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RR Donnelley Takes a Stand on Technology
Posted by Benjamin B. Sargent, Donald A. DePalma on May 28, 2014  in the following blogs: Technology, Supplier Business Issues
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RR Donnelley (RRD), a US$11 billion company in print, digital, and supply chain solutions announced earlier this year it would buy MultiCorpora, a developer of translation automation software. Thirty days after the acquisition was completed, we spoke with Christophe Djaouani, Vice President and Managing Director of RR Donnelley Language Solutions, and Nicolas Bosovsky, Global Operations Director, about their plans for the technology they acquired with MultiCorpora. The top-line message is that RR Donnelley will continue to sell MultiTrans Prism as standalone software, independent of its translation services, as well as using the technology internally to deliver language services for clients. What does this purchase mean for RR Donnelley, MultiCorpora customers, and the market? 

First of all, the two companies were not strangers, nor is RR Donnelley new to software. RR Donnelley has used MultiTrans since 2005 and has been a sales partner to MultiCorpora since 2009. Djaouani and Bosovsky emphasized the deep relationship and knowledge of each other’s business that the two companies have had, and which led to this deal. While this is the first major software acquisition in the Language Solutions business, RR Donnelley already sells other enterprise software solutions, including CustomPointNimbleFish, and PreMedia Technologies.

What RR Donnelley gains in the acquisition:
  • Product history. In 1994, MultiCorpora began as a software research and development team, building and supporting MultiTrans, a desktop translation memory (TM) application. Over the years MultiTrans morphed into a centralized TM solution with client/server architecture. In 2011, MultiCorpora purchased Beetext and incorporated its workflow engine, Flow. The combined offering, released as MutliTrans Prism in 2012, is a full-featured, enterprise-class translation management system (TMS). 
  • Prism’s security features. A core selling point of the Prism platform is access control for the content being translated. This capability boosts RR Donnelley’s offer for the financial, legal, and medical/pharma sectors where it already concentrates its language efforts.
  • New vertical for RR Donnelley. While the company already serves several industries, the government/NGO sector is not currently one of them. MultiTrans Prism has an established customer base in this vertical in Asia, Europe, the Middle East and Africa, as well as North America. This provides RR Donnelley with a new sector to introduce to its full range of solutions. It also gives the company a platform for offering the broader set of services and solutions needed in these geographical regions.
  • Access to a new group of translation buyers. The installed base of MultiTrans users – both Prism and earlier versions – represents a group of potential customers for RR Donnelley Language Solutions. As noted, there is already a likely fit in terms of vertical expertise.
  • Human capital. In addition to the already significant IT resources of RR Donnelley, the MultiCorpora facility in Gatineau, Quebec now adds to the company's research and development capability. With a long history of research going back 20 years, this team would be a feather in the cap of any language or content company. RR Donnelley is both.
Common Sense Advisory sees a few places where RR Donnelley can expand its offerings through MultiCorpora’s technology:

  • Vertical solutions. While the CMS world has evolved significant vertically-targeted solutions from the likes of EMC Documentum, IBM, OpenText, and Oracle, the world of TMS still mostly follows a “one size fits all” model. With RR Donnelley’s own vertical approach – both in its translation services and technology in its other business units – the company has an opportunity to build out specific solution offerings for medical devices, pharma, legal, and financial services markets with tailored, out-of-the-box workflow options.
  • Geographic expansion for Prism. The existing user base for Prism is concentrated in Francophone markets of Belgium, Canada, France, and Switzerland. RR Donnelley has a much broader sales and operations footprint for delivering and supporting solutions. To succeed, it will need to increase product localization efforts, as the current system is available in only English, French, and German.
  • Broader portfolio of products and services. RR Donnelley says its Language Services group can now offer: 1) TMS as standalone technology; 2) language services in the traditional agency role; and 3) TMS plus language services as a combined offering. This puts RR Donnelley on equal footing with SDL and TransPerfect/Translations.com. In the future, we expect the company will bring other value-added services to the mix, such as branding, content creation, transcreation, and video and audio localization. Combinations with other RR Donnelley platforms and services such as DigiMag and Helium are also likely, in order to fully integrate translation in the broader content management and publishing workflow.
With these opportunities come some potential pitfalls:
  • Selling to governments requires a different approach. Executives at RR Donnelley say they are enthusiastic about the new vertical and will seek to reinforce their new position in government and NGO agencies with additional services and solutions. The purchasing cycle and sales process for this type of client is very different than commercial sales. The company will need dedicated sales teams and a different kind of oversight to succeed in this sector.
  • Conundrum: Prioritize internal efficiency needs, or general market requirements? One challenge for TMSes in general is the adaptability to specific customer and LSP environments. The nitty-gritty details of process design and management vary from one operation to the next. RR Donnelley will face the same challenge already encountered by other vendors that sell software they also use internally. Who wins in the roadmap wars, internal users or external customers?
  • Many LSPs remain wary of buying software from a competitor. As we’ve long observed, many LSPs prefer to buy software from technology vendors that don’t also sell translation services (see “SDL Buys Idiom: The Market Reacts,” Feb08). LTC, Plunet, and XTRF all opted for creating separate companies to operate the software business. Notwithstanding all the flak, SDL has managed to keep a large share the market for language tools. As is the case with RR Donnelley’s MultiCorpora acquisition, the translation technology companies purchased by SDL came with significant installed user bases.
What could RR Donnelley do to address these issues? 
  • Establish a strong LSP partner program. Language technology companies selling into corporate environments typically incentivize the supply chain to get onboard, or stay on. Discounts, training, and marketing benefits characterize the programs of competing platforms. LSP partner strategies may be formal programs or simply marketing campaigns, but goodwill is the goal, and formal structures build stronger relationships with otherwise competing service providers. At the same time, corporate customers worry that purchasing software from a language supplier creates “lock-in” with that one vendor. Formal LSP partner programs also provide a credible answer for the enterprise buyers. 
  • Multi-level sales training. RR Donnelley must establish a separate sales organization to handle the serious corporate sales cycles required to close the big deals. It won’t be easy. Enterprise software is not something most translation agency sales teams are prepared to handle. Similarly, the individuals with a track record in selling enterprise technology solutions don’t find selling language services to be a compelling proposition. At the same time, it must incentivize cooperation between language and technology sales teams – not only at deal time, but also for ongoing service and support. Language technology and language services can be used separately – but they must also fit together, like hand in glove. 
Why does Common Sense Advisory think this acquisition is good for the industry?
  • Deep pockets are needed. Since we spoke with RR Donnelley, TMS vendors such as Smartling and XTRF have attracted attract large sums of capital. Competing in the next rounds of the language technology games will require serious amounts of money, as well as smarts. Running a large translation services business requires a lot of software licenses, which is why the biggest companies own their own platforms. RR Donnelley can justify ongoing investments on the basis of lower costs, on top of whatever the general market opportunities will justify. 
  • Another one bites the dust – not. Though not the most innovative in creating new technology, large LSPs have – without a doubt – proven to be the best stewards of the established software platforms in the industry. For MultiCorpora, like so many other companies before it, the decision was simply to stop pushing the stone uphill, and instead roll it in through the open door of a large LSP. Startup engineers become exhausted managing the headaches of a mature code base with zillions of users. LSPs love it – they’re services companies, of course.
RR Donnelley is a great home for a big piece of software that a lot of enterprises, government agencies, multilateral organizations, and yes, LSPs, rely on for their daily operations. And in the coming years, RRD’s mission should be to improve the platform’s features, performance, and usability, making the investment necessary to grow market share in a competitive landscape.


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