Outsourcing in electricity distribution industry Online publication date: Sat, 31-Jan-2015
by Jyri P.P. Vilko
International Journal of Procurement Management (IJPM), Vol. 4, No. 2, 2011
Abstract: Electrical networks business is traditionally publicly owned, and outsourcing in the field is a fairly new phenomenon with a very limited number of papers addressing it. This paper assesses the drivers, benefits and risks of outsourcing from the interactions of a publicly owned network company and a privately owned service provider company. The study was conducted by analysing business reports and conducting interviews with parties involved in an outsourcing case in Denmark. Both the expected and realised benefits are great in outsourcing a publicly owned company to a private sector service provider as the feared risks did not materialise. The case provides evidence according to which outsourcing in an industry based on old monopolies can be used to solve internal problems, moving risks and raise the value of the company. It also illustrates how the electricity industry, based on old monopolies, offers many opportunities and challenges for privately owned service companies.
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