GALA's Member Pulse Survey, Second Quarter 2009

Request for Proposals

The section on RFPs probed respondents broadly on the process of answering RFPs directed to language service providers. As expected, more than 80 percent of members in the survey do answer RFPs. But the number they respond to each year varies greatly. Twenty-seven percent indicated they answer more than 50 each year, but 20 percent answer five or fewer each year.

Significantly, a full 75 percent of respondents responded that the biggest change they are seeing in RFPs is a focus on price. This was especially true among the European member companies who answered the survey.

Meanwhile, members gave us details on how they answer RFPs. RFPs are answered in 15 hours or less man-hours in most cases. While many respondents made an exception for large months-long requests, more than 20 percent said they spend less than two hours on an RFP in general. The number of employees assigned to answer RFPs seems to vary by region. In Europe and the Middle East, most respondents have two people involved in answering an RFP. In North America and South America that number increases to three, and in Asia a full 40 percent of respondents indicated that four people or more are involved in answering an RFP.

Online bidding has not become a major source of work for most respondents. In fact a full 70 percent reported no usage of online bidding sites. Those who do answer online bidding opportunities listed a wide array of sites that they use for sourcing work. 

Disappointingly, 46 percent of respondents indicated that RFPs lack enough information to submit a solid bid. The problems are wide, but lack of clarity and requests for excessive or unnecessary information were the most cited reasons. For example, one respondent commented: “There is usually a great deal of inconsequential information which really has no bearing on our ability to provide good quality work. For instance, one recent RFP asked us to list the number of independent translators we have in each language. We all know that most companies have access to a nearly unlimited number of translators, but that doesn't mean that we can provide good quality translations.”

So what constitutes an ideal RFP? Clear, concise and detailed requests that are well structured, say respondents to the survey. An overwhelming majority agreed that the most effective RFPs come from the IT industry. There was no consensus as to which industry puts out the most ineffective RFPs, although more than one quarter mentioned marketing and more than one fifth mentioned government.


The Economic Downturn

For the third quarter in a row, we asked members how the economic downturn has impacted them. The ripple effect of the downturn—where vendors feel the pain as large multinationals slash expenses—is now impacting a larger number of GALA members that we saw in previous quarters. The percent of respondents who said they are directly impacted by the downturn shot up from 57 percent the first quarter to 78 percent this quarter. Far fewer in North America felt a direct impact (55 percent) than Europe (83 percent) and Asia (85 percent).  

Interestingly, members appear to be adept at predicting the impact over three months. In the first quarter, 69 percent expected a somewhat reduced demand for services in the next three months, and, in fact, this quarter the same number of respondents reported a somewhat reduced demand over the past three months. Encouragingly, far fewer expect somewhat reduced demand in the next three months (38 percent) and a full 30 percent anticipate an increased demand in services compared to only eight percent in the first quarter.  

Other findings include:

• More than 82 percent of respondents have not cut workforce as a result of the financial crisis. There have been other reactions by many LSPs, including reductions in overtime and outsourcing, wage reductions and salary freezes.


• More than half of respondents (53 percent) report lower revenue compared to three months ago.


• Forty-four percent of respondents are optimistic about the next 6 to 12 months, while 15 percent are not optimistic and 41 percent are unsure.


• Similar to the first quarter, more than half of respondents have not had any projects or contracts canceled due to the economic situation. But there is a lot more downward pressure on price and some projects have been delayed.

 

The complete results, including the average number of RFPs member companies win and the impact the recession has had on net profits, are available for member companies to download at this link.  

GALA conducted the comparative survey to give members a snapshot of trends in the RFP process within the industry. The association began conducting quarterly surveys of its members last year in an attempt to increase the overall industry knowledge base, and it will continue to focus surveys on information our members want to know.