Examples of Pareto analysis.. and its benefits
What is Pareto analysis?
Pareto analysis or the 80/20 rule is a principle that states that 80% of results are due to 20% of causes. In 1895, Italian economist Vilfredo Pareto discovered that 20% of the population in Italy owned about 80% of the wealth of a suit.
Since Pareto's discoveries, experts have begun to apply the 80/20 rule to the rules of cause and effect in many matters outside the scope of the distribution of wealth, including the principles of work and professional development. For example, at work, it is believed that 80% of sales results belong to 20% of customers. .
While the 80/20 ratio is the most common, there are other ratios known in Pareto analysis such as 30/70, 25/75 or 15/85. These values all show low percentages of cause and a high percentage of consequence.
Basic information about Pareto analysis can be summarized as:
- The 80/20 rule asserts that 80% of the results are caused by 20% of the inputs (causes).
- In the 80-20 rule, the 20% of factors that lead to the best results are prioritized
- The 20-80 principle boils down to identifying the entity's main assets and using them effectively to achieve the best values.
- This rule is a principle, not a hard-and-fast mathematical law.
Pareto analysis or the 80/20 rule is a principle that states that 80% of results are due to 20% of causes. In 1895, Italian economist Vilfredo Pareto discovered that 20% of the population in Italy owned about 80% of the wealth of a suit.
Since Pareto's discoveries, experts have begun to apply the 80/20 rule to the rules of cause and effect in many matters outside the scope of the distribution of wealth, including the principles of work and professional development. For example, at work, it is believed that 80% of sales results belong to 20% of customers. .
While the 80/20 ratio is the most common, there are other ratios known in Pareto analysis such as 30/70, 25/75 or 15/85. These values all show low percentages of cause and a high percentage of consequence.
Basic information about Pareto analysis can be summarized as:
- The 80/20 rule asserts that 80% of the results are caused by 20% of the inputs (causes).
- In the 80-20 rule, the 20% of factors that lead to the best results are prioritized
- The 20-80 principle boils down to identifying the entity's main assets and using them effectively to achieve the best values.
- This rule is a principle, not a hard-and-fast mathematical law.
What does Pareto analysis or the 80/20 rule mean?
The 80/20 rule is a mathematical principle for a set of parameters, Pareto discovered the 80/20 pattern but in reality, this principle can be represented by different ratios such as 90/20, 60/40, and so on.
The important thing in Pareto analysis is the ability to analyze your goals and the tasks that you want to do in a different way. At first, you must focus on the tasks that will lead to the emergence of results first. This helps the person to focus and more importantly, do more than one result at a time. This matter can It makes a big difference and impressive results, because as we know, people are not good at multitasking.
You can think of this rule as a way to help you determine the things that are most important to you, and that will lead to the appearance of 80% of the results. The other 20% of the results you can create for them a different way to achieve them or move them or even ignore them. You should focus more on what is most useful For you, the things you enjoy and the things that can bring you the most happiness.
Planning is key, and the 80/20 rule helps you focus on your limited resources and high expectations. You must learn to use this principle and help your team focus on what matters to get the best results. You should spend time with the team to identify what matters most and spend less time chasing Unimportant new opportunities that will not yield valuable results.
The 80/20 rule is a mathematical principle for a set of parameters, Pareto discovered the 80/20 pattern but in reality, this principle can be represented by different ratios such as 90/20, 60/40, and so on.
The important thing in Pareto analysis is the ability to analyze your goals and the tasks that you want to do in a different way. At first, you must focus on the tasks that will lead to the emergence of results first. This helps the person to focus and more importantly, do more than one result at a time. This matter can It makes a big difference and impressive results, because as we know, people are not good at multitasking.
You can think of this rule as a way to help you determine the things that are most important to you, and that will lead to the appearance of 80% of the results. The other 20% of the results you can create for them a different way to achieve them or move them or even ignore them. You should focus more on what is most useful For you, the things you enjoy and the things that can bring you the most happiness.
Planning is key, and the 80/20 rule helps you focus on your limited resources and high expectations. You must learn to use this principle and help your team focus on what matters to get the best results. You should spend time with the team to identify what matters most and spend less time chasing Unimportant new opportunities that will not yield valuable results.
Benefits of using Pareto analysis
The 80/20 rule helps you to know how you spend your time, money or energy, and through this rule you can also set goals that you want to reach and the specific tasks that you want to do and stay focused on the most important things, and the following benefits explain What is meant:
- Improving time management : By recognizing the tasks that lead to results, the day can be organized by focusing on these tasks that have the most impact at work.
- More effective leadership: If you want to improve your leadership skills, you can use the 80/20 rule to communicate with your team, explore existing opportunities, build confidence and unify team spirit.
- Better use of company resources : The 80/20 rule helps to make the best use of the company's time and efforts in researching competitors or industry trends, simplifying recruitment procedures and improving company culture.
The 80/20 rule helps you to know how you spend your time, money or energy, and through this rule you can also set goals that you want to reach and the specific tasks that you want to do and stay focused on the most important things, and the following benefits explain What is meant:
- Improving time management : By recognizing the tasks that lead to results, the day can be organized by focusing on these tasks that have the most impact at work.
