The Pareto Principle

The Pareto Principle

Pareto Principle

The Pareto principle is developed by Vilifredo Pareto after studying wealth distribution in Italy. He learnt that 80% of wealth was held by 20% of the population .Several years later, Joseph Juran applied this principle at quality control. Pareto principle not only applies to quality control but also in several fields .Hence it is also called as Pareto’s Law. The Pareto Law is also called as Law of Vital few and trivial many, 80-20 principle or just Principle of Scarcity.

80-20 rule helps in a larger way to increase the business .80% of the sales come from   20% of clients only.80% of effects   come from 20 % causes.80% of profits come from 20% of the customers.80% of results come from 20% of employees.80% of repair costs come from 20% repairs.80% of project results come from 20% of resources.80% country’s wealth   comes from 20% of population.

How to use Pareto principle:

  1. An Individual or organization must focus on 20 % which/who are giving 80% results.
  2. Reward the 20% who are focusing on the job.
  3. Research the 20% on what repairs are to be made.

The Pareto principle is used in quality management of   software development projects also. The Pareto like effect is also seen by Timea Illes -Seafurt and Barbara Paech regarding open source software projects is

Hypothesis 1: Pareto   distribution of defects   in files

Hypothesis 2: Pareto distribution of defects   in files across different releases.

A small number of files result in major defects of the software .This is also seen in different releases. Hence there must be a considerable effort to make a quality end product.

Microsoft noted that by fixing the top 20% of the most-reported bugs, 80% of the related errors and crashes in a given system would be eliminated. In load testing, it is common practice to estimate that 80% of the traffic occurs during 20% of the time. In software engineering, Lowell Arthur expressed a corollary principle: “20 percent of the code has 80 percent of the errors. Find them, fix them! Thus Pareto principle plays a vital role software industry also.

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