Is Localization outsourcing a good idea? 15 experts opinions

In 1982, Microsoft released Multiplan, an early spreadsheets program, then asked ASCII, their official distributor in Japan, to localize the content into Japanese. Microsoft’s director at the time summed up the process as follows:

“We’d finish the product, ship it in the United States, and then turn over the source code library to the folks in Japan, wish them luck and go on vacation.”

As you can imagine, it was very difficult to locate the translatable text in the source code. Those were the early days of internationalization, when the concept was still in its infancy. Of course, we’ve come a long way since then.

Rapid tech development along with historical events (particularly the fall of the Iron Curtain) increased international trade and accelerated globalization. New business opportunities emerged, but so did new challenges. Companies needed to adapt to new markets faster and find a way to efficiently localize their products and services.

At first, localization (l10n) was handled in-house. But then, companies gradually started relying on third parties because: 1) handling localization on their own became too much of a burden and 2) there was no clear ownership of the process.

So, where are we today?

At Lokalise, we were seeking to take the pulse of the industry and possibly map some trends when it comes to how localization is being handled. In our research, the goal was to include versatile perspectives and experiences, which is why we’ve reached out to localization consultants, project managers, LSPs, and advisors, and asked them to put in their two cents on the topic.

Keep reading to discover what 15 localization experts from renowned companies have to say.

    First of all, it’s not a binary issue

    As we started unpacking the “in-house vs. outsourced localization” debate, it became clear that it’s not a matter of “either/or”. These two approaches are not mutually exclusive. In fact, they overlap more than you’re likely to assume.

    When weighing the pros and cons of in-house localization and outsourcing, product managers and C-level professionals tend to bear in mind several factors. The main ones include:

    Financial analysis Calculating differential costs and opportunity costs, as well as incremental costs.
    Agility and speed Evaluating to what extent the localization process would be optimized, assessing the speed of translation turnaround times and scalability, looking at the ability to tackle shifting priorities, hitting the estimated time to market, etc.
    Quality of localized content Identifying the type of expertise that’s needed to achieve the best quality, how to control the output, what type of quality assurance standard should be deployed, etc.
    Tech stack Tools required for successful localization, evaluation of available features and integrations, the level of infosecurity, etc.

    But even when you lay down all the data and realistically assess business needs, it’s not easy to make a confident decision about the best way to approach localization. This is especially true for companies at lower levels of localization maturity (more on that later).

    Looking at outsourcing, there is more than one way to introduce third-party localization services. There are freelancers and consultants, single language vendors (SLVs), language service providers (LSPs), and managed service providers (MSPs, typically covering everything from localization to information security, project management, staffing, etc.).

    Different solutions imply different levels of involvement from the company outsourcing the localization projects.

    In most cases, the company is responsible for approving changes and milestones while both sides need to work on aligning goals and collaboration styles for the best end results. This leads us to the first trend we’ve discovered.

    Localization ownership stays in-house

    When it comes to outsourcing localization, one thing’s for sure: he who pays the piper calls the tune.

    Companies are committed to controlling the process and ensuring they get the best translation quality. Depending on in-house resources, they may have internal reviewers, localization engineers, and even project managers, while relying on external partners for linguistic expertise alone.

    However, Semir Mehadzic, Localization Product Manager at Infobip, points out that there is no universal rule here. One size does not fit all, and the localization strategy must be tailored to company resources, content type, and global mindset or maturity:

    “While localization is still mostly outsourced (generally speaking), we are nevertheless seeing a trend where companies are taking more and more control and ownership over this process. They’re not afraid to get their hands dirty and solve some problems by themselves, instead of just tossing them over to a translation provider and hoping for the best.

    This is particularly noticeable with software companies, regardless of their size. They’re displaying a tendency to apply their product and business knowledge to solve localization challenges too – by redesigning processes, automating repetitive tasks, hiring freelancers directly, employing MT (machine translation), redesigning the content creation pipeline, etc. For them, localization does not just entail the translation of words – it’s about localizing the customer experience, which is more directly tied to their business results and ROI.”

    Semir also underlines that the success of a localization program falls primarily on the company itself, not on their translation providers. Smarter use of technology combined with process improvements could really make a difference.

    Tim Durgin, Localization Program Manager at Amazon agrees with Semir. There’s definitely a need to have better control over the process:

    “From my experience, translation, LQA (linguistic quality assurance), and review are being outsourced but other components of l10n, especially project management and localization engineering, remain in-house.”

    Anouk Perquin, Founder at Anouk&Co, says that she believes the industry is slowly leaning toward hiring freelancers as opposed to outsourcing to vendors. But again, ownership should remain with the company:

    “I strongly believe that the ownership for the process should lie on the client’s side – but that ownership is hard to maintain when part of your process is a black box. This is exactly what happens when you work with translation companies. Their proposition usually is: “give the work to us and we’ll solve everything”. I don’t think that’s a realistic standpoint.

    Initially, there is some resistance from clients when I propose working with freelancers. They believe managing them doesn’t scale. However, they notice soon enough that with the right process and technology this need not be so – quite the opposite actually. I think that more and more companies will see this and are shifting towards this model instead of having an instant reaction to turn to translation companies.”

    There are cases where in-house localization makes sense


    So, we established that, as a general rule, ownership remains within the company that’s outsourcing localization.

    However, even though localization is still predominantly outsourced, there are cases in which it makes more sense to handle it internally, from beginning to end. This is fairly common when it comes to highly technical products and complex content, says Senior Localization Manager at Philips, Bernd Kruse

    “Certain content types are better suited to being translated internally rather than externally. Specifically, software translation, which requires a lot of detailed product know-how, to ensure a proper translation. Other content types require less product know-how and good quality can be ensured with a proper in-house review.”

    When you think about implementing localization in a broader sense and the type of expertise it requires, you might want to give another thumbs up to in-house localization. The reason? Success is dependent on the quality of organizational change, which is hard to outsource.

    Here’s what Konstantin Dranch, Co-founder of Custom.MT, had to say about this:

    “Localization is moving in-house because it’s no longer purely about hiring translators. Today’s successful localization team implements technology such as TMS (translation management systems) and machine translation, and focuses on advocacy, localization readiness, and change management. You can outsource to French translators and Chinese Editors within 2 hours via an agency or a marketplace. But good luck outsourcing organizational change.”

    Konstantin also pointed out the multiple hats that translators wear outside of their traditional roles: 

    “In the past 20 years, companies were hiring translators for their linguistic expertise. As volumes of work grew, translators turned into editors and overseers. Today, linguistic expertise is still important, but it no longer plays the lead fiddle. Technical roles such as language lead, terminologist, and QA lead are in charge of linguistic expertise.

    The top men and women on the language team are savvy technologists and diplomats, who are able to influence the company leadership and dance to the tune of international business, digitalization, and globalization. This capacity is rare: many try but few succeed in becoming the Queen of Localization, and not its Cinderella.”

    Donato Giuliano, Senior Localization Manager at HubSpot shared how, because of security and confidentiality, some of their content is localized in-house:

    “We also have a strong company culture focused on “Solving for the customer.” In-house localization teams, in our context, can offer high quality and speed at the same time, so they make a remarkable customer experience possible.”

    “In addition, we limit access to internal systems for security and confidentiality purposes, and for this reason, some content can only be localized internally as we do not send it to third parties. It is also extremely important when deciding between in-house and outsourced models, to map in detailed stakeholder requirements and have strong sponsors “sign-off” on them to avoid surprises down the road.”, says Donato.

    Whether or not insourcing localization is the right approach depends on several factors. Keep reading to find out the most important ones we have mapped based on the responses we collected.

    Factors impacting the decision to insource or outsource localization

    We reached out to several LSPs and experts to learn more about what they observed in the industry in terms of insourcing and outsourcing localization. The first thing that dictates the way companies handle localization is their localization maturity

    1. Localization maturity (choosing MLVs and SLVs)

    Localization maturity is usually broken down into five stages: Reactive, Repeatable, Managed, Optimized, and Transparent. See table below to learn more about each stage.

    Reactive Localization isn’t a priority. The company usually has one-off projects and is reactive in its approach.
    Repeatable Localization is becoming repeatable. The company starts introducing processes and roles that facilitate translation and localization work.  
    Managed Localization is becoming a focused effort and it is approached strategically. The company understands the value of localization for international growth.
    Optimized Localization is a priority. The company is focusing on scaling and optimally using available resources.
    Transparent Localization is an integral part of content and product development. The company has perfected processes and uses tools that enable smooth localization.

