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Pareto Method – the 80/20 Principle in Project Management (PMI)

31 July 2025

Pareto Method is one of the key analytical tools used in project management according to PMI. It is based on the principle of 80/20, which states that 80% of problems stem from 20% of causes. This allows focusing efforts on areas that bring the most significant impact.

📘 Pareto Chart in PMI Context


Pareto Chart is mainly used within:

  • ✅ Quality Management (quality control),

  • ✅ Risk Analysis (risk identification and assessment),

  • ✅ Cause and Effect Analysis (e.g., Ishikawa method).

 

🔍 Pareto Principle – 80/20
 

  • 80% of effects come from 20% of causes

  • Helps project teams focus on the most critical issues

  • Applied in both quality analysis and process optimization

 

📝 How to Create a Pareto Chart?
 

  • 📥 Data Collection: Identify problems (e.g., delays, errors, overloads).

  • 📊 Frequency Measurement: Determine the occurrence of each problem.

  • 📋 Sorting: Arrange problems in descending order of frequency.

  • 📐 Calculating Percentages: Calculate the percentage share for each problem:

    Percentage (%) = (Number of occurrences ÷ Total number of problems) × 100

  • 📈 Drawing the Chart: Bars for frequencies + cumulative line for percentages.

 

📊 Example Data
 

Problem Number of Occurrences
Delivery Delays 50
Documentation Errors         30
Resource Overload 15
Quality Issues 10
Others 5
 

Total: 110 problems

🧮 Calculating Percentage Shares
 

  • Delivery Delays:(50 ÷ 110) × 100 = 45.45%

  • Documentation Errors:(30 ÷ 110) × 100 = 27.27%

  • Resource Overload:(15 ÷ 110) × 100 = 13.64%

  • Quality Issues:(10 ÷ 110) × 100 = 9.09%

  • Others:(5 ÷ 110) × 100 = 4.55%

 

🔗 Cumulative Percentage:
 

  • Delivery Delays: 45.45%

  • Documentation Errors: 45.45% + 27.27% = 72.72%

  • Resource Overload: 72.72% + 13.64% = 86.36%

  • Quality Issues: 86.36% + 9.09% = 95.45%

  • Others: 95.45% + 4.55% = 100%

 

📊 Building a Pareto Chart
 

  • X-Axis: Problem Categories

  • Left Y-Axis: Number of Cases (bars)

Right Y-Axis: Cumulative Percentage (line)
 

 

🧠 Benefits of Pareto Chart in PMI
 

  • ✅ Identification of key problem causes

  • 🧭 Focus resources on what matters most

  • 📈 Increased efficiency and quality

  • 🧾 Better decision-making through data visualization

 

📌 Summary
 

Pareto Chart is a powerful visual tool that allows project managers to focus efforts on the most significant causes of problems. Following the 80/20 principle, by eliminating the key 20% of causes, we can reduce up to 80% of effects!

mateusz.florczak.96@gmail.com

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