Fall Newsletter


Fall 2006

Quarterly Summary

Expanding to China: The Hybrid Delivery ModelSM               

 

                   Investment and M&A in China

 
Models and Standards, Why Should We Care?

 


Expanding to China

The Pursuit of  Fengshui and the

Welocalize Hybrid Delivery ModelSM

 

Fengshui is the ancient Chinese custom of the placement and arrangement of space to achieve harmony with the environment. The literal translation is “wind and water. “ For a place to have good Fengshui is to be in harmony with nature and bad Fengshui is to be incongruous.  The Welocalize expansion into China through our merger with Transco was driven by similar principles. 

 

The goal of our merger was to stay in-step with our clients' expanding needs for a Hybrid Delivery ModelSM of onshore service attention and offshore fulfillment.  Our integration goal has been to achieve a superior level of harmony and teamwork amongst our seven offices, partners and clients worldwide.  Through the delicate balance of our clients' needs, our business needs and our staff’s needs, we achieve solid success through smart growth. 

 

This is an ongoing process, and we are passionate about continuing to improve and grow.  We feel excitement and a growing energy level about our company, our industry and what our clients are trying to achieve.

 

China is a great source of excitement and energy for the whole world right now.  There are a lot of ways to measure China’s energy: by the trade surplus, which has reached $133.6 billion so far this year, by increased foreign investment in China, about $40 billion so far this year, or by the simple act of meeting the people and getting inspired by the excitement and energy they exude.  In any case, China is the place to be!

 

Hybrid Vigor

Not only did we acquire a Chinese company, Transco, but we tapped a new source of energy for the company as a whole. Business dealings with the Chinese are no longer shrouded in mystery. What is unique is the transformation China brings in your own company’s prospects and outlook. We not only added an efficient company with 150 expert staff to carry out work, but also infused the combined company with “hybrid vigor.” Hybrid vigor was identified in the cross breeding of plants where two good species are combined to come up with something even better. Welocalize and Transco were good “hybrid” candidates to begin with, and we are now realizing the benefits of hybrid vigor as “the tendency of hybrids to grow faster, get larger, bear more flowers and fruit, or be more adaptable than that of their parents.” Scientists call it heterosis. I’ll stay with “hybrid vigor.”

 

I don’t think that Harvard Business School has a course dealing with the “heterosic theory of management,” but in growing our company, as we have steadily done in the past several years, this principle has always been on our minds. It continues in the acquisition of Transco, and it will be expressed through future acquisitions as well. 

 

We also sense it going on all across China. The accelerated, almost feverish, pace one feels in Beijing is exaggerated by the preparations for the 2008 Olympics. It is hard to count all the construction cranes reaching for the sky that one can see from a hotel room window. Yet all this construction usually involves some aspect of Fengshui.

 

Managing by the Numbers

Our company has always stressed “management by the numbers” in order to succeed and grow.  For centuries numbers have almost been a second language in China. The unluckiest number is considered to be four (it’s 13 for Americans) or si, which can also mean death in Chinese. It is so dreaded that some buildings have no fourth floor. On the other hand the number eight is considered the luckiest, or ba, which rhymes with fa, the Chinese character for wealth. It is no coincidence that the Summer Olympics in Beijing will open on 8/8/08 at 8 PM. A regional Chinese airline reportedly paid USD $300,000 to be assigned 8888-8888 as a telephone number. By the way, the number for Transco in China is 8610 6581 9699.

 

Given this fascination with numbers, licensing bureaus throughout China have been auctioning off license numbers with some numbers going for upwards of USD $35,000. Whether or not you really can achieve success with a lucky license plate, the belief in some numbers being better than others remains, and our goal is to produce both better numbers for the company and our clients.

 

 

Be the Best

“Be the best” is what the sign reads in the former Transco, now Welocalize China offices. It’s fun to visit our staff in China. The “hybrid vigor” which they exude is contagious. And even though we had translated and localized in Chinese before, the people in our western offices naturally felt somewhat removed from the world’s fastest-growing market. Now, all of our offices can feel the excitement and sense the amazing potential of the combined companies and offices worldwide.  Even our COO, Chris Grebisz, has gone out and enrolled in a course to learn Chinese!

 

One day you will have to meet Yolanda, our General Manager in China, and sense her enthusiasm. The language in our Chinese office is English, and it will be easy for you to communicate with her and the rest of the staff.

 

Our staff in our two China offices is approximately 60 linguists, 15 desktop publishers and 40 engineers. Having applied ISO 9000 standards since 1998, the team has earned kudos for its work. They have also been a pioneer in China in applying the CMMI model in software localization, engineering and testing services and achieved CMMI Level 3 in 2005.

 

Hybrid Cars and the Welocalize Hybrid Delivery ModelSM

What do hybrid cars have to do with China?  China has the fastest-growing car market in the world right now, and the increased demand for fossil fuels, and subsequent decreasing supply, is driving innovation in the hybrid market.  The same macro trend is being felt in the Globalization Services industry.  The volume of content needing to be translated is growing exponentially, but the budgets to pay for this translation are tightening.

 

As a result, Welocalize is introducing something new, and we call it the Hybrid Delivery ModelSM. The benefits we expect the model to produce for our clients with this strategic need include faster time to market and lower costs, ultimately enabling them to translate more content.

