What Do You Mean, Non-Core Activities?

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imageFollowing the discussions in “Uncomfortable, Thinking About the Cloud” (Pt. 1, Pt. 2), I was asked what I viewed as ‘non-core’ activities.  What type of services might a company outsource to a cloud-based service provider?

Core activities are those that define, are at the heart of a company. Common non-core activities are often viewed as functions like payroll, transaction processing, billing, and increasingly, records management.

For instance, a credit card company will often outsource the process of printing, mailing, receiving, and posting monthly bills. Their core skill is financial management, not running a mail room. (There’s a reason they tell you to NOT include correspondence with your payment<g>. )

The same thing is typical of a health insurance company. Their core value is the ‘process’ of executing claims transactions. Once a claim has been processed, documentation supporting transactions (industry variable) may need to be archived for 3, 5, 7, or 30 years. Storing documents with a <1% retrieval rate after six months is non-core. It adds no value, worse it’s an expensive distraction, and as such they may decide to outsource the activity.

One last example.  Stock brokerages may make available your past financial statements, 1099s, and the like, online. Odds are very good that, while it ‘looks’ like they are delivering the information to you, it is actually hosted, archived, and delivered to you seamlessly by a 3rd party service provider. It’s all done to look like it’s the company you’re dealing with. And, it should.

One thing to note, while you can outsource work to the cloud, you cannot outsource the responsibility that goes with it. Your medical provider, payer, and others in-between, cannot transfer their responsibility to whomever they pay to do the work for them.

Use of the cloud is already very pervasive.  The term simply wasn’t popularized until relatively recently.  What services have you, or your company, obtained through the cloud?

(photo credit: Viktors Kozers)