Business-management consultant Joseph Juran introduced the Pareto principle and named it after Vilfredo Pareto, an economist who observed that 80% of Italian land was owned by only 20% of its people. Though the rule was developed within the context of population wealth, the more you think about it, the more you will see its potential in almost everything around you. The 80-20 rule can quickly become an eye-opener especially when one understands how it can be applied.
The 80-20 rule states that 80% of the results we see can be attributed to 20% of the causes.
Think of requirements.
Typically, when you are brought in to solve a problem, your domain knowledge can easily be applied to help you elicit and understand the majority of the requirements within a short period (20% of your time), meaning that the remaining 80% of your time could be spent on understanding the peculiarities of the situation - exceptional/new scenarios and complex business rules.
In reality, the numbers may not always add up to the exact percentages of 80-20 but the central idea is that most key requirements can be elicited within a shorter period of time than the remainder. It’s important to focus on key requirements and avoid analysis paralysis (spending an excessive amount of time without making any visible progress) when analysing the remaining requirements, which could turn out to be of a lesser priority.
Once you have the big-picture requirements, you can then settle into the details and analyze the complexity but don’t spend too much time in this zone. Ask yourself, what are the key requirements I should be focusing on? Having Pareto's principle in mind would prevent you from spending an excessive amount of time trying to get all your requirements to a 100% accuracy within the limited time you have - your project would suffer if you did.
The 80-20 rule, if properly applied, will allow you to allocate your time effectively and assist stakeholders in prioritizing requirements to ensure the business gets maximum returns on its investments. The challenge often lies in finding the 20% that matter and focusing on them to deliver the most business value.
There are multiple ways to look at the 80-20 rule:
- 20% of requirements will deliver the most (80%) business value.
- 20% of business problems affect your organization the most.
Focusing on key issues and tasks instead of attempting to tackle everything at once can help you achieve huge benefits in the short term.
The same thinking can apply to your business analysis tasks – Perhaps only 20% of what you do delivers direct value to your stakeholders. Don’t spend an excessive amount of time on the 80% that do not add much value, if at all. Tackle key issues, deliver on those and then re-assess the situation to determine what should be next in line - I call it iterative prioritization.
What do you think of the 80-20 Rule?