We’re strengthening domains like Cloud, data, consulting, digital engineering

The shift in global business operations and corporate strategies during Covid-related pandemic enabled the rise of resilient IT solutions and Indian companies played a significant role in the sector. In a changing landscape of corporate functioning, C-suites across the globe focused on leveraging IT services to fulfil their clients’ immediate demands. In this backdrop, Indian companies emerged winners. But it is an ever-changing scenario and to understand the dynamics of global business operations in today’s IT enabled world, Outlook Money’s Rajiv Ranjan Singh spoke with Sanjay Jalona, MD and CEO, L&T Infotech, one of India's fastest growing IT companies. Edited excerpts: 

L&T Infotech (LTI) has registered good performance quarter after quarter. What are the future catalysts for your company? 

We are witnessing a secular demand uplift across industries and geographies. There is tremendous interest in leveraging the power of technology to scale an enterprise to newer heights. To continue building and scaling differentiated capabilities, we are strengthening our expertise in select domains such as building capabilities in Cloud, data, consulting, and digital engineering. On the Cloud side, we have made significant progress with LTI now at the highest levels of partnership with hyper scalers and partners like Snowflake. When it comes to data, we are investing in our data products suite and building strong data and analytics capabilities. These dedicated units, set up to address Cloud and data related opportunities, have created a good momentum. 

What are some of the macroeconomics and sector-specific factors where the IT sector performs well, as a whole? 

We believe the current industry growth can be attributed to three factors. First, the pandemic has led to what we call ‘The Great Restructuring’ across industries and geographies. Enterprises are embarking on new business models, and they are seeking partners that can co-create with them at speed. This is across verticals, geographies, segments, and companies. No other event has made such an impact on work, workforce and workplace as the events of the last 20-odd months have. Second, we are witnessing new areas of spending. For example, ESG (environmental, social and governance) has started playing a key role in business decisions and strategy. Cloud security is also seeing a lot of traction. Third, there’s a fundamental shift in retaining talent at the supply side. Organisations are doing their best to sail through the great resignation phase and ensure business continuity, thus creating opportunities for nimble partners like LTI to step in and solve their ongoing challenges. This has created an even greater opportunity for LTI to partner with customers. 

 What should investors look out for when selecting the IT sector or IT companies to invest in? 

This is a very difficult question. I have spent three decades in this industry and have witnessed the sector’s transformational power. I remain long on the sector. The Indian IT industry is very resilient and has made its mark on a global scale, even more during the pandemic. The way the sector supported global enterprises with critical operations is nothing short of a miracle. I believe the times ahead are exciting with a long-term, sustainable growth horizon and this should keep potential investors interested. Obviously, investors need to do their own due diligence, consider their risk appetite, and thoughtfully choose the companies with strong governance, track record and strategy. 

 What are the major challenges that LTI faces? How do you plan to tackle them? 

This is not so much of a challenge, but the industry must collectively solve the supply side challenges. We are witnessing once-in-a-generation opportunity to establish India as the leader in the technology sector; not only for IT services but product engineering, business process outsourcing, startups, SaaS and more. We are seeing more and more companies expressing themselves with new ideas using technology and imagination. Look at the recent IPO scene in India; it is incredible.  

We need a skill-based education system that prioritises emerging technologies. Also, there’s a need to focus on soft skills to develop global executives. The pandemic has removed several barriers that existed earlier – including those in the field of virtual education. This is the time to invest heavily in creating a more robust ecosystem to benefit millions of aspiring students. 

Operationally, we believe the hybrid way of operations is here to stay forever and will require adequate planning and preparedness. At LTI, we have adopted the ‘Ying-Yang’ model to better prepare ourselves for this future of work. Based on their role, customer requirements, and individual preferences, each employee is being allowed to decide how and where they would work. This model ensures a balanced approach in operating from home and office.  

We are confident that the Ying-Yang model will lead to seamless project governance, improved productivity, and better employee engagement. 

 What’s your view on Blockchain and cryptocurrencies? Are you bullish on new-age technologies?  

