The $16B L&T Group is India’s premier engineering group with activities spread across engineering construction, realty, electrical and automation products, IT services, industrial machinery and equipment, materials, engineering services, and financial services.
The L&T group has evolved over the years and achieved market leading positions in many of the markets. Along with that, the group had developed competencies and capabilities in various areas that when combined created opportunities to address new markets.
Identifying the Engineering Services Specialty
L&T Technology Services was created in the early 2000s as a contract engineering services company. In 2011, the group was reorganized into 3-4 business units based on bringing domain-based skillsets together. For example, IT got separated out into L&T Infotech. Though L&T Technology Services (L&T TS) had strong IT-led product and process engineering skills, with $50M revenue and 2000 people, it was run as a separate subsidiary focused on engineering services headquartered out of Vadodara, Gujarat in 2009.
In the same year, when the company hired Amit Chadha as the business head of Americas, it was clear that the company was looking at growth coming in from global markets. Amit Chadha’s experience was in the global IT services market having worked with companies such as Mahindra Satyam (erstwhile Satyam) in manufacturing, energy and utilities, selling large IT outsourcing deals. Amit’s mandate at L&T TS was to drive sales and be the rainmaker for the company.
But the terrain was different from IT services which needed industry domain knowledge and knowledge about application platforms.
At L&T TS, Amit was thrown into multiple disciplines of engineering— mechanical, electrical, structural, civil, piping, and electronics amongst others. Amit’s background in business technology and services shaped L&T TS growth pattern for the future.
Today, L&T TS has grown 10X in revenue and 5X in manpower to clock half a billion dollars with 10,000 people within eight years. In FY17, the company’s annual revenue rose to INR 3248 crore with a net profit of INR 425 crore.
The management attributed the growth in digital business to the company’s intellectual properties & platforms such as UBIQWeise, i-BEMS, UBIQData for business analytics and its next generation wireless protocol solutions.
Evolution from Engineering Services to Digital Engineering
L&T TS now calls itself as a ‘digital engineering’ company. Digital engineering is the counterpart or rather the base of the holy grail of digital transformation organizations are trying to achieve.
Says Amit Chadha, President-Sales and Business Development, “The digital wave is upon us and everyone is trying to find their own ‘Uber moment’. We call it digital engineering and we have launched in the marketplace a portfolio of offerings across the digital engineering spectrum— smart products & services and smart manufacturing. The launch of digital solutions portfolio will enable enterprises and R&D organizations to leverage prebuilt accelerators and solutions to strengthen their product offerings.”
Amit explains the transformation of the company from an engineering services company in 2009 to a digital engineering company in 2017. The first phase was from 2009 to 2012 when the company rode the wave of product development, not from a cost reduction or efficiency point of view, but from an innovation perspective. Amit gives the example of a surgical stapler they developed for a global company to illustrate the innovation part.
L&T TS was already a significant player in the outsourced/ offshore product development market that preceded 2009, which was about faster and cheaper product development. If patents are a measure for innovation, Amit proves the point by saying that the for the financial year the total number of patents filed and added tallies to 254 out of which 197 have been co-authored with customers and 57 are owned by L&T TS.
Then came the phase when the wave shifted from developing products for developed markets to localizing products for emerging markets. An example of this is the ODC for Scania, a Swedish bus and truck manufacturer. L&T TS opened Scania’s ODC in India, with approximately 100 development engineers, primarily focused on localizing and adapting Scania’s buses and trucks for the Indian market as well as for other emerging markets. The ODC divides its resources equally between buses and trucks. In buses, the focus is especially on the locally produced Metrolink. Scania has decentralized its bus body engineering to its production facilities, which in addition to Bengaluru are located in Finland and Poland. In trucks, the designers also work with design adaption for the Indian market and incorporating domestically sourced components.
Around 2012, the telecom division of L&T Infotech that dealt with embedded systems and product engineering for telecom, was merged into L&T TS. By 2015, L&T TS had a clear cut focus on serving five industries: transportation, industrial products, telecom, plant engineering, and medical devices and life sciences. The time was also ripe to capitalize on the digital wave. The IoT wave had also set in as part of that and the combination of digital technologies like IoT, AR, cloud, analytics gave rise to the ‘digital engineering’ opportunity that the company now talks about.
