In order for companies to cut costs and to control expenses, they may decide to move computer-related functions from within an organization to an outside environment. According to Robert B. Chapman in Insourcing after the Outsourcing, outsourcing encompasses the movement of any part of MIS functionality to an outside agent. MIS, according to the author, includes not only computer operations and systems development, but also product development for user departments, strategic planning for the corporation, maintenance programming, corporate communications and forecasting efforts of all different types. External vendors can be large consulting firms such as EDS, IBM, and Accenture as well as another organization in the same company.

Outsourcing ventures can be classified into three categories: support system, back-office systems and company lifeblood systems. The success of outsourcing according to most experts depends on whether the outsourced activities are in the core area of the organization. In fact, most outsourcing would fail if the company lifeblood systems depend on it: examples are on-line reservations systems for the travel industries, deposits systems for banks, and loans systems for banks.