The relevance of Blockchain as a disruptive technology continues to evolve rapidly. Its applications now encompass a wider set of areas such as payments, identity management, insurance, healthcare and digitization of physical assets. LTI has a head start in this domain with our team of Blockchain experts and domain specialists enabling businesses to leverage the benefits of faster, more secure and more transparent peer-to-peer transactions. Altius, our Cloud unit recently launched the Infinity platform, which differentiates us and provides capabilities to deliver end-to-end Cloud adoption services.  

The recent acquisition of Cuelogic has strengthened our digital engineering offerings. Now, digital contributes nearly half of our business. 

 How are you developing digital transformation strategies for your clients and your own company too? 

The pandemic has shown that businesses with sound digital strategy are more resilient – both in terms of customer experience and employee experience. Time-to-market has become more critical than ever and that is a very interesting trend we are witnessing. Customers are seeking direct-to-consumer approach, workplace modernization, newer operating models, higher resilience, cost saving and enhanced security and privacy. 

Across industries, we are witnessing a massive pull-forward in the adoption of digital trends. We are responding with our strategy of ‘Solving for the Great Restructuring’, and we are doing it through four pillars: 

·         Helping customers leverage Cloud (we call it Unlimited Enterprise) 

·         Enabling customers be data driven (Cognitive Enterprise) 

·         Rethinking enterprise applications like ERP, CRM and SCM for the new age (Reimagined Enterprise) 

·         Redefining the IT operating model transformation through Agile, DevOps and Digital Engineering (Engaged Enterprise) 

 There are larger IT companies in the fray. How do you compete with them? 

In today’s world, speed and expertise are more important to enterprises, and those are the key attributes we bring to our customers. 

LTI is born out of Larsen & Toubro and that is where we derive our strengths, value system and all the expertise that we bring to the marketplace. This deep relationship gives us unparalleled scale and capabilities to compete globally. The L&T group is very diverse, and we get to implement innovative solutions and learn from new digital technologies that are adopted in various units of the group. This engineering DNA, industry knowledge and customer centricity, along with our agility, make us a formidable challenger. LTI has inherited a fantastic platform because of the focus, hard work and sacrifices that L&T leadership, especially A.M. Naik (non-executive chairman), S. N. Subrahmanyan (MD and CEO) and others, have personally made over two decades. Their guidance, support and, above all, confidence to think big and be audacious has been a great boost for us. We have invested on top of this solid foundation to make LTI one of the most client-centric and digitally focused companies.

Below is an excerpt of an interview with Sanjay Jalona, Managing Director and CEO, L&T Infotech with Outlook Money. 

1) Having consistently registered a stellar performance quarter-after-quarter, what are the catalysts for your company going forward?

We are witnessing a secular demand uplift across industries and geographies. There is tremendous interest in leveraging the power of technology to scale enterprise to newer heights. To continue building and scaling differentiated capabilities, we are strengthening our expertise in select domains, building capabilities oncloud, data, consulting, and digital engineering. On the cloud side, we have made significant progress with LTI now at the highest level of partnership with all hyper scalers and partners like Snowflake. When it comes to data, we are investing in our data products suite and building strong data & analytics services capabilities. These dedicated units to address cloud and data related opportunities have created a good momentum.

2) What are some of the macroeconomics and sector-specific factors where the IT sector performs well, as a whole?

We believe the current industry growth can be attributed to three factors – first, the pandemic has led to what we call ‘The Great Restructuring’ across industries and geographies. Enterprises are embarking on new business models, and they are seeking partners that can co-create with them at speed. This is across verticals, geographies, segments, and companies. No other event has made such an impact on work, workforce, and workplace as the events of last 20 odd months have. Second, we are witnessing new areas of spend. For example, ESG has started playing a key role in business decisions and strategy. Cloud security is also seeing a lot of traction. And third, there’s a fundamental shift on the retaining talent at the supply side. Organizations are doing their best to sail through the great resignation phase seamlessly and ensure business continuity– thus creating opportunities for nimble partners like LTI to step-in and solve their ongoing challenges. This has created an even greater opportunity for LTI to partner with customers.