 

E. Smith Yewell

CEO

Smith.yewell@welocalize.com

 


 

Investment, Merger and Acquisition

Opportunities in China

 

Recently, someone asked me whether the Chinese government allows a foreign business to wholly own a (localization) firm in mainland China. As this is not the first time I have heard such a question, I'd like to share the answer here and provide some information that might be helpful to companies who are interested in establishing an operations unit in China.

 

Although the Chinese government does restrict or even prohibit foreign investment in certain industry sectors, when we researched the legality of the Welocalize-Transco merger, these sectors did not include translation and localization services. If you would like to learn more about where foreign investment is encouraged, restricted or prohibited, the following regulation provides the answers:

 

Catalogue for the Guidance of Investment Industries, Order No. 21 [2002] of the State Development Planning Commission, the State Economy and trade Commission, the Ministry of Foreign Trade and Economic Cooperation.

 

Some people might differ with my answer. For example, in Outsourcing Testing to China, issue April 2004 of Client Side News magazine, the authors wrote:

 

“Since a Western company cannot legally own a Chinese business outright, companies that opt to set up an operation in China need to go into a joint venture with local interests.”

 

I’m confident the above point is not the case. The simplest evidence is there is a Law of the People’s Republic of China on Wholly Foreign-Owned Enterprises. The title itself indicates the legality of wholly foreign-owned enterprises.

 

Vic Dickson

Founder, Transco

Vic.dickson@welocalize.com

 

 

 

Quarterly Summary

This has been an amazing year for Welocalize.  We successfully completed mergers in Ireland, the USA and China. 

 

Our staff has grown from 47 in 2005 to approximately 250 in seven offices worldwide, and our revenue has more than doubled.

Our capabilities have also grown particularly in the area of offshore execution.  We are in the process of rolling-out a new Hybrid Delivery ModelSM to certain clients having the strategic need for onshore service attention and large, offshore execution.

I am also happy to report that our record growth has continued.  Q3 2006 marked our 19th consecutive quarter of growth.  We achieved an 84% increase in total revenue for the quarter over 2005 and 102% increase year to date over 2005. 

It has been a very demanding year, and I want to thank our staff, partners and clients for their patience, commitment and hard work.

 

E. Smith Yewell

CEO

smith.yewell@welocalize.com

 

 

Meet us in China!

 

Please join us at the LISA “China Focus” conference in Beijing, March 12-15.  Please contact Caroline Gouin for more information.  Caroline.gouin@welocalize.com.

 

Please join us at the Localization World Conference “Out of Asia” in Shanghai, March 20-22.  Please contact Caroline Gouin for more information.  Caroline.gouin@welocalize.com.

 

Welocalize personnel and executives will be on hand at both of these events to discuss our Hybrid Delivery ModelSM and the ways in which it can help your company to accomplish its globalization goals.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For those who want to seriously consider China as a part of their business strategy, please refer to:


Invest, Merger, and Acquisition in China
Auhtor: Jingquan Xiao, Ting Zhang
Publisher: Foreign Language Press
ISBN: 7-119-03975-x
Pages: 247

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      

Standards and Models, Why Should We Care?

 

By Elly Liu

Welocalize China Office, Marketing Manager

Elly.liu@welocalize.com

 

Standards and models, why should we care? Most businesses, if not every, are facing the challenge of needing to produce more with less budget. At the same time, increasing customer demands and quality requirements are putting pressure on companies to innovate rapidly. High efficiency and excellent organizational performance is the only way to keep up. Thus, how should a company develop and maintain a competitive edge? Will standards and models help?

 

Let’s talk about standards first.  The application of standards and models within the localization industry is, from a practical perspective, the same as their application in other industries. Generally speaking, the application of standards will be beneficial to everyone, not only to the users. The innovative application of a set of standards and models (ISO 9001:2000, CMMI, etc.) integrates business objectives, business needs, strategy and vision, process improvement and measurement.

 

Why ISO 9001:2000?

Quality management is vitally important to any business. Continuous process improvement is a perpetual effort to ensure quality. With a set of guidelines that cover every process and each activity, an ISO quality management system provides not only a method for continuous improvement throughout the organization, but also guidelines to witness and record every change/progress of organizational performance. From process goals, starting points and ending points, to resources, customers and suppliers, an ISO system exerts control over every step of any unit within the organization.

 

Why CMMI?

Compared to ISO 9001, CMMI is a model with more detailed directions. As defined by SEI, CMMI (Capability Maturity Model© Integration) is "a process improvement approach that provides organizations with the essential elements of effective processes. It can be used to guide process improvement across a project, a division, or an entire organization."

 

CMMI is not a certification program. Reaching a level of CMMI is a proof of process/operation maturity, and passing the appraisal is not the aim of CMMI. For example, The Welocalize China Software Engineering division applied for CMMI and achieved Level 3 in June 2005. The motivating reason is that it sees the demand for a more detailed model, to keep its performance more consistently improved. With this, successful process improvement approach links process improvement goals to business objectives, thus improving productivity and quality, reducing cycle time and controlling cost.

 

Models

As a clearly defined system, ISO 9001 is a standard that can be a base for other models. We have made it the base in our Hybrid Delivery ModelSM.  With such a strong foundation, we are able to rapidly scale in order to meet our clients offshore requirements while still providing a high-level of onshore service and support.

 

 

 

 

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© Copyright 2006 Welocalize, Inc.

 

 

 

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