    Antoine Rey, Chief Sales & Marketing Officer at Venga Global, explained how early-stage, reactive companies usually rely on freelancers instead of full-time employees. As they move to the next maturity level, their requirements become more regular and the number of languages increases. This is typically the moment when organizations recognize that they need a scalable and dependable solution:

    “Companies usually move to a fully outsourced model, such as MLV, when requirements become more regular. When the number of languages grows, those organizations realize they need a more scalable and dependable solution. So, the favored option from LM level 2 to 4 is outsourcing to an MLV.”

    “In some instances, and this seems to be in multinationals with very large volumes, we have also observed a return to an SLV model, where the localization department of that organization acts as an internal MLV and relies more on SLVs (sometimes multiple SLVs per language pair) to fulfill their requirement. The drive behind this is a perceived reduction in cost, higher quality output, and better control as to who the end translator is. I am not convinced that those benefits have been proven but would love to argue the case.” Antoine tells us.

    2. Company size and expansion plans

    In addition to localization maturity, company size and expansion plans also impact the way in which an organization will approach localization.

    Simon Kinsey, Commercial Director at TranslateMedia, shares how it’s common to see very large, global organizations manage the localization of their content in-house.

    However, insourcing also implies spending a considerable amount of time and resources on translation technology (a bespoke system or third-party SaaS solution) in order to effectively manage the translation workflow. Partnering with a language provider enables them to offload the entire localization process without the hassle of managing linguists, their workload, or dedicating time to assessing translation quality, explains Simon:

    “Localizing content for international markets not only requires the skills of an expert linguist, but it also demands a robust workflow built to withstand the demands of a growing business.

    Historically, there’s been a fluctuating demand for localized content throughout the year due to the fact that content in the source language is created, drafted, and signed-off over a period of time. Employing full-time in-house teams wouldn’t be very cost-effective when there’s very little, or no, content to localize.”

    We were curious to hear about the value of LSPs in this sense, and Simon had an answer ready:

    “Language service providers typically leverage their access to native, in-country linguists with translation management systems which are used to automate parts of the translation process. These systems provide business stakeholders with a more holistic view of the translation process, give linguists access to language assets such as style guides and glossaries, and allow business owners to access translation memories to effectively manage costs, improve translation quality, and accelerate time to market.”

    3. Translation budget and available resources


    Available resources and translation budget also impact the decision to outsource, says Istvan Lengyel, Founder and CEO at BeLazy and former co-founder at memoQ:

    “Localization is an activity that generally requires bursts of work by a relatively high number of people from very different locations (due to the requirement that they should be native speakers of the target language). If you only localize into 5 languages, depending on the workflow and on whether it is acceptable for one language not to be done due to a vacation or sickness, you need 5, 10, or 15 people.

    These people can perform different work, either within the same company (joint in-house roles) or for different companies (freelance translators/single language vendors/in-house vendors at translation companies). Many companies require translation experience or translation background, and because of this, finding people for joint in-house roles in the job market is quite difficult.”

    So, what would be the business case for hiring in-house? Istvan gave us his educated guess:

    “The business case for hiring in-house linguists starts making sense if the translation budget is over about half a million euros, and there is a strong preference for the company to regulate the language they use in translations.”

    There’s also a question of the resources needed for managing an in-house team as opposed to managing a chosen vendor, says Istvan:

    “There was a time when companies started crazily outsourcing everything, because that was the trend. I think the quality focus today will bring back some in-house positions; however, managing an in-house team of linguists is significantly harder than managing a vendor, also due to the lack of off-the-shelf technology for managing availability and capacity, so I think there’ll be some move towards the in-house model, but the industry will remain predominantly outsourced.”

    We’ll hear from Istvan once more, in the last segment of this article.

    4. Speed of growth and need for scalability

    Jan Grodecki, Senior Solutions Architect at RWS Moravia, explained how scalability is one of the biggest perks of working with LSPs, but that the answer to the “in-house vs. outsourcing” question depends on the specificities of each unique business case.

