**5. Outsourcing ground rules for transport sector managers**

The operational environment in distribution channels is changing fast. The operations of a large transport company could be optimized in weeks by comparing its performance data having access to the competition and supplier's data are uploaded in a database. In contrary, examples of extensive outsourcing of highvalue functions are, for now, few and far between, with aviation and shipping be the pioneer sectors. In transport and logistics there is more room for outsourcing based on the market dynamics.

While considerable opportunities exist, transport enterprises need to prepare carefully and take into consideration a variety of strategic, business, operational and legal issues as well the key values of shareholders should be assessed towards deciding what functions or parts of function be beneficial to outsource. The key initials should be reviewed are:


The key challenges for transport enterprise managers in a fast-changing industry and into the existing regulatory framework are highlighted in the following paragraphs.

## **5.1 Data control**

Companies need to guard against outsourcing arrangements or partnerships that prevent them from adopting new technologies or contracting with new vendors. Data management is a great value for a transport enterprise so it's a of great importance to control data produced by its activity. Those with the biggest and best databases will be those with the best models and predictive power, able to outcompete others. Giving away data increases dependency on suppliers increasing company value at risk. Hence, the data management system architecture so they can change with the times as new and unforeseen options emerge. Any outsourcing arrangement must be structured in a way that enables the architecture to be flexible, compatible, and open oriented. Key success factor for pioneers is the developed data driven business intelligent tools to help build outsourcing services, tools that are sold to competitors. Deep consideration should be given in conflict of interest, non-disclosure agreements, intellectual properties, and information shared procedures, as mentioned in above section.
