Indian Economy

The year 2020-21 has been an unprecedented one. The Covid-19 pandemic is the severest global health crisis of this century, endangering the whole of humanity and resulting in a substantial weakening of most economies.

The Indian economy witnessed its first ever technical recession in the year FY 2020-21, with gross domestic product (GDP) growth remaining in the negative territory for two consecutive quarters. Lockdowns and travel restrictions imposed significant supply-side constraints on the economy, drastically reducing output and employment.

The Government announced multiple financial measures and structural reforms at different stages of the pandemic towards calibrated fiscal support during lockdown and to boost demand during the unlock phase.

With an aim to speed up the economic normalisation, the Government accelerated the public investment in the key infrastructure sector. The wheels of India’s capex cycle were set in motion with a strong revival in investment-led growth supported by the ‘Atmanirbhar Bharat Mission’ and a massive boost to infrastructure and capital expenditure provided for in the Union Budget 2021.

Apart from economic reforms, the government also implemented various structural reforms in the country covering sectors like Agriculture, MSMEs, Labour, Power and Industry. The agricultural sector remains the bright spot of the Indian economy. However, the surge in commodity prices is expected to create some cost pressures.

With the economic activity gaining momentum post the Covid-19 lockdown, the measures announced by the government and rollout of coronavirus vaccines resulted in an uptick in economic sentiments, but the resurgent Covid-19 second wave has put a dampener on India’s growth trajectory. Hopefully, the country should be in a position to control this second wave of Covid-19 infections and, with progress in vaccination and strict implementation of prevention and detection protocols, the country should be on the growth track for the larger part of FY 2021-22.

Global Economy

The onset of the Covid-19 pandemic led the entire global economy into a recession that is unprecedented. Growth suffered broad-based deterioration with a decline in global trade and marked slowing down in the manufacturing and services sectors across the globe. Contact-based services were majorly affected and, with travel restrictions imposed to contain the spread of the virus, service sectors like airlines, tourism, hospitality, etc. were the worst hit.

On a positive note, the accelerated progress in vaccination efforts and generous fiscal support is ensuring that many of the developed nations regain ground and bring the economy back on the growth track.

Digital @ L&T

The hallmark of digital transformation at L&T is in its business benefits, widescale adaptation and innovation. The seeds which were sown for digitisation have started showing results, as was clearly evident during the Covid-19- led lockdown. With the help of digital technologies, L&T not only continued its activities, but also made rapid strides into multiple areas and created superior experience, internally and for external customers. These transformations have positively impacted all areas of the value chain, including core business areas such as tendering, engineering, procurement, construction, manufacturing, operations & maintenance, safety, quality, customer experience and enabling functions such as human resources, finance and administration.

While the digital solutions deal with several cutting-edge complex technologies, they have been encapsulated into easily adoptable ways. This has resulted in larger deployment of various solutions. More than 75% of the workforce across all levels use these digital solutions.

As several solutions that were deployed have matured well, a new plan is in place to productise these solutions and make them useful to a wider client base. The industry is moving towards integrated solutions to realize higher benefits than the traditional siloed solution. The digital solutions are imbued with several years of domain knowledge that L&T has gained while executing multiple projects. New innovative experiences are added to these solutions using new-age tools like Artificial Intelligence, Machine Learning, Computer Vision, etc.

The IoT-based Asset Insights solution, which continuously monitors more than 11000 nos. of site / construction equipment, machines and devices, is enhanced with predictive analytics algorithms which provides alerts of any failures in advance. This helps in reducing the downtime of the equipment and achieving higher operational efficiencies. The solution is also enhanced to cater to different uses, from basic monitoring to more advanced edge analytics solutions where multiple parameters of the equipment are monitored at a very high fidelity rate.

The AI-powered Unmanned Weigh Bridge (UWB) solution is enabling conventional weigh bridges to be operated in a completely automated mode without requiring a human operator. This is achieved by leveraging computer vision for Automatic Number Plate Recognition (ANPR) and AI-based object detection and retrofitting this on conventional weighbridges. It is an end-to-end solution that also integrates with the Material Inward System and multiple weigh bridges within a plant to consolidate all weighment transactions. This enables quick deployment and helps provide a real-time view of material flow – right from entry till the point of material unloading. Unmanned weigh bridges are being rolled out into plants, construction sites, etc. The integration of this solution with the ERP has reduced the possibility of pilferage, erroneous entries, etc.

Quest, a solution based on Conversational Artificial Intelligence (AI) & Natural Language Processing (NLP) sits on many field personnel’s mobile devices. The solution uses Natural Language Processing to understand a question asked in plain English and to find the most relevant answer. This has eased the work of the site personnel by providing correct information without any delays.

Lexis, an Image Processing and Natural Language Processing platform has been helping employees comprehend and process the information in multiple bulky documents in a quick manner. Business units are using Lexis to compare lengthy spec sheets for equipment from multiple suppliers and identify gaps from customer requirements, while yet others are using its image processing capabilities to comprehend and auto-identify BoQs from P&ID (Piping and Instrumentation Diagrams).