    There are no notable trends, in his opinion, simply because one size doesn’t fit all. The decision is based on the availability of in-house resources, the control the company wants to have, the level of agility, as well as process and technology expertise:

    “The company needs to evaluate if it is big enough to set up and sustain a dedicated localization team that covers the languages, volumes and areas of expertise required. In addition, if confidentiality of the content is important, outsourcing may pose a risk. If the company requires rapid releases, embedding localization directly into development and core production workflows may be necessary. There’s a lot to think about. On top of it all, the company has to realistically assess whether they need a team to manage the localization process and technology innovations.”

    Weighing the pros and cons is not easy, as previously mentioned. Jan confirmed this by providing us with an overview:

    “In-house localization has advantages like complete control and more agility without bottlenecks or process disruptions. However, outsourcing provides better scalability, the implementation and management of a quality program, the organizational structure required to manage a staff of translators and the ability to share best practices, insights, technology expertise, and process improvements that the LSP has acquired through providing services to other clients.”

    5. Technological expertise

    Jan touched upon the idea of tech tools only being as good as their users. Having the best localization software will bring little value if it’s being underutilized. But it seems that only the biggest companies that commit to continuous localization, can afford to build in-house teams and become those able to innovate. That’s exactly what Stephan Wolschon, Head of Business Development at Milengo, shared with us:

    “Technology is one of the main drivers for innovation in localization. New forms of human-machine interaction are developing, with machine translation as an established field. Automation and connectivity between systems are becoming more integral as well. All this creates a vast landscape of technological options, services, and tools. Whole new fields like natural language processing and text to speech are fragmenting this even more.

    The need to understand, evaluate, and implement these technologies leads to a situation where in-house localization departments are struggling to do this without external help. Only the biggest companies can afford to hire their own specialists and developers and invest in large in-house innovation projects. We are seeing this every day in contact with our clients. 

    Outsourced localization with the right partner enables organizations to implement these technologies and innovate their processes, without huge efforts in research and evaluations. The benefits of outsourced localization become more important as well, like scalability, automation, and risk management.”

    6. Type of content 

    Last but not least, the type of content impacts the decision of whether or not to outsource localization, says Donato Giuliano from HubSpot:

    “For example, at HubSpot we have some content that is very high-touch and lends itself to internal employees only. Other content types are low-touch and can be easily outsourced. And, we also do a good deal of touchless localization with heavy automation and NMT tools.

    We also rely heavily on having external vendor pipelines ready to go, especially for heavily regulated contexts. What many localization service vendors do not realize is that most buyers do not want to add vendors very often, because the vendor onboarding process can be very cumbersome and time-intensive.”

    Controlled outsourcing as a go-to solution


    Perhaps the most dominant trend we noticed while collecting responses for this article is the emerging concept of so-called “controlled outsourcing. This overlaps with the idea of keeping localization ownership in-house (especially the reviewing stage), but it also means investing effort into thinking outside the box and optimizing  collaboration with external partners. 

    1. Pay attention to your resources (especially developers)

    Marek Makosiej, Managing Director & CEO at ATL, shared that companies need to be careful about how they manage their resources, especially in terms of the time and effort invested by developers:

    “If your front-end dev is assigned to do the localization review after hours (even in a user-friendly integrated environment, such as Lokalise) – it won’t work. Too much frustration, not much result. There needs to be a professional localization review team in place, there need to be processes and tools.

    No, “I rejected it because it was funny,” no “I didn’t look at the source text, I’ve just rewritten the target because I felt it would be better.” Believe it or not, these are real-life examples of what can happen to good localization when it’s delivered to an accidental team to push it further up into the publication stage. Controlled outsourcing or some form of hybrid approach customized to a given business and the provider they want to work with is the way to go.”

    2. Tackle the challenges of controlled outsourcing

    Controlled outsourcing involves a smart and careful blend of in-house expertise and outsourced services. Still, simply melding the two approaches together won’t work. There is some fine-tuning and flexibility required. William Spalding, Localization Senior Project Manager at Spotify, shared the most common challenges of this model with us:

    “Focusing on buyer-side enterprise programs, fully outsourced models can often result in a ‘black box’ or ‘dump over the fence’ reality that is a disservice to both the buyer and seller of linguistic services. The buyer lacks understanding, oversight and control of their quality while the seller struggles to meet quality expectations because the buyer is too hands-off, and the linguists don’t have the support or feedback they need.”

