In this lecture we are going to see basic concepts and definitions about Process Management, and why it is important for organizations to adopt a process orientation. In organizations, in fact, beyond the needs of understanding who does what, we have also the need to understand which are the interdependences and the logical flows between different activities that are necessary to produce final products or services. Process Management helps us in understanding it. Processes always existed in organizations. They have become very important and they have been formalized in early Nineties, and today the process dimension is extremely relevant for many companies. In fact, the adoption of a process orientation derives from the need to limit the fragmentation of activities, that is the consequence of the creation of specific organizational structures. The adoption of a process view, that overcomes the hierarchical vertical orientation of the company, helps organizations in highlighting the link between interfunctional and interorganizational activities and the final performances, such as customer satisfaction, and in the end to financial and economic results. The assumption of a process orientation is that organizations do not create value through organizational units, but through processes, with organizational units providing the resources needed to perform the different activities for the final output. But, what is a process? A business process is defined as an organized set of activities and decisions that are aimed at creating an output, which is required by a customer and to which this customer attribute a well-defined value. This value could be related to price, quality, time or flexibility. The definition helps us in reflecting on the key elements of a process. First, the fundamental starting point is to identify the final customer, that is a subject that benefits from the output of the process. When we adopt a process orientation, this customer can be an external customer, for example the final consumer of a customized product, or an internal customer, for example the production unit can be considered as the customer of the design and planning unit. Identifying the final customer allows us to identify which is then the final output of the process, and the characteristics it needs to satisfy the customer. To monitor the characteristics and the value of the output, we should monitor specific performances. Performances represents the quantification of the contribution of the output to the creation of value for the in customer, and they can be monitored and represented by the so called Key Performance Indicators – or KPIs. We will talk in details about performance indicators in dedicated lectures. We also have inputs of the process, that are physical or informational factors that are needed to start the process. In other words, all the information, competencies, physical goods, and so on and so forth, that are needed to carry out the process and achieve the final product or service. If the output defines the characteristics of the process downstream, the input defines the characteristics of the process upstream, at its very start. To transform inputs into outputs we need to identify specific activities and group them in different phases, taking into consideration interdependences, namely the logical links and precedent links between the different activities We also need management methods, that are the basic logics used to coordinate activities, make decisions and monitor and adjust the progress of the process. An example of this could be a manual describing in details the quality procedures to be adopted when for example we need to manage return of goods or complaints from the customer. Finally, we have resources, which can be human or technological, and that are needed to perform the different jobs and activities within the process, or that take decisions during the process. A particular kind of resource is represented by the Information and Communication Technologies that can support the spreading of information through the different phases of the process, facilitating automation of some of the phases or activities. To conclude, we can ask ourselves: Which are the benefits of adopting a process orientation? First, cost savings, with higher efficiency in the execution of activities. It’s easier to eliminate redundant and duplicate activities, eliminating those activities that does not add value. Second, reduction of lead time and response time towards the final customers, because it's easy to spot those activities that requires sometime to be performed but do not add value. Third, improvement of customer satisfaction, increasing the ability to understand better the customer needs. Finally, increase of flexibility in the use of resources of added value in the organization.