3) State a few factors that are bad for IT Sector or time when investors should avoid investing in IT Companies

This is a very difficult question for me. I have spentthree decades in this industry and have witnessed transformational power of the sector. I remain long on the sector. The Indian IT industry is very resilient and has made its mark on a global scale,even more during the pandemic times. The way the sector supported global enterprises with their critical operations is nothing short of a miracle. I believe the times ahead are exciting with a long-term, sustainable growth horizon and this should keep potential investors interested. Obviously, investors need their own due diligence, consider their risk appetite, and thoughtfully choose the companies with strong governance, track record, and strategy.

4) What are the major challenges in front of your company? How you plan to tackle them?

Not so much of a challenge, but the industry must collectively solve the supply side challenges. We are witnessing once-in-a-generation opportunity to establish India as the leader in technology sector not only for IT services but product engineering, business process outsourcing, startups, SaaS companies and more. We are seeing more and more companies expressing themselves with new ideas using technology and imagination, look at the IPO scene in India lately, it is totally incredible. We need a skill-based education system that prioritizes emerging technologies. Also, there’s a need to focus on soft skills to develop global executives. The pandemic has removed several barriers that existed earlier – including those in the field of virtual education. This is the time to invest heavily in creating a more robust ecosystem to benefit millions of aspiring students.

Operationally, we believe hybrid way of operations is here to stay forever and will require adequate planning and preparedness. At LTI,we have adopted the ‘Ying-Yang’ model to better prepare ourselves for this future of work. Based on their role, customer requirements, and individual preference, each employee is being assigned a persona to decide how and where they would work. This model ensures a balanced approach in operating from home and office. We are confident Ying-Yang model will lead to seamless project governance, improved productivity, and better employee engagement.

5) What’s your view on Blockchain and Crypto currencies? What is your company doing on Internet on Things, Blockchain, Machine Learning, data, Cloud computing and other such emerging tech. Please share whatever you could on these initiatives.

The relevance of Blockchain as a disruptive technology continues to evolve rapidly. Its applications now encompass a wider set of areas such as payments, identity management, insurance, healthcare and digitization of physical assets. LTI has a head start in this domain with our team of Blockchain experts and domain specialists enabling businesses to leverage the benefits of faster, more secure, and transparent peer-to-peer transactions. Altius, our cloud unit recently launched the Infinity platform, which differentiates us and provides capabilities to deliver end-to-end cloud adoption services. Recent acquisition of Cuelogic has strengthened our digital engineering offerings. Digital now contributes nearly half of our business.

6) How are you developing Digital Transformation strategy for your clients and your company too?

The pandemic has shown that the businesses with sound digital strategy are more resilient – both in terms of customer experience and employee experience. Time-to-market has become more critical than ever and that is a very interesting trend we are witnessing. Customers are seeking direct-to-consumer approach, workplace modernization, neweroperating models, higher resilience,cost saving andenhanced security &privacy.

Across industries, we are witnessing a massive pull-forward in the adoption of digital trends.We are responding with our strategy of Solving for the Great Restructuring, and we are doing it through four pillars:

·         Helping customers leverage cloud. We call it the Unlimited enterprise

·         Enabling customers to bedata driven. That is, the Cognitive enterprise

·         Rethinking enterprise applications like ERP, CRM, SCM for the new age. This is the Reimagined enterprise

·         Redefining the IT operating model transformation through Agile, DevOps, Digital Engineering.We call it the Engaged Enterprise

7) How do you manage to compete against larger peers?

In today’s world, speed and expertise are more important to enterprises, and those are the key attributes we bring to our customers.

LTI is born out of Larsen & Toubro and that is where we derive our strengths, our value system and all the expertise that we bring to the marketplace. This deep relationship gives us unparalleled scale and capabilities to compete globally. L&T group is so diverse and here we get to implementinnovative solutions, learn from incredible new digital technologies that are adopted in various units of the group.This engineering DNA, industry knowledge, and customer centricity, along with our agility make us the most formidable challenger. When I contrast LTI to our peers, I feel blessed to have inherited a fantastic platform because of focus, hard work and sacrifices that L&T leadership, especially Mr. Naik, Mr. S. N. Subrahmanyan and others have personally made over two decades. Their guidance, support and above all confidence to think big and be audacious is a great boost for us. We have invested on top of this solid foundation to make LTI one of the most client-centric and digitally focused companies.