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Engineering and construction conglomerate L&T is following the path of global giants such as GE, Siemens and ABB to go beyond infrastructure and offer industrial Internet of Things (IoT) solutions to help improve the efficiency of industrial units with the help of digital technologies.
It is launching a new initiative, L&T-Nxt, which will focus on artificial intelligence, IoT, virtual reality, augmented reality, geospatial solutions and cybersecurity, and leverage the experience that L&T has garnered over the decades. L&T-Nxt has been identified as a select initiative in L&T’s five-year strategic plan.
With this move, L&T intends to enter the elite group of global MNCs that not only build large infrastructure projects but also help other manufacturing and engineering companies improve efficiencies with the help of digital technologies. GE, for example, started ‘Industrial IoT’ back in 2012 and now expects the global potential of the business to be around $225 billion by 2020.
In India, IoT can present an opportunity of up to $12 billion. Industrial IoT is expected to represent a larger share of the market than consumer IOT, according to a report by the Internet and Mobile Association of India and Deloitte.
“When you use digital, you can ensure people are trained in skills quickly with the help of augmented reality and virtual reality tools. Other technologies use sensors to improve efficiencies in manufacturing plants,” JD Patil, Senior Executive Vice-President (Defence Business) and Member of the Board, L&T, told BusinessLine . “We have been doing this in-house so far to improve our efficiency but whenever we speak to customers, we see they are looking at efficiency enhancement as well. That’s where we thought we need to get our domain knowledge and digital experience that we’ve mastered internally and offer it as an additional offering.”
Patil said the company has been working to build these technologies for the past three or four years and already has a team of about 200 people. But now they’ll be expanding rapidly.
“Couple of thousand is what we’ll be looking to hire as of now. But in two years time, we could have a different number. There’s a huge amount of interest we’ve seen in the market for a holistic solution. One would build depending on the quantum of business,” Patil said.
Independent entity
L&T’s two listed IT services companies — L&T Infotech and L&T Technology Services — already offer several of these services to global clients. However, Patil said the new unit will remain independent of the two IT companies within the group and would look at not just services but also building out digital platforms for large manufacturing units, building hardware and software for them and also offering consulting services.
“LTI and LTS will continue to work with existing customers. The new unit will remain an independent unit. If we win a big contract, within L&T, we share each other’s resources. We obviously pay for that,” Patil said.
“Couple of thousand is what we'll be looking to hire (for L&T-Nxt) as of now.”
JD Patil Senior EVP (Defence Business) and Member of Board, L&T.
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