    The solution? Structuring processes and treating the external partner as the actual extension of your own team:

    “I am confident we’ll continue to see more and more hybrid models on the buyer side that leverage a centralized localization team who collaborate closely with partner vendors to execute the needs of the organization. While a centralized team may have in-house (FTE or freelance) language specialists, quality managers and linguists alike, some of whom may even facilitate original multilingual content creation, these programs are still likely to incorporate vendors into their model to leverage economies of scale and specialized services.” William tells us.

    There are two additional things that matter here: 1) managing expectations and 2) equipping the external partners with proper information and guidelines.

    Istvan Lengyel shares one simple, yet effective way to achieve this – detailed style guides:

    “One trend is to have very detailed style guides, which requires close contact with the localizer (the company that localizes their product or service). I think that with low volumes, expecting to pay by word for work where there is a lot of learning and style guide harmonization required, is not a working model. With guaranteed volumes, it is. For companies with larger volumes considering localization as a key growth driver I see the insourcing of linguistic roles. I also see business rationale for translation companies hiring staff translators.”

    Donato Giuliano from HubSpot agrees that the mixed model is advisable. He shared how HubSpot approaches localization for the best end results:

    “The correct choice for outsourced vs. in-house must be heavily based on the business context where it is being made. At HubSpot, we have a hybrid model, but the way we work in a high-growth SaaS environment, especially the speed of our continuous deployment and ongoing marketing initiatives, makes an in-house linguistic team an absolute must.” says Donato.

    Donato believes that the answer to this “eternal localization dilemma” involves taking the best of both worlds:

    “Go for a flexible but blended model based on the organizational context and stakeholder requirements. This way, you can keep changing the mix as your business grows and evolves.”

    3. The pandemic might have increased outsourcing

    The pandemic certainly accelerated remote work, although many companies had already embraced it previously. Erica Haims, Founder of Haims Consulting, shared her perspective about how this affected the localization industry:

    “Much of localization has been outsourced and LSPs are working on vertical markets that they have not tackled previously, to support a remote workforce and increased digital demand from customers. I would say that the pandemic has increased outsourcing. That said, in-house teams have grown as well in the areas of streaming media where we are seeing exponential growth in demand.

    Since I consider local original content as part of localization, we are seeing client-side teams increase original content and rethinking what verticals are appropriate for their markets. Having in-house translation and copywriting is definitely something to consider for your tier one market areas depending on how much versioning and original content you plan to produce.”

    Diego Cresceri, Founder and CEO at Creative Words, thinks that the unprecedented events of the pandemic will affect the way that companies organize their localization departments:

    “While many companies were already used to remote teams (in the pre-COVID-19 era, 7 million people were already working from home in the US), the pandemic represented a turning point, with a lot of companies going remote-first or fully remote.

    Some companies, as they become more used to managing remote employees, might build in-house localization departments at least for tier one languages, with team members scattered around the world, and without the need for a big office space (hence, without brick-and-mortar investments). This will give them more control and cost predictability.”

    Diego thinks that outsourcing still takes the win:

    “While some companies might adopt a mixed strategy (in-house for languages with the highest volumes and outsourcing for low-volume languages), it’s my opinion that most companies will still prefer outsourcing their localization needs for different reasons. The main ones include the uncertainty of the current economic situation (especially for companies with HQs in countries where employment regulations are more rigid), availability of workflow technology on the vendors’ side, scalability, and flexibility.”

    He has also noticed that companies are slowly moving from multilanguage vendors to single language vendors, or even directly to freelancers, but that there is “no clear pattern linkable to size, location, translation spend, etc.”

    The future is hybrid

    We’d like to thank all the localization vendors and experts who answered our call and helped us get a better understanding of industry trends when it comes to outsourcing. Based on all the responses, we can conclude that the future is hybrid.

    The hybrid model in localization implies taking the best of the two worlds and combining in-house resources with outsourced expertise. It’s interesting that, as we explored this issue, very few of our respondents have touched upon questions of cost saving, which is often the biggest pro for outsourcing localization. Instead, the ability to control quality and the opportunity to grow remain imperative, standing out as the vital factors for making a decision about whether to outsource.

    How do you handle localization? Are there any trends you’ve noticed? Let us know in the live chat or drop us a message on Twitter, LinkedIn, or Facebook.

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