Jonathan Slaughter's Blog

My dad always says, “The only constant is change.” While this is not a Michael Slaughter original – although he does create some mind-blowing original thoughts – it is still true. In few places is this adage more poignant than on the web. To point:

Boston Consulting Group (BCG) recently released a Google-backed study around the growth of the web economy. The findings show that the value of the web economy in the G-20 countries will double in value by 2016, growing from $2.3 trillion US to approximately $4.2 trillion US.^[1] This is attributed directly to the rise in mobile internet access and applications. Because of mobile device growth, Google estimates that over 3 billion people will have access to the internet on a regular basis within the next four years.^[2] The question for global organizations is how to jump on this information in the most appropriate way to drive the future of their business and client engagement.

As a global organization, the G-20 is quickly re-solidifying their position as the standard bearer for significant, sustainable revenue generation. While “developing” or “burgeoning” markets are always going to be important, there is not foreseeable threat to the global dominance of the G20 marketplaces.  To provide perspective, the G-20 economies account for more than 80 percent of the global gross national product (GNP)^[3], 80 percent of world trade (including EU intra-trade) and two-thirds of the world population.^[4] They contribute to 84.1 percent and 82.2 percent of the world's economic growth by nominal GDP and GDP (PPP) respectively from the years 2010 to 2016, according to the International Monetary Fund (IMF).

When you look at the projected internet economy ($4.2 trillion US) when compared to the overall economies of the G-20, will still be below 10%. While this does not dispel the need for “brick and mortar” shops for retail companies (as an example), it does call for a significant way in which we approach customer engagement.

Staying with the retail industry, a majority of “brick and mortar” retailers maintain a simple online strategy – use the website as a means to drive in-store revenue. Big box retailers like Best Buy and Target offer the ability to order something online and pick it up at a nearby store. While this meets the “immediacy” of the customer to have the item, the logic is that when the customer goes to pick up their purchase they will make additional purchases at the store. While this model has a level of effectiveness, the dynamic increase in the number of customer personas require multiple strategies for online engagement, including a “shop-like” environment for those buyers who look only online and avoid the “brick and mortar” altogether.

However, I will again state that developing and improving your online strategy means the end of “brick and mortar.” In fact, in their latest report ForeSee noted that “highly satisfied visitors to retail websites in the U.S. say they are 65% more committed to the brand overall, 68% more likely to purchase from the retailer online, 48% more likely to purchase from the retailer offline, and 67% more likely to recommend the retailer than their dissatisfied counterparts.”^[5]

While retail has been the driving example, it is fair to note the growth of the web economy will come largely from an increase in mobile internet access.  The ever-dropping price and availability of smart phones and tablet devices in the market place will drive a significant revolution away from the traditional internet access via a copper wire and a desktop PC. In fact, it is estimated that by 2016, over 80% of all internet users will access the web using a mobile device.^[6]

What this means is that the ability to complete the purchase quickly will become a significant driving factor. This is counter to the traditional belief that the accomplishment of a purchase is holding the item in your hand. Quickly the expectation is a smooth, online experience that creates a “shop-like” feel.

So, what does this mean for global organizations? Who is impacted by this potential change? The answer is simple: Everyone.

It does not matter what industry you are in, there is a specific point that will resonate throughout every industry. So, even if your company is more B2B than B2C (example medical devices, IT, software) the ability to access IFU’s will have to come through the web – not traditional print (except where required by law). As the expectations of ease and simplicity move into our personal lives through online, mobile channels, the desire to see this approach incorporated in the “work” life will be pervasive. Video instructions and demonstrations will become more commonplace – asking the question of formats (i.e Flash or HTML 5).

So, while the initial discussion was around the increase in online economy, the ability to engage our “work” life with the same ease as our personal lives will drive those changes across every industry, not just retail.

After being passed over for consideration as late as 2009, South Africa has taken its place within the BRIC (now BRICS) group. While this is all fine and well, there are two questions for many people outside of South Africa:

1) Why consider South Africa as one of the leaders among developing economies?

2) Why should any of this matter to the point that I read this blog?

Let’s start with the first one, because it should help answer the second one. On the surface, that question is very difficult to answer. Let’s look at a few facts:

First, Africa is home to a billion people – over 15% reside in Nigeria (more than Russia, and 3x that of South Africa). Nigeria is experiencing massive internal growth and international exposure due to its oil deposits. Additionally, the Nigerian National Petroleum Corporation(NNPC), which is the company Nigeria runs all state oil work through has put in an extensive governmental protection package that requires 70% of all jobs in the oil business be locally-sourced. This localization model ensures that a solid, sustainable infrastructure for Nigeria (and its people) will be in place for the future.

Second, Mexico (who along with Brazil, India, China and South Africa makes up the G8’s Outreach Five) has an equal global footing to South Africa. Plus, Mexico has significantly stronger ties to the United States – a country that is a major trade partner with all of the original BRIC nations.

Finally, no other country in Africa has a reputation more tied to the colonial past of the entire continent than South Africa. While public perception changes much slower than reality, South Africa is still viewed by many on the continent with a negative eye. By asking them into the BRIC, they would become the de facto voice of the continent.

