Seven steps the important of Pareto Analysis

= >> Form a table listing the causes and their frequency as a percentage.
= >> Arrange the rows in the decreasing order of importance of the causes, i.e. the most important cause first.
= >> Add a cumulative percentage column to the table.
= >> Plot with causes on x-axis and cumulative percentage on y-axis.
= >> Join the above points to form a curve.
= >> Plot (on the same graph) a bar graph with causes on x-axis and percent frequency on y-axis.
= >> Draw a line at 80% on y-axis parallel to x-axis. Then drop the line at the point of intersection with the curve on x-axis. This point on the x-axis separates the important causes on the left and less important causes on the right.

This is a simple example of a Pareto diagram using sample data showing the relative frequency of causes for customer service problems. It enables you to see what 20% of complaints are causing 80% of the problems and where efforts should be focussed to achieve the greatest improvement.

The value of the Pareto Principle for a project manager is that it reminds you to focus on the 20% of things that matter. Of the things you do during your project, only 20% are really important. Those 20% produce 80% of your results. Identify and focus on those things first, but don’t totally ignore the remaining 80% of causes.

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