AR-based remote assistance: Augmented Reality (AR) has significantly improved the organisation’s capabilities with respect to real-time support and assistance. AR-based remote assistance uses AR and video streaming to enable experts to guide and assist field personnel in real time. This allows experts to remotely solve challenging issues on complex equipment thereby seamlessly bridging the physical and digital worlds. This has worked out very well during the current pandemic situation. Some of the businesses use cases that are addressed by the solution are commissioning assistance using pre-defined SOPs, assisted maintenance operations and routine inspection support for complex machinery.

Design Optimisation is the process of finding the best design among the set of all feasible designs that would work for a given set of constraints. The chosen Differential Evolution (DE) Algorithm is based on bio-inspired computing and is an evolutionary optimisation algorithm which iterates through generations of feasible solutions. It uses the ‘Survival of the Fittest’ theory to find the most optimal solution. The solution is deployed to create the most optimised design for various construction use cases – especially foundation design of substation and transmission lines as well as structure, and foundation of solar farms. It encompasses the design norms not only for domestic standards but also for American, British, and European standards.

The solution has produced up to 15% savings in cost and close to 25% reduction in design time. In addition to this, the solution has enhanced the consistency and accuracy (quality) in the design approach, as it removes human errors in the design process.

Geospatial Technology has been a powerful tool to deal with this pandemic by ensuring frictionless business continuity. It helps to create a Map to Plan solution, designed to help project teams to identify sites in pandemic green zones for resumption of work while also helping the HR teams to map employees around red zones to ensure workplace safety. Among the operational initiatives, the open-yard management solution helps in end-to-end material management in an open place including material receipt, individual tagging, storage, location tagging with a high accuracy external GNSS (Global Navigational Satellite System), internal transfer and delivery of the material. Digital solutions also cater to Structural Health Monitoring and distress mapping using LiDAR scanning, providing 3D models for an area of more than 3.5 lakh square kilometres, with more than 8000 scans and 6000 as-built design drawings for release.

In addition to the above areas, L&T also achieved an exciting milestone by implementing Aerial LiDAR survey and sub-surface investigation for the first-ever bullet train project in India. The geospatial team won the FICCI award for Geospatial Excellence for Business Applications. Further work is happening on automated drone operations for remote surveillance and inspection purposes.

The Path Forward

Digital technologies have been gradually infused into the operational processes in L&T and have become a way of life. Every L&T facility – be it a factory, a project site or an office – uses multiple digital solutions that have been seamlessly integrated into their day-to-day operations.

The solutions are being transformed into an integrated platform which combines man, machine and processes together to reduce the downtime of the equipment, increase worker productivity, automate workflows and provide more insights for informed decisions. Digital transformation at L&T is at a stage where opportunities are continuously being identified and innovation deployed. New benchmarks are set with the integrated approach through all these digital technologies.

Information Technology

The pandemic has upended all traditional business models and has thrown up a new set of challenges. In the changed landscape, the IT function across L&T rose to the challenge, supporting the business during this critical time.

WFH (Work from Home) was the norm during FY 2020-21 where IT supported the businesses by ensuring secure and continuous access to the workplace from anywhere and anytime. Adequate training to employees was provided to deal with this new situation. The result was a very high level of employee communication and collaboration through the digital mode. This culture shift has had the positive impact of improved productivity.

Today, technologies are on the cusp of a Digital ‘Perfect Storm’. These events force entities to re-think how IT is consumed at the enterprise and elsewhere; the previous such ‘Perfect-Storm’ was when all systems started getting connected 20 years ago on private and public networks and the information scarcity suddenly turned into an information deluge for everyone.

The second such storm has begun, which is the digital transformation of the business. This has already led to new applications that are being created rapidly using digitally disruptive technologies such as Artificial Intelligence, Machine Learning, Robotic Process Automation, Process Mining, Data analytics, IoT, etc. to empower real-time information in order to make informed decisions, thereby lowering the cost of doing business, improving customer experiences and improving employee productivity.

Thus, it is imperative that IT is on top of new and evolving technologies to ensure they can be leveraged ahead of the curve to provide the competitive edge to the business.

While adapting the new technologies, it is important that it is done in a safe and secure manner. The Chief Information

Security Officer (CISO) organisation has been strengthened, scanning old and new landscapes for new cyber threats and constantly working with stakeholders to reduce and mitigate the risk. The enterprise is working steadfastly on a multi-year cyber security assurance framework to uniformly ramp up cyber security controls across all businesses.

While the digital transformation permeates across L&T, IT stands ready to collaborate with its businesses to enable them to retain their competitiveness and stay ahead of the curve.

