What Is the 80-20 Rule in Project Management?

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:

  1. 80% of the time spent on a project is caused by 20% of the features.
  2. 80% of the work is done by 20% of the project team.
  3. 80% of the budget is spent on 20% of the functionality.
  4. 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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Comments

  1. Quote

    This is an important rule to remember, especially for project managers. We work off of this principle when planning, executing and tracking results. We also like to make it easy for small businesses to be organized, and our solution lets that happen, so they understand the 80-20 rule!

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