from the old picture that SAP portrays of really ugly UIs, really outdated language because, don’t forget, at the time, the original ERP system was developed in German and then translated into English. So, in that way the language used was always different from what is the standard today which is essentially Microsoft language, right? |
| Renato |
Yes. |
| Markus |
So, the approach was we want completely different UI texts, we want the stuff to be modern, and we’re going to sit down with our customers and go back to the beginnings of the company, where we sat with our customers together in the same room and defined what this button should be called. And they wanted the same from the translation side of things. We went out—we hired completely new agencies, even though the stuff that we translate, it’s not consumer apps, right? So, it’s pretty complex, and you really need to understand, especially on the financial side, but also on HR what the terminology is. So, we did that and we thought that would work really well, and then deadlines came up and we needed to start translating a little bit faster than what we would have liked to do. Because normally when we start a new product we have a longish terminology definition process for all languages and then we base all translation work on that. It didn’t happen in that way, so the first version of our software translated into German of that… it’s called Business ByDesign, the product still exists today as I said. It works really well now. Didn’t find very positive feedback amongst all the German developers and product managers that had defined this product. “What is this? This is total nonsense? Who wrote this stuff?” So, we had a lot of interaction as the language services department which I had just joined at the time, it was sort of my first big project I had to handle and the department that we were serving, the ByDesign department, correcting processes. Correcting processes internally. Also helping them redefine their processes. They wanted to be really clever and reuse a lot of the code, which was great, but they also only had one development object with a text account, and they reused that text account on the financial side and on the CRM side. In German, those are two different translations, depending on the context, and they complained about the translation. We changed the translation in our translation systems, and then the other group complained because we had changed the account for CRM to the term for financials, and it showed up in both. So, basically, they had to then rethink what they did and create two objects, one for financials, one for CRM, and that is just one example of all the things that didn’t go so well. |
| Renato |
Well, and you have millions of words that are included in this process. |
| Markus |
I believe that was six million at the beginning. |
| Renato |
There you go. |
| Markus |
It took us a while of working together through the processes but all the processes we created for ByDesign, for example also language acceptance tests and the way we run them today, that all goes back to those bad experiences and these language acceptance tests these days are like the role model for all the other products. So, out of an ugly story came a good one. |
| Renato |
Very good, thank you so much Markus. |
| Markus |
Thank you. |
