Siju Johny, chief procurement officer at TransGrid, explains how procurement is the pioneer of strategic and international investment in Australia – and stresses the importance of developing the right mindset for yourself and for your teams
How has the last year been for you at TransGrid?
When the pandemic started I was tasked with looking into the overall supply chain of TransGrid, and very soon I realised that a big chunk of it was coming out of China. What’s my second-best option? Europe, in terms of high-level equipment and engineering. Then what happened in Europe? Everything shut down. But very soon we worked out some practical solutions to make sure parts come out of different parts of the world but that assembly happens in Australia. I also started working with a lot of local providers. It took around six to eight weeks but we had an alternative supply chain model built up. Also, because we have a strategic group of suppliers we always work with, we were able to share their pipeline to understand their key focus and if it was possible for us to shift our priorities based on that pipeline for a mutual benefit. Also, we were spending money rapidly because most transmission projects take three to four years to deliver, so every day you miss would cause a massive delay later. Overall, I would say the pandemic was more exciting a timeframe for us than anything else.
Did that extra authority impact the team?
The impact has gone up to an extent where organisations pull up and ask us questions as organisational representatives, which was unheard of three or four years ago. They started asking opinions and again, for me, that is a demonstration of the respect and value they find in procurement. I believe recognition matters. It’s one of the best ways to attract the right talent and the right energies.
What do you mean by the right energies?
If you have the right mindset and the right energy, it’s about transforming; transforming yourself and transforming the team. Knowing when to be strategic, when to escalate matters, and how to influence people – influencing skill is absolutely important. If you are looking for an investor because you have a great idea, you ask how am I going to present it to the investor and make sure they choose to invest in me? Don’t tell people what you want to tell them, tell them what they need to hear – it’s a massive difference. Basically, if you know their priorities, it’s much easier for you to communicate to them and then you’re getting their attention.
Can you tell me how you've managed to get people’s attention?
In the early days, I had an interesting key stakeholder who never wanted to talk to me and never wanted to listen to me. I ended up staying outside his office two or three times until he realised, this guy is not going away. Then he gave me some time but I didn’t talk about procurement at all. I was trying to understand what’s his favourite sport, what does he like? We had two meetings and never talked about business until he finally asked me, ‘What do you really want?’ So then I asked, ‘What do you want out of me?’ He gave me one of his key pain points with procurement and, right or wrong, I went back to the team and made some changes which addressed his concern. That gave me my first opportunity to have an honest conversation with him, and now, I would say he’s one of my good mates. It’s about that commitment, you know? If you want to get someone’s attention and if you’re determined, you can definitely get it. It’s a matter of time, but if you have patience and are not egoistic, it really can take you a long way in procurement.
You have a quite a varied career experience across industries and sectors. Was that a deliberate decision?
I have an accountancy background and, like many others, I fell into procurement. When I was working in a company as an accountant, the CFO said, ‘Hey, we’ve been bought by a European company, and they have allocated €100m savings target over the next three years and they are asking do we have a procurement department?’ I said, ‘Yeah, I’ll take that job’. That was my step into procurement. Then by moving into different industries every time I made a move, I expanded my understanding and knowledge. But I would say jumping into the public sector really made me feel the difference. Up until that time, it was all about how can you get noticed at a board level? How can you get into the top of the organisation? But the public sector experience made me realise the influence you can have by making the right change in contractual or commercial arrangements, especially when you play with taxpayers’ money. Then I started looking into what’s beyond the standard P&L more than a standing target. How can you really influence the community? How can you ensure the local sourcing and local capability is actually getting promoted through the sourcing that you do? And how do you create a circular economy with the money people spend rather than going into some overseas ownerships?
What lies ahead for the energy sector?
The transmission industry is going through a huge change mainly because, like in the transport industry, we didn’t invest well enough a while back. All our infrastructure is at its maximum capacity. If you look at Australia, the price of energy doesn’t make any sense. You have resources in all forms, but electricity is one of the most expensive items in Australia, and a main contributor is that we don’t have enough infrastructure to distribute the electricity. People still struggle to believe 60% of our current generation is from coal, but that era is coming to an end. And that’s where the whole TransGrid environment becomes more relevant; we are investing in interconnectors, that’s thousands of kilometres of transmission line projects. We need at least four to five times more than what we have today to meet the demand of what we have in the pipeline. We need to demonstrate there’s value in working with us or giving us a project, and that makes procurement more interesting. The benefit of TransGrid is, in New South Wales (NSW) and the Australian Capital Territory, we look after the whole of the grid business and it’s a monopoly business with a 99-year-old lease. But that doesn’t mean our business is actually guaranteed forever.
