The 80-20 rule in Project Management refers to the application of the Pareto Principle in a Project Management context. The Pareto Principle, coined by Vilfredo Pareto (a Genoese Economist) in 1906, states that 80% of the consequences originate from 20% of the causes (hence the 80-20 rule naming). Vilfredo first remarked this phenomenon in his garden (where 20% of the plants were holding 80% of the vegetables), and later realized that this principle can be applied in all aspects of life.
Following are some general examples of the Pareto Principle:
- 80% of the world’s wealth is controlled by 20% of the people.
- In a business-to-consumer software company, 20% of the customers cause 80% of support.
Here is how the Pareto Principle is commonly manifested in Project Management:
- 80% of the time spent on a project is caused by 20% of the features.
- 80% of the work is done by 20% of the project team.
- 80% of the budget is spent on 20% of the functionality.
- 80% of the conflicts are caused by 20% of the team members.
It is imperative for the Project Manager to account for the 80-20 rule in both the project plan (scheduling, team allocation, budgeting) and the risk management plan. Failure to properly recognize the 80-20 rule may very well result in a project that is over-budget and behind schedule. On the other hand, properly accounting for the 80-20 rule is among the traits of an experienced Project Manager and usually results in both a maintainable schedule and an accurate budget for the project.
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