Risk management framework for outsourcing in the defence sector: a case from India

A nation automatically becomes strong if it has self-sufficiency to fulfil its defence requirements. India is moving in the direction to attain self-reliance in the defence sector. The aim of this paper is to analyse the critical issues faced in outsourcing by an organisation in Indian Defence Sector and extend easy, quick, complete and practically implementable risk mitigation strategies for enabling better decision-making. In this research, a list of 20 risk criteria is finalised on the basis of the literature survey and expert’s opinion. Analysis in this research shows that, three criteria which can seriously affect the outsourcing are Material shortage risk, Quality Risk and On-time delivery risk. The paper employs an integrated framework which includes ‘Grey Theory, Failure Mode and Effect Analysis (FMEA) and Risk Management Matrices’ for a comprehensive risk management in the defence sector. The paper delivers a 10-point risk management action plan to counter the various problems faced during outsourcing in the defence sector, especially in the Indian context. In brief, this paper investigates the various important issues related to outsourcing, which are faced by organisations working in Indian Defence Sector and extends a practically implementable methodology to derive a practically amicable solution for the case organisation.