Digitisation to create jobs and not lay off workers: L&T's HR exec Sriram

In late March, even as Larsen & Toubro (L&T) was plotting the launch of a hostile takeover bid for software services firm Mindtree, the engineering conglomerate announced its latest internal digitisation initiative, L&T-NxT.

Under the scheme, the Mumbai-based group that is more than seven decades old is looking to brace up for Industry 4.0 through rapid digitisation.

The $20 billion entity, which has over 42,000 employees -- 65% below 35 years of age -- has been criticised for its relatively analogue work culture that critics say may not gel with the digital way of life at L&T’s target firm Mindtree. With the high-tech acquisition coming up, and the conglomerate launching a digitisation drive, the human resources (HR) team at L&T is gearing up to undertake virtualisation of the workplace as well as dispel any fears or concerns among employees.

In an interview with TechCircle, Yogi Sriram, senior vice-president of corporate human resources at L&T, says that the company has undergone several digitisation initiatives in the past that ended up with zero layoffs. And the latest initiative is not different, says Sriram, who is also a member of the executive committee. He claims that the digitisation drive will create several new jobs and result in better use of skills and competencies, paving the way for growth. Edited excerpts:

What will be the role of the HR team in making L&T-NxT initiative successful?

The role of HR is to identify, retain and build a highly creative talent pool from within the company and from outside. The objective is to build up capabilities in the L&T-NxT team, which will evolve from an in-house solution provider to becoming a business entity that can scale up. Right from partnering with business in evolving the organisation structure, roles of individuals and workflows, our team gets involved. As of now, we are engaged in finding the right talent for this initiative under the leadership of JD Patil, a full-time director of L&T who heads the defence business unit. Eventually, the programme will develop its own structure, a work culture that is appropriate for the new technology world.

What kind of re-skilling have you undertaken internally to make this possible? And, how long will it take?

There is no separate training on digitisation. As a technology-driven organisation, we have implemented digital processes across our businesses and functions such as project execution, design and engineering, project control, supply chain and asset management, skill inventorisation, analytics, and safety management for attaining higher efficiencies. Today, most of our businesses have adopted operational models that adopt digitisation as a major part of their strategy.

All enterprises sit on large hordes of data. What kind of initiatives are you conducting to create a digitally-aware workforce?

Today, everything is available on one’s smartphone. We are utilising digital technologies in diverse areas like machinery, design and engineering, geographical surveys, materials, logistics, maintenance, field execution, labour workforce, safety, customer relationships, and documentation. Many of the digital solutions provide information and insights; some in real time about the status of activity and alerts. We also see analytics, trends, patterns and statistical measures emerging from these vast amounts of data that point to such possibilities.

Through analytics, we are attempting to gain the visibility of unknowns ingrained in the data housed on our internal platforms and leverage the same to get insights that would serve as the lead indicators of business performance. In line with this, we have initiated multiple use cases such as market sentiment analysis, commodity forecasting and financial health analysis to help us strategise and plan the way forward.

Has smartphone emerged as a critical component in the digitisation strategy?

Yes, we are using smartphones for visibility of project progress. For instance, the status on all metrics for monitoring so that we can improve the utilisation of assets, material logistics, workmen deployment status, actual progress versus plan, cost control, analytics to predict calling rates at the touch of an app or safety monitoring. We have connected equipment, workmen, safety training, material tracking, progress monitoring, quality, plan versus actual and analytics integrated into a smart project management system. We have extensive use of efficient dashboards accessible to all from site engineer to chief executive on a smart platform. Also, for smart and efficient procurement, we have created a platform called ConstZon. This platform, which is the proprietary property of the company, provides analytics-backed decision support for efficient sourcing and procurement and standardisation for reaping the benefit of scale. Procurement is a key driver known to have the maximum impact on the cost of a project. Hence, standardisation and use of analytics for decision-making drives efficiency and, once realised, it drives usage of this platform for attaining cost efficiencies.

What are the challenges in building a digital workforce?

We have heard of misplaced anxiety from some people (outside our group) about digitisation ending up in job losses. However, like the wave of computerisation, automation and robotics, we believe that Industry 4.0 will create new opportunities and make jobs more efficient. Our overall performance and strategic plan have clearly demonstrated that digitisation, in fact, enhances business growth including creating several new jobs. It has also resulted in better utilisation of skills and competencies paving the way for growth. This gives our workforce an opportunity to improve their skill set. Most of our workforce harbours this belief.

How do you overcome age-related challenges when it comes to technological changes?

What we see these days is that the world is more concerned with the phenotypic (phenotype is how genetic and environmental influences come together to create an organism’s physical appearance and behaviour) age of an individual rather than the chronological age. Older employees, through reverse mentoring, can use technology effectively. Younger employees feel very comfortable and engaged with digitisation to innovate and create value.

Is this comparable to any other group-level initiatives undertaken in the past? Technological or otherwise?

We have been one of the largest incubators of business ideas and have built almost all of our businesses like that. This has kept us in good nick with a healthy portfolio mix and growth. In recent years, our technology business divisions -- L&T Infotech, (now LTI), L&T Technology Services -- as well as L&T Finance, were incubated, scaled up and grown into a critical mass, becoming 100% owned subsidiaries. Later on, these firms were listed as independent entities. This strategy is for a focused approach to business growth, an independent strategy, for enabling these entities to develop their own unique organisational culture, talent acquisition strategy, growth and governance. They all went through a similar process in their early years of incubation.