As others said, it's difficult to get Italy to do much better with a post-1900 PoD: most of the reasons for Italian failures go back to the botched unification, and that means they can't be easily eradicated forty years later at best. Oh, Italy can do better - neutral in both World Wars, a focus on development, and maybe a small nudge in the direction of Lybian oil - but it isn't sweeping, and it also means Italy would be slightly smaller than OTL.
To have Italy run to its full potential (which is considerable, really), you need to go back to the 1860's and get the government to enact those agrarian reforms they had promised the South during the unification; anything less ends up with the historically broken up Italy, rich North dragged down by a quasi-feudal, crime-infested South (which eventually spread up north, as well). Kill mafia in the cradle, eradicate the latifondium culture, and the South will start walking at the same speed. Then you can think about uniting Italy culturally. It's a long, long road which is still going today, and there's no way it can be completed before the World Wars (or equivalents) hit, with a post-1900 PoD.