- More effective leadership: If you want to improve your leadership skills, you can use the 80/20 rule to communicate with your team, explore existing opportunities, build confidence and unify team spirit.
- Better use of company resources : The 80/20 rule helps to make the best use of the company's time and efforts in researching competitors or industry trends, simplifying recruitment procedures and improving company culture.
Examples of Pareto analysis
- 20% of criminals commit 80% of crimes
- 20% of drivers cause about 80% of traffic accidents
- 80% of pollution is caused by 20% of all causes
- 20% of companies' products account for about 80% of all sales
- 20% of the employees are responsible for 80% of the results
- 20% of students have a grade of 80% or higher.
The Pareto principle can be used in business, operations management, quality control, medicine and many other fields.
Under this rule, 20% of customers are responsible for 80% of your revenue, so it is important to use scientific principles in order to know who the 20% are and invest more in this matter.
- 20% of criminals commit 80% of crimes
- 20% of drivers cause about 80% of traffic accidents
- 80% of pollution is caused by 20% of all causes
- 20% of companies' products account for about 80% of all sales
- 20% of the employees are responsible for 80% of the results
- 20% of students have a grade of 80% or higher.
The Pareto principle can be used in business, operations management, quality control, medicine and many other fields.
Under this rule, 20% of customers are responsible for 80% of your revenue, so it is important to use scientific principles in order to know who the 20% are and invest more in this matter.
How to make use of Pareto analysis at work
There is a phrase reminiscent of the Pareto Law declared by the 34th US President, Dwight Eisenhower, and it is: “What is important is seldom urgent, and what is urgent is seldom important.”
This phrase is similar to Pareto analysis, and it helps to know the most important tasks and things that a person should do in the beginning, which is the principle that the famous Eisenhower matrix was born, so in the event that there is something important and necessary (rare) that must be done in the beginning, in case it Only urgent or only necessary, it can be postponed to another time, and if neither is the case, it can be neglected.
This applies to the Pareto principle, which helps people focus on what is important and necessary.
There is a phrase reminiscent of the Pareto Law declared by the 34th US President, Dwight Eisenhower, and it is: “What is important is seldom urgent, and what is urgent is seldom important.”
This phrase is similar to Pareto analysis, and it helps to know the most important tasks and things that a person should do in the beginning, which is the principle that the famous Eisenhower matrix was born, so in the event that there is something important and necessary (rare) that must be done in the beginning, in case it Only urgent or only necessary, it can be postponed to another time, and if neither is the case, it can be neglected.
This applies to the Pareto principle, which helps people focus on what is important and necessary.
How to apply Pareto examples in the field of work
- 20% of marketing efforts account for 80% of results
Examples of Pareto rules are very important for anyone who wants to achieve the best results with the least amount of marketing efforts, but the difficulty in the marketing and communication process is the difficulty in measuring these works. You can imagine that you launched a television campaign and it was successful and achieved good sales, but at the same time, there was A sharp improvement in the economy, as well as one of your competitive friends was suffering from work problems and was unable to deliver his products to the market.
So, in this case, can your campaign be considered effective? This dilemma will not be able to solve the rule of 20/80, there must be other studies able to identify this problem, so many marketers chose Internet marketing, which can measure the results with more effectiveness and certainty, which helps the person in the decision-making process.
- 20% of software development efforts account for 80% of software functionality
Software and development hours are prohibitively expensive, and learning the Pareto 20-80 rule helps determine the limiting factor for new software development, allowing the creation of a guide of good practice and a database of successful projects for consulting.
- 80% of quality failures arise from 20% of the tasks
People who work in operations management can use Pareto analysis in order to identify the critical tasks that cause 80% of the problems. They can try to model the processes to make the tasks more efficient, and then improve them through the process of continuous improvement and development.
- 20% of marketing efforts account for 80% of results
Examples of Pareto rules are very important for anyone who wants to achieve the best results with the least amount of marketing efforts, but the difficulty in the marketing and communication process is the difficulty in measuring these works. You can imagine that you launched a television campaign and it was successful and achieved good sales, but at the same time, there was A sharp improvement in the economy, as well as one of your competitive friends was suffering from work problems and was unable to deliver his products to the market.
So, in this case, can your campaign be considered effective? This dilemma will not be able to solve the rule of 20/80, there must be other studies able to identify this problem, so many marketers chose Internet marketing, which can measure the results with more effectiveness and certainty, which helps the person in the decision-making process.
- 20% of software development efforts account for 80% of software functionality
Software and development hours are prohibitively expensive, and learning the Pareto 20-80 rule helps determine the limiting factor for new software development, allowing the creation of a guide of good practice and a database of successful projects for consulting.
- 80% of quality failures arise from 20% of the tasks
People who work in operations management can use Pareto analysis in order to identify the critical tasks that cause 80% of the problems. They can try to model the processes to make the tasks more efficient, and then improve them through the process of continuous improvement and development.