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The operation system of electric utility companies may differ depending on the type and form of ownership, for example, a state or an investor-owned company. In addition, since typically, an electrical utility system consists of several electrical companies providing different services, and their integration can be vertical or horizontal, the ways of making a profit are also different (Willis & Philipson, 2018). However, in general, electric utility companies profit from contracting with governments for the supply of electrical power by selling energy or power supply services to corporations, as well as to other countries.
Electric utility companies have faced the problem of decentralization in the past due to the underdevelopment of the service market in this area and the centralization of the system. Decentralization of electrical systems began to occur relatively recently since in the past, the practice of companies that are responsible “for everything” was more developed (Frei et al., 2018). Consequently, digitalization for large companies was complex because of their scale. At the same time, as noted by Scognamiglio, companies tried to sell services, but the culture was too different; thus, digitalization was not profitable for services (Chesbrough, 2020). Hence, digitalization was challenging and not profitable for companies in the past, despite the fact that technologies were less developed.
Francesco Starace has seen the opportunities for the development of the sphere by assessing the needs and demands of the audience. In the era of digitalization of all areas, electric utility companies also needed this transition, although most of them feared the costs and failure due to multiple challenges. In addition, environmental trends and technological developments have caused the rise in popularity of electric vehicles, which are a promising development trend. For example, the market share for electric cars in Europe grew from 1.2% to 10% from 2015 to 2020 (“Trends and developments,” 2021). Consequently, Starace has seen a potential niche with low competition and chose a way for the corporation to improve the performance of its low-profit companies.
In the process of creating new projects, the company faced many challenges, which lagged its development. Among such problems were deficiencies at the hardware level, the need to change the service system to a more customer-centric one, as well as shift the cultural and knowledge emphasis and provide continuous education of staff (Chesbrough, 2020). In addition, the corporation had too many diversified projects that caused overwork and stress among employees. However, the timely identification of problems, prioritization, and reduction of projects allowed all Enel X companies to complete the changes on time and generate significant profits.
Francesco Venturini’s priorities should focus on company development and digitalization in areas that have significant potential. As determined by Venturini, such areas can be eMobility, financial services, and optical fiber while maintaining work with governments, businesses, and individual customers (Chesbrough, 2020). As Siebel (2019) points out, only companies that implement wholesome digital reinvention but not just transform their business processes can be successful. Therefore, the path of further digitalization should be Venturini’s choice.
Thus, the case study demonstrates that trend analysis, proper resource selection, and profound cultural and organizational change are the path to the successful digitalization of an enterprise. Most companies will soon have to go this way and take into account that superficial or partial digitalization is often insufficient. For this reason, all companies must make organizational and cultural changes within the company but not just introduce new equipment or technologies to succeed.
References
Chesbrough, H. (2020). Enel X: Driving digital transformation in the energy sector. Haas School of Business, University of California Berkeley.
Frei, F., Sinsel, S. R., Hanafy, A., & Hoppmann, J. (2018). Leaders or laggards? The evolution of electric utilities’ business portfolios during the energy transition. Energy Policy, 120, 655–665. Web.
Siebel, T.M. (2019). Digital transformation: Survive and thrive in an era of mass extinction. RosettaBooks.
Trends and developments in electric vehicle markets. (2021). Web.
Willis, H.L. & Philipson, L. (2018). Understanding electric utilities and de-regulation. CRC Press.
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