The COVID-19 pandemic has brought about tectonic shifts in customer preferences. This has spurred L&T Technology Services (LTTS), a pure-play engineering services firm, to accelerate on innovation, go-to-market and cybersecurity to align its portfolio of offerings to meet the changing needs of the new normal, CEO and MD Keshab Panda said in an interview. Excerpts:
How is customer sentiment changing in a pandemic-hit marketplace?
Customers globally are looking for higher levels of personalisation, faster go-to-market for their solutions, and increased connectivity driven by digital engineering. At the same time, they are demanding solutions that provide enhanced safety and remote productivity in the context of the pandemic. In response to this new market requirement, we introduced F.R.U.G.A.L. Manufacturing, a manufacturing concept based on social distancing, business continuity and business sustainability.
We also strengthened our cybersecurity offerings, and built AI solutions for industrial use that are pertinent to today’s business environment.
Are decision-making cycles getting shorter in the second half of the fiscal compared with the first half?
Decision-making cycles for large deals are admittedly taking longer than it used to a year ago. Broadly speaking, there are pockets where customers have begun to accelerate the decision-making cycles. There has also been a slight slowdown in new product development, although we have seen acceleration in enhancements to the existing portfolio of products and solutions. It really varies from sector to sector.
For example, in plant engineering we have already started to see a rebound of sorts as manufacturers globally embrace touchless solutions and remote manufacturing practices.
We are hopeful of relatively more positive traction in the second half of the current fiscal as customers accelerate the deployment of digital engineering projects to enable business continuity and drive scale.
What has been the election year impact on engineering and R&D budgets?
We are awaiting clarity on the decisions and believe a clearer picture will emerge after November. So far, there has been no impact on customer decision-making on account of it being an election year as that is an aspect that had been factored into the budgeting process at the start of the fiscal year.
Give us a sense of LTTS's localisation and hiring in the U.S.?
LTTS has been focussing on localisation and has been hiring engineers and management graduates from U.S. colleges.
We have seven design centres and almost 1,600 employees across all our locations in the U.S. and will continue to hire local engineers and graduate engineers from various colleges across the country.
Give us a short commentary on your pipeline for the second half and beyond.
LTTS closed eight multimillion dollar projects from global customers across all our verticals during Q2 and revenues from digital and leading-edge technologies jumped to 49% during the quarter, from 39% during the same period last year.
Our deal pipeline has been on a consistent upward trajectory from Q4, and is currently 30% higher than the pre-COVID levels.
We are confident of sequential growth during the second half of the fiscal.