Utilities must put their energy into growth
[QQ]A Cap Gemini survey of Europe’s largest electricity and gas utilities reveals that the industry must focus on growth if it is to improve revenues and create competitive advantage in the forthcoming single market for energy.[QQ] Senior managers, including CEOs of some of Europe’s leading utilities, were interviewed late last year. They said growth strategies will be driven by: alliances with players in different markets; diversification; international expansion; and mergers and acquisitions.[QQ] Eighty percent of respondents agreed that understanding the new market that they operate in, and the need to create competitive advantage, is the most pressing issue the industry has ever faced. This is followed by the challenge of creating value and realising corporate visions, which was cited by over half of those interviewed. Utilisation of IT is ranked as the third most important issue the energy market needs to address.[QQ] Lennart Gustafsson, head of business consulting for the utilities sector at Cap Gemini, said: “The EU drive to widen competition will enable larger, industrial customers to push prices down. The utilities which survive will be those focusing both on the needs of the market and growth strategies which break traditional, industry patterns.”[QQ] Managing the change which the liberalised market brings has created the need for three core competencies, say respondents. The most important is proficiency in trading and risk management. This is followed by leadership skills to drive new corporate vision and IT for sales and customer service.