Recently, L&T TS acquired San Jose-based Esencia Technologies Inc, a provider of design services in digital signal processing. The acquisition will deepen L&T TS offerings to global customers, particularly in the realm of perceptual computing, Internet of Things, advanced silicon products and wireless networking technologies. Esencia has a team of over 100 Embedded, ASIC design and semiconductor experts in Silicon Valley.
Digital Engineering through Augmented Reality
L&T TS offers MARS (Mobility and Augmented Reality Services) for many of the verticals it serves. MARS offers development of mobility strategies and AR solutions to enable anywhere, anytime access to OEM product data and enterprise information systems. Says Amit, “We are pushing the envelope in Augmented Reality– We are witnessing the growing adoption of Augmented Reality (AR) technologies in mobile devices and wearables like glasses, watches, bands, and helmets. This is well-illustrated by the ability of devices to access context-specific information online like user manuals, training details, asset information, and product catalogues.”
A unique offering is Personal Protection Equipment (PPE) solutions that cover sensor based wearables such as smart helmets and smart jackets that can monitor and ensure safety of workers in potential hazardous workplaces. PPE finds use in industries like construction, mining, oil & gas, factories, manufacturing units and warehouses.
Says Amit, “The PPE solution is an example of IIoT. Devices such as a “smart helmet” is an Industrial IoT wonder increasing connectivity between people, data and machines. The onsite engineers can wear the smart helmet and other accessories such as smart gloves, jackets and shoes all of which act as smart sensors and transmitting devices, enabling the worker and the people at the central offices to stay connected.”
The IoT-enabled Personal Protective gear, an example of advanced wearable technology for industrial usage, employs a Zigbee interface mechanism whereby alerts and notifications are sent to both personnel’s and their supervisors in case of any breach. The company also plans to introduce PPE axillary services such as heart rate and pulse monitors wherein the health and behavioural patterns can be traced, thus ensuring worker safety.
Digital Engineering through Engineering Analytics
Analytics has been the buzz in business computing; its potential in engineering might be underrated so far. L&T TS has a slew of services in engineering analytics. Here are a few success stories:
• Demand Forecasting & Outage Management for Utility OEM – A predictive analytics solution that forecasts power demand based on historic data generation patterns – improved forecasting accuracy by up to 90%.
• Health Index Assessment of Power Distribution Transformers – A prescriptive analytics solution that analyses transformer parameters and provides valuable insights into asset health and operations – improved asset uptime by ~95%.
• Condition-based Maintenance of Rotating Equipment – Predictive insights into equipment health, operations and failures – reduced maintenance cost by 16%.
• Warranty Analytics for Heavy Machinery Assets –Analytics framework to analyse vendor performance based on asset field failures and warranty claims – brought cost savings of approximately $2 million.
Digital Engineering through IIoT
L&T TS has developed proprietary IoT solutions such as UbiqWeise and iBEMS in emerging technology areas to support its Global customers. i-BEMS is a framework that enables Net-Zero, energy generation management, predictive and preventive maintenance to help steer-away from energy consumption to energy generation and helps customers save upto 40 percent of energy costs. Intel is the company’s go-to-market partner for the platform iBEMS.
The UbiqWeise platform helps in moving data securely to the cloud with the potential to scale up solutions to numerous devices, thereby creating a complete smart home experience. L&T TS has designed a Smart Connected Thermostat that is Wi-Fi capable and controls all aspects of indoor air leveraging IOT, Cloud & Mobility solution using L&T Technology Services’ UbiqWeise platform.
One of L&T TS construction industry customers, who has various types of construction equipment and machinery spread across global project sites, collects operational data on a near real-time basis, which is then sent to a cloud platform. The data is then processed using applied analytics on its UbiqWeise platform to provide insights on information such as operational efficiency and preventive maintenance schedules.
For another customer, L&T TS provided smart services solutions in process improvement, waste reduction and improvement in yields. Its solutions are aimed at addressing specific problems by introducing advanced sensors and analytics technologies to detect anomalies at an early stage of production. As a result, its solutions enable reduction of the rejection rates of the products.