 "S N Subrahmanyan")
Larsen & Toubro, the country’s largest infrastructure entity, is undergoing a digital transformation. Leading the change is S N Subrahmanyan, deputy managing director and president, slated to take over as chairman next year. L&T is using technology to measure productivity of workers at construction sites, using data from sensors in machines to improve performance and position the firm as a solutions player, not only a builder of projects. Edited excerpts of an interview with Ayan Pramanik & Raghu Krishnan:
Where are you on the digital transformation?
There are three parts to it. The first is external, in Smart World and Communication. The second is what is L&T Technology Services and L&T Infotech. In Smart World, we have in the past two years emerged as the most dominant in the business of security, community and smart infrastructure. There is huge benefit accruing to both government and city municipalities.. Over five to 10 years, you will see a lot of momentum in this and plenty of smart projects are going to come.
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As an organisation, we have to make ourselves more online, more lively and intoxicatingly attractive to be where we want to be. Otherwise, you won’t attract the talent.
L&T Tech Services and Infotech are part of it; they also realise the world is changing and services is changing. In L&T, the basic domain knowledge is here. They can build solutions, and take it and tell the world, we have done it in one of the largest construction companies in the world, and we can do it for you.
What are those products and technologies?
Digital, we started in the past six months There were no readymade solutions. How do you put a reader to capture an RFID (radio frequency identification) and tomorrow a wall comes in? We've got to see the efficiency of it; all these have gone through a lot of pilots, many processes. In three months, we have done 700 assets. We plan to do 600 assets every month and are trying to increase that. Maybe in a year we will have 15,000 assets, maybe increase it to 20,000. For workmen, we have found a method to do it; the cost comes to around Rs 1,500 per person. It is a dynamic all my business leaders have to agree. We are addressing all these. Our partners can take it to the world
You talked about productivity improvement.
Construction is about Rs 60,000 crore. I'm attempting a two per cent cost saving; let’s see how it goes. A workman works effectively four hours and half an hour more; I calculate that across the length and breadth of the organisation, that’s huge saving. That’s all we are trying to attempt. I don’t have real data on this. Maybe we will in one year.
You think by the time you take the mantle of chief executive, you will be ready for the next wave of transition?
Why talk of transition? We are doing it right now. The chairman is fully aware of it; he is fully behind this, driving us crazy, saying, come on, get moving on this. Why wait till next year? We would like the results by March, maybe in the next budget we will include it. It is process happening now; next year, we will be demanding results out of it. We are not waiting for a leadership change. He goes around the world; we have a leader who is online.
What will be the bigger challenge?
In a big company like this, one has to prove that by doing this, there is a benefit. This (otherwise) remains office talk; it has to be conducted at site. I call my digital people and conduct meetings on the ground. We are taking it down to the ground level.
Will this help you to move from bidding for RFP-based contracts to integrated deals?
We were just doing hospitals — anybody can do a column, beam, slab and some granite. Then, we said we do concept and design for hospitals. We can tell them how many rooms are required for an ophthalmology hospital and so on and so forth. That is one step ahead. We found competition catching. Then, we decided that we will go to clients and develop patient technology. That’s what we are attempting to do and becoming a service provider.
How is the economy doing? Are you seeing good orders?
Much more transformation is required and I think it is happening. It is reasonably positive as we see it today.
Where are you on the Smart Cities business?
It is a business we started two years before. This year, it added about Rs 1,400 crore of sales. We can see it scaling up; by the end of 2021, it will become a Rs 5,500-crore business. It is a different kind of business, one where you converse between the physical and digital world. Of course, we will not get into the IT (information technology) part of it but the physical part; that will be done by Smart World.
