Sunday, 21 November 2010

The 80/20 principle

A contemporary of Puccini, the Italian economist Vilfredo Pareto observed that the resources of his country did not follow an even distribution. He devised a series of formulae to model this phenomenon and the solution that fell out was that roughly 20% of the population owned 80% of the wealth. Later it appeared that this ratio had more general applicability and this 80/20 rule is also named Pareto's Principle. We shall probably find that 80% of the cuts in UK administration will occur in the first 20% of the coalition government's life.

There is one field to which, in my experience, the principle does not apply: computer projects. Here, the ratio is 90:10. For instance, a project becomes 90% complete in 10% of the time. The remaining 10% takes 90% of the time and effort to get working.

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