Pareto Analysis
80/20 rule for prioritization.
PURPOSE
Teams and organizations often try to solve all problems at once, spreading themselves too thin. The Pareto Analysis helps identify the few causes that produce the greatest impact. This way, limited resources can be deployed where they have the greatest leverage.
HOW TO USE
First, all problems or causes are identified and quantified by their frequency or impact. They are then sorted in descending order and visualized as a Pareto diagram. The top 20 percent, which account for roughly 80 percent of the impact, are prioritized for action.
WHAT IT IS
The Pareto Analysis is based on the Pareto Principle (80/20 rule), which states that 20 percent of causes are often responsible for 80 percent of effects. It consists of a quantitative assessment, ranking by magnitude, and a visual representation as a bar chart with a cumulative curve. The framework originates from quality management and is universally applicable to prioritization questions.
EXAMPLE
Example: Your support team handles 500 tickets per month and feels overwhelmed but cannot pinpoint where the greatest leverage lies. The Pareto Analysis reveals that 80% of tickets stem from just three error sources: password resets, printer problems, and VPN errors. You invest in a self-service portal for exactly these three topics and reduce the ticket load by 80%.