However, when you dig below the surface, the reasoning for this decision is quite clear, lucid and significant to the way global companies can move their product into international markets, especially organizations based in the United States. Here’s why:

First of all, South Africa’s GDP is the largest on the entire continent. Despite the fact that Nigeria has triple the population, South Africa still maintains a GDP that is almost double that of Nigeria ($422 billion US versus $247 billion US)[1]. This is a significant fact, not at all lost on the BRIC countries. Additionally, Nigeria’s presence on the global petroleum stage would put it in potential conflict with Russia, whose main export is also petroleum. Part of what makes BRIC work as an entity is the fact that none of them share the same skill set, main export, etc. This creates an environment of cooperation.

Second, Mexico’s ties to the United States actually hurt them in this decision. While Mexico has a GDP that is triple that of South Africa’s[2], its main reserve currency is the USD. The four main reserve currencies in the world are the US dollar, British sterling, Japanese yen and the Euro. However, the latter three are usually held only for the purposes of covering any potential loss on the USD. The four countries decided in Yekaterinburg, in 2009, to institutionalize BRIC through regular summits, ministerial meetings and contacts between central banks. Their primary aim is to remove the US dollar as the world’s main reserve currency following the global financial crisis and recession originating in the US. South Africa’s Rand (ZAR) is one of the most “floated” currencies in the global marketplace.[3] Thus, the ZAR provides the BRICS with a proven, alternative currency that could be used as a reserve currency in lieu of the US dollar, or their own national currencies.

Finally, while South Africa may be still restoring its surface image, it does have something that no other country can claim – access to the continent of Africa. South Africa is the largest investor in other African countries. South African companies have operations in over half of the other countries in Africa[4]. Engaging South Africa gives the BRIC countries access to an additional 1 billion people. There is no other country that can provide that type of access with such immediacy.

So, why does it matter that South Africa was chosen? Well, from a global business perspective, companies based in the US have a new point of entry to Africa, but also to the other BRICS countries.

As an example for medical device and pharmaceutical companies, the regulatory and competitive environments of Brazil (MERCOSUR), China and India create a significant amount of front-end entry costs, and typically deliver lower than expected ROI. By moving into South Africa, where regulatory environments are more favorable, companies have an established beach head. The explicit partnership between these nations can generate favorable gains for US-based products.

Additionally, for retail goods, engaging with South Africa provides a stepping point for product demand in all of these countries. Acceptance of your product, or service, in South Africa now sends a more significant signal to 4 countries that make up 18% of the GDP and 41% of the world population.[5]

So, while adding an “S” to BRIC may not make the average person put down the spoonful of cornflakes in the morning, this is a significant turn of events for the global economy and powerbases. We would be remiss not to take notice and cast our eye on the actions that come out of Sanya City, PRC (home of the 2011 BRICS conference).

Hey y’all (I am from Texas, so that is a proper greeting) J

Anyway, I am here at SDL Innovate 2011 a Day 2 has kicked off with a bang. I am listening to Toby Bell, Vice President at Gartner Research (and admiring his hair – I am so jealous). He has absolutely captivated the audience. His presentation is called “Online Channel Optimization” and he is focusing on how the User Experience and how it directly impacts new sales growth for clients.

Automated translation.

There, I just called out the big pink elephant in the corner of the room. Now that we have that out of the way, let’s talk about why I said those two words. Sitting here at SDL Innovate 2011, I am surrounded by 100 people asking questions to Travis Renker from Dell and Michael Potts from SDL Language Weaver. These audience members are conquering the “fear” of MT… or at least walking down the darkened hallway while eerie music plays in the background.

Sitting at SDL Innovate 2011 and listening to Len Larsen from Starbucks is a real treat – much like the pumpkin loaf, with a pumpkin spice latte (and extra pumpkin). Needless to say, I look forward to autumn specifically because of Starbucks. He is talking about the history of Starbucks, and it is amazing. How did a locally-owned coffee production center in Seattle, WA to the single-most recognizable global brand for coffee drinks? It was Howard Schwartz, an innovator who was inspired on a trip to Italy.

Sitting in the back of SDL Innovate (#SDLinnovate), I am able to see a microcosm of our modern society. Mark Lancaster is talking about how SDL is linking the world through the SDL vision of “Global Information Management.” He mentioned the “engagement challenge” - I am not actually using my hands to make the quote signs for those currently here in Santa Clara, CA. J Anyway, as he talks about the global content cycle and the amount of content that companies are pushing out to the market there are at least 50 people in my direct line of sight that are posting his words on their laptops, netbooks and smartphones. How many people just “heard” what Mark said? I believe far more than the 300 people sitting in this room at the Marriott. If each of these people has 7 people following them on Twitter, we have just doubled the number of people aware of Mark’s statement. That is just phenomenal.

This morning I chaired a panel discussion on localization best practices in an Agile environment. Hosted by Proz Translations, the panel included individuals from both the client and vendor sides of the house:

Anssi Ahlberg from Nokia – Finland
Larry Kunz from SCI International – North Carolina
Mary Nurminen from Lionbridge Technologies – Finland

We had a very interactive audience, and the conversation covered a number of agile-specific issues related to localization, including: