CyraCom Answers the Call for More Differentiation in Telephone Interpreting

Only four days after T&I Business observed the need for greater differentiation in phone interpreting, CyraCom sent out a press release announcing that it would release proprietary training materials to advance national healthcare interpreter certification efforts. This is a nice announcement to promote CyraCom training and quality, but not the main point of differentiation I'm referring to. Hidden at the bottom of that press release, in the company description, was a short mention that "CyraCom recently completed an extensive audit of its management system and processes, and has been awarded ISO 9001:2008 certification - the first over-the-phone interpretation company in the US to achieve this distinction." Yesterday, CyraCom finally made the ISO certification announcement official by blasting the internet with press releases.

Though clearly not so common in phone interpretation, ISO certification has become very common in the translation industry. So some non-US translations companies that happen to also provide a little phone interpretation have been ISO certified for some time. Before CyraCom's announcement, Sweden-based Semantix, the world's 6th largest OPI firm, appears to have been the largest OPI firm to have achieved ISO certification based on the older ISO 9001:2000 standard.

CyraCom is the first in the US, but not the only US OPI firm now with ISO certification. A quick Google search for "telephone interpreting iso certification" reveals that another company by the name of Voiance, which shares the same executives and same Tucson street address as CyraCom, sent out a press release at the same time announcing it was "one of the first over-the-phone interpretation companies in the US to achieve this distinction." So the CyraCom group not only has a company that is differentiated for quality with a healthcare focus, but also a "sister company" that can possibly differentiate itself for quality in general phone interpreting that includes financial, government, insurance, and other industries. (Voiance describes CyraCom as both a "parent" and a "sister" - what a strange family tree!)

Other OPI companies are likely to soon copy CyraCom and Voiance by achieving ISO certification, just as they are also likely to learn from CyraCom's now open-sourced assessment and training materials. This could be difficult to maintain, but at least for now CyraCom has a good start in staying ahead of the curve.

In any case, ISO certification alone is not enough to ensure quality in the language industry, and the highest quality comes from adopting a combination of quality assurance procedures and metrics, as Elanex does for written translation. CyraCom is proving its quality to potential customers not only by being the first to obatin the latest ISO certification, but also by receiving the exclusive endorsement of the American Hospital Association, and also by leading the charge for good national medical interpreter certification. Many have noted that everyone firm in the language industry claims to provide the best quality, so staying ahead of the curve in proving that to quality-conscious healthcare customers is a difficult task. It is not one thing, but this consistent and concerted effort that will create differentiation in an otherwise seemingly commoditized industry.

Final point: So, I didn't realize that this blog was so influential and that my call for more differentiation in the OPI industry would be answered so quickly - within 4 days! It's possible that CyraCom started the certification process a little sooner (many months sooner), but just in case I'll try to use this possible influence to my advantage. Keep an eye out for future posts about how Microsoft and Google could greatly improve their localization strategy by investing billions of dollars in a small translation business blog like T&I Business.

Interesting Notes from Language Line about the OPI Industry

Last month, Language Line Services (LLS) submitted its 10-K for 2008. In a space the size of the OPI industry, one little report from the company with the most market share can reveal a good amount of information about the industry as a whole. Here are some of the important points gleaned from the report:

• Barely maintaining market share, thanks to industry acquisitions. LLS stagnated in 2003 while other OPI firms grew quickly and snatched contracts by underbidding the OPI giant, and revenues only increased from $140M to $145M during the 2 years from 2003 to 2005. (Being the industry 'Goliath' certainly has clear advantages that come from size and disadvantages that come from many potential 'Davids' looking to exploit some weakness.) With LLS's 2006 acquisition of Language Line UK and its 2008 acquisition of Coto (Teleinterpreters/Lingo Systems) and NetworkOmni's OPI clients, one might expect LLS's growth to outpace the estimated 14.6% annual growth rate for the entire industry (if that estimated rate is correct). However, at $163M in 2006, $183M in 2007 and $212M in 2008, Language Line is only recently beginning to keep up with the market's growth rate. If LLS had not obtained a roughly estimated $65M-$85M or more in revenue from its acquisitions, LLS may have grown very little or even shrunk.
• Taking notice of key players: LLS believes its "most significant United States competitors" include Lionbridge, Pacific Interpreters, and Cyracom. T&I Business has already noted why Pacific Interpreters and particularly Cyracom are the fast-growing players to watch in the OPI industry. However, it is interesting to note that Lionbridge barely made it into the list of the Top 15 OPI firms, but it is also viewed as a threat, probably because Lionbridge is also the world's largest localization company (a service LLS recently began pursuing more seriously) at more than twice the size of LLS and therefore has great access to capital.
  


• Healthcare interpreting growing as a percentage of revenues: LLS's breakdown of revenue by industry shows that its business from healthcare has increased significantly, again pointing to evident opportunity that makes Cyracom and Pacific Interpreters such important competitors.
  


• Spanish continues to drive demand for services: little has changed in 5 years, and Spanish continues to make up nearly 3/4 of all billed minutes, while the top 10 languages make up more than 90% of all billed minutes.
  
  
• Rates per minute continue to decrease with continually increasing competition.
  


• Government plays a significant role that affects the OPI industry. The report mentions potentially positive actions (requiring companies to provide interpretation to comply "with Title VI of the Civil Rights Act of 1964 which requires companies to have interpretation services for LEP speakers in order to qualify for federal funding.") And the report mentions actions potentially harmful to OPI firms such as protectionist laws to discourage the offshoring of jobs by US firms. Surprisingly, more was not metioned about recent pro-OPI laws like those in California that now require health insurers to provide 'free' interpretation to LEP (Limited English Proficiency) patients. (But the report is not intended to be a complete business plan, so it can't include everything.)

Knowing that Language Line does about as much business as the next 14 largest OPI firms combined, it is easy to infer that most other firms, particularly those that offer little or no differentiation from Language Line, are also seeing decreasing rates per minute and similar service percentage breakdowns by language and industry. Likewise, other OPI firms are probably worried about the same competitors and taking note that Language Line has not grown much lately except through acquisition.

Commoditization vs Differentiation in Telephone Interpreting

How are one company's phone interpreting services different from another? Is there really any significant point of differentiation? For the most part, we see a lot of "me too" OPI (over-the-phone interpretation) companies out there.

Looking at the websites of any of the Top 15 Telephone Interpreting Companies (free registration with Common Sense Advisory required), you'll see that everyone looks very similar. Language Line Services (LLS) at least has the name (like Kleenex or Coke) that everyone thinks of first, it is the largest, and it provides a good service, so LLS is in a seemingly immovable first place position. Looking at the websites of NetworkOmni, Language Services Associates, LLE, Telelanguage, CanTalk, Certified Languages International, CTS Language Link, and others, it is difficult to pick out any real point of differentiation, or even some superficial but perceived point of differentiation. Maybe they do offer some great differentiation behind the scenes, but they are doing a lousy job of marketing it - they all offer "100+ languages, 24/7 access, convenient pricing, blah blah blah."

Pacific Interpreters at least communicates a clear focus on health care interpreting, so health care clients may be more likely to use their service. Cyracom goes one step further by highlighting that it is "exclusively endorsed by the American Hospital Association" thus communicating at least a perceived edge in quality. According to the same CSA report mentioned above, Pacific Interpreters and Cyracom were going neck and neck in 2007 when competing to be the most serious contender for market share against LLS. Maybe that differentiation by market focus has something to do with their success.

The translation industry is constantly fighting perceived commoditization, so it should come as no surprise that the OPI industry would be doing the same. Evidence of this can be detected in public price wars. CSA identified steady price erosion in the same report above. When Language Line's revenues stagnated during most of the past decade (in spite of a steadily growing total market), it became clear that LLS was losing many large contracts by as little as one cent to more eager up-and-coming OPI firms. As would be expected, these eager firms can't hold up for long in a price war with the giant LLS, and rumor has it that most of the major clients lost on price have returned again to LLS.

So, hypothetically speaking, how could an OPI firm overcome this perceived commoditization and really achieve a true competitive advantage and win market share from the giant LLS? (Or how could LLS break away from the pack even more?) Winning on cost appears to have a short shelf life. Winning on market focus appears to be going well for Cyracom and Pacific Interpreters, but that can obviously restrict the size of the total available market. That covers two of Porter's generic strategies to achieve and maintain a competitive advantage. The third and final strategy would be differentiation, and it is difficult to find much evidence of any OPI firm with true differentiation.

If you have an idea, or if you have seen great OPI differentiation that has not yet been communicated through good marketing, I would love to hear about it and I'm sure these other companies would too). Post the idea as a comment or email me directly. The differentiation could be real or perceived, as long as it would convince clients and create a competitive advantage.

Shaking Things Up in the Phone Interpretation Market

The OPI (over-the-phone interpreting) market has been rather quite for the past year, except for some acquisitions by Lanugage Line (the first and largest OPI company) and the unfortunate passing of NetworkOmni founder George Ulmer in 2008.

That may be changing as Cyracom (the company that patented the first dual handset phone) is starting to grab some attention in a number of ways.

1. It appears to have possibly become the 2nd largest OPI service provider in the world, a position once long held by NetworkOmni. And that growth appears to continue as Cyracom recruits hundreds more interpreters for a new call center.


2. It obtained the industry's sole endorsement from the American Hospital Association. The choice to specialize in medical interpretation may be paying off.


3. It appears to be attracting the attention of the giant Language Line (and possibly making LLS nervous?), as Language Line has opened a new office in Cyracom's backyard, giving the appearance that LLS desires to "keep its friends close and its enemies closer."

OPI provider Language Services Associates also made the news by joining the 2008 Inc. 500 fastest growing companies list, but they are still several million behind Cyracom in size.

Who else is competing for 3rd place? For more information, check out 2008's report on the Top 15 Telephone Interpreting Companies by Common Sense Advisory. You'll need to complete a free registration form to view the report, but you'll be able to see more about Language Line, Cyracom, Pacific Interpreters, Manpower(?!), NetworkOmni, and more.

2019: the Future of Translation According to Microsoft

Microsoft's new little video about a future high-tech utopia includes fun visions of machine translation.


Microsoft's Future Vision 2019 - The best bloopers are here