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Pareto Principle 8020 Rule Project Management Concepts project
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*Pareto Principle - 80/20 Rule. • In this video, we are going to learn and understand the concept of Pareto principle (also known as 80:20 rule) • The Pareto principle is a phenomenon that states roughly 80% of outcomes arise due to 20% of causes. • It was first used in macroeconomics to describe the distribution of wealth in Italy in the early 20th century , with an observation that 80% of Italy’s wealth belonged to only 20% of the population. • This concept was introduced in 1906 by Italian economist Vilfredo Pareto, who is best known for the concepts of Pareto efficiency. • More generally, the Pareto Principle is an observation that most things in life are not distributed evenly. For example: • 20% of the input creates 80% of the output • 20% of the workers produce 80% of the work • 20% of the customers contribute to 80% of the revenue • 20% of the bugs cause 80% of the issues or defects • 20% of the features have 80% of the usage of a product • 20% of the stocks contribute to 80% of the profits in a portfolio • And on and on… • But be careful when using this idea! First, there’s a common misconception that the numbers 20 and 80 must add to 100 — they don’t! • Now we learnt about the concept of Pareto principle or the 80/20 rule. Let's see how we can use this concept in Project Management, looking at a few examples. • Problem- Solving. to find out the Root Cause of a problem. If we apply the principle of Parerto, 80% of your company’s problems are caused by 20% of issues. Focus on fixing the top 20% of issues to solve the problem. • Product Management and Strategy - When developing a new product, you need to build features that users actually want to use. Applying Pareto principle to focus on the prioritizing the top 20% features that will be used by 80% of the users. • Stakeholder Management - Pareto principle can be applied to Identify 20% of the key stakeholders who can impact on 80% of the project outcomes and necessary steps can be taken to engage the stakeholders. • Risk Management - Identify top 20% risks with high probability and impact and respond to the top risks on priority as part of the risk response strategy and actions to manage 80% of the risks • Time Management - Focus and prioritise critical activities which can impact 80% of the delivery schedule • Resource Management - Retain critical resources - top 20% or have a knowledge management plan to ensure 80% of the work is not impacted. • For more videos on Project Management Concepts in a simple and easy way, please subscribe to this channel. • ********************************** • About Me: • I am a PMP certified practitioner with more than 20 years of experience in the IT industry. However, Project Management is not restricted to a discipline. It is generic and applicable to any area of specialisation. • You can use the below link to join my WhatsApp group for more updates and discussions in the area of Project Management. • https://chat.whatsapp.com/LgecuRiXavn... • • #projectmanagement #pmp #agile
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