What other new projects are you working on?
Transmission is one of the industries in the world that technology hasn’t really impacted. But we are looking at things like helicopter stringing, for example. Also rather than having people climbing towers, we’re seeing if drones can help us examine the conditions of towers. Where possible, we’re working with companies – for them it’s an opening to trial the technology, for us, if it turns out we can invest and maybe buy those companies, it’s a good outcome. But the role of procurement is changing within TransGrid. There’s much more you can do outside of standard sourcing and for me, the least priority item is tendering, so we’re trying to automate that as much as we can. We implemented Ariba last year, empowering people to do their own sourcing. And we now have three divisions: business as usual, core, then one-off infrastructure projects and innovation technology projects.
What is procurement’s role in delivering the company’s technology ambitions, such as the interconnectors, renewables and batteries?
So we’re doing a project called the NSW battery in partnership with Tesla, where we’re building a massive battery next to a substation here in Sydney. The intent is to see whether it’s possible because there’s a massive change in the overall scale. If you can have a battery substation where you don’t waste energy and instead store it, it can reduce the cost dramatically. How does procurement come in? A lot of new projects are coming out of the supplier relationship management framework. We have an innovation KPI with those strategic suppliers, the purpose of which is to understand what new technologies are emerging in the US and Europe markets, and if they have tested them out. Then when we have the SRM framework meetings with our suppliers, we ask them to share with us their R&D pipeline, where they are focusing a lot of their money, and we try to work out how we can give them an opportunity to try out things within Australia. How can we have new ideas coming into Australia without having massive investment issues? So the innovation in technology comes out of that angle, and procurement should be the pioneer that starts the innovation conversation.
And is the process the same for major projects?
Once-in-a-generation massive infrastructure projects range from A$2 billion to A$7 billion and every project has a standalone sourcing strategy. Right now, procurement’s focus is to attract a lot of international suppliers into this country, to invest in projects here. To invest money they need to have a defined pipeline so they can get an ROI on that. It’s a different kind of sourcing process and not many of the general local suppliers are interested in these billion-dollar projects. This can only be done by people who are established and have a lot of cash in their bank, so it has to be an overseas global organisation. Procurement’s role is to ensure we attract the right market and get them to come here. How can we then negotiate their ability with the NSW government and get them to invest back into Australia? How can we help them to subsidise the rates and taxes and other things on the back of them investing more money here? That’s where procurement is actually done. I don’t believe, when it comes to a one, two or three billion dollar infrastructure project, there is no point trying to make 1% or 2% more savings in those projects because those savings are spread around a period of 10 to 15 years. It’s more around managing risks and savings.
Does your progress in technology deepen your dependence on China?
Yes and no. Since the pandemic, the whole concept of a different supply chain has gained a lot of traction. For a lot of projects now, like our grid battery project, there’s a requirement to have a factory within Australia – that’s a condition – and where possible parts are sourced out of Europe and not China. But Australia cannot yet dream of a day where it can switch off from China. Australia is a massive consumer market and China is a massive supplier, but I can see a way out of it gradually. Give it another six to eight years and there will be a huge shift in the supply chain, of more parts getting produced in Australia and a massive shift from China to Europe, or maybe to India.
You previously led a CIPS award-winning team at Transport for NSW. Can you tell me about that?
When I joined Transport for NSW I had to change a big part of my team because the energy was missing. I ended up creating a brand new team with a completely different mindset; that journey was around four years. It moved from a team where everyone was on the verge of retiring or on the verge of ‘I don’t care’ to today, where we’re more of an advisory group within the organisation. I get excited with more positive energy because I’m a believer that procurement is a true enabler. It’s a testament to the fact that if you really start showing outcome, even your haters will start loving you. The biggest enemy you can have if you’re working in procurement is ego, because if you have a big ego you expect everything to happen your way. But if you actually have a mindset where you’re focused heavily on the outcomes, rather than how people communicate to you, focus on the outcome, and let that be the thing that drives you.
Finally, what makes for a successful career?
When Windows 98 was first invented it was one of the best operating machines out there – now it has no relevance. We should treat ourselves like software because if you don’t update on a regular basis you become irrelevant in the wider community. So be knowledgeable about what’s happening, use your network, create a brand of yourself, ensure that people believe in you. If you see procurement as an opportunity, you can make an impact on a personal and professional level.