Human Resources

Talent is the biggest anchor and differentiator for the business success of the organisation. The Company was able to face the challenges arising out of the Covid-19 situation primarily due to its committed workforce, a leadership that inspires and gets the best out of talent and the Company’s people-led philosophy and practices. This enviable combination of talent, commitment, leadership and culture continues to give L&T a competitive edge and helps exceed performance expectations. L&T’s ability to surpass expectations in a diverse business landscape that includes engineering, projects, manufacturing, and services is a shining example of managing a truly diverse talent pool.

This improved performance has been achieved through a core belief in attracting young talent and grooming them in-house. Further, L&T’s best-in-class and award-winning people practices give life to this core belief and philosophy. L&T’s talent management framework comprises the core building blocks of attraction, development and engagement.

L&T continues to attract the best engineering talent from top-tier engineering campuses across the country, on-boarding them as Graduate Engineer Trainees (GETs) and putting them through a rigorous 12-month process of acclimatisation and training. L&T’s Performance Management System, aptly named FAIR (Framework for Linking Appraisals with Incentives and Rewards), ensures that top-class talent gets visibility and contributes to a meritocratic environment.

The Leadership Development Centres, pivotal to the Company’s core philosophy of grooming internal talent, ensures that the right leadership talent is identified through an intense and objective process. The structure, content and methodology of such Centres are periodically revisited to ensure that they are contemporary and aligned with the growth aspirations of the Company. The deployment of these Centres is now through a digital platform,

ensuring an expanded reach, cost savings and flexibility to seamlessly induct external expertise. The Centres provide a developmental experience to the participating employees and reinforce the collaborative approach to talent enrichment. HR interventions such as these are used for talent management, succession planning, training and leadership development.

The Company’s signature Seven-Step Leadership Development Programme is an established best practice in talent development. It continues to identify, train and nurture young managers to develop broader business perspectives, appreciate new business opportunities and accomplish challenging tasks. This flagship programme provides young employees with high potential access to curated learning experiences delivered by reputed thought leaders from Indian and international business education institutes. The Action Learning Projects that participants undertake offer immediate opportunity to apply learnings in live business improvement projects and be part of breakthrough and high-impact outcomes. They bring participants in close working engagement with senior business leaders and help assimilate the finer points of business strategies and leadership attributes. The emerging leaders who move up the Seven-Step Leadership Programme are mentored by senior executives including the Group Chairman, CEO & MD and other Directors and Business Heads. This ensures a robustness in the continuity of leadership thought process and value systems among promising talent.

L&T’s world-class Leadership Development Academy (LDA) at Lonavala is a sought-after facility for employees to hone their supervisory and managerial skills. Many of the marquee residential leadership development programmes are offered in this sprawling campus that boasts of an unmatched learning ambience. The LDA delivers business centric skills and capability-building programmes that impact the quality and innovation evident in L&T’s business deliverables.

The Corporate Technology & Engineering Academy (CTEA) at Madh and Mysore, perform a critical role in bridging the domain skill gap of young engineers. The custom-built training programmes focus on developing technical competence by providing practical hands-on training in contemporary technologies and make the employees task-ready.

L&T Institute of Project Management (L&T IPM) at Vadodara leverages L&T’s wealth of knowledge in conceiving, planning and executing mega-scale projects. IPM seamlessly

disseminates its best practices repository on Project Management with practising and budding project managers in L&T. This has created a cadre of well-trained and certified project managers equipped to take up challenging projects and deliver them with excellence. IPM has now established the Knowledge@Work platform tailored to provide project execution related knowledge assets in digital form.

The Company has a matured Safety Education Programme that is designed to build and strengthen a culture of safety at workplace. Ensuring safety for its employees and workmen is a critical objective. The Corporate Learning & Development team offers specialised programmes to train employees on Safety and instructs them on how to integrate safety into every aspect of work. The Company has partnered with the National Examination Board in Occupational Safety & Health (NEBOSH) and The Institution of Occupational Safety & Health (IOSH) to develop internal training capabilities in EHS and is an accredited course provider for its employees on diverse aspects of industrial and project safety.

L&T has established a scalable, multi-featured and externally integrated Digital Learning Platform called ATLNext. This has emerged as the bulwark of remote and real-time learning in the organisation. The platform makes use of Artificial Intelligence and Machine Learning-driven learning algorithms. It has access to curated course content from global learning publishers and has been successful in inducing the culture of learning among L&T’s employees. This platform has seen continuous enhancement and wide acceptability, winning many prestigious industry awards in the segment of digital learning.

The journey of HR Digitalisation has made substantial progress this year, and the cloud-based platform implemented in earlier years has become a single source of employee data and a robust anchor for current and future talent modules. This digital platform has become a go-to forum for employees for life-cycle transactions, performance management, development plans and employee-connect initiatives, including during the remote working mode. The Company is in a position to derive real-time talent dashboards for the corporate leadership team.

The tenacious focus on developing talent for business excellence was balanced with care and concern for its people. The HR function in the Company played a pivotal role in designing and executing its response to the Covid-19 pandemic. Multiple initiatives were crafted and implemented to continuously communicate pandemic specifics to the employees and their families, extend medical