Application of The Pareto Analysis in Project Management

Download as pdf or txt
Download as pdf or txt
You are on page 1of 5

See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/305463099

APPLICATION OF THE PARETO ANALYSIS IN PROJECT MANAGEMENT

Conference Paper · June 2015

CITATIONS READS

4 13,539

4 authors, including:

Bojan Stojcetovic Šarkočević Živče


Academy of professional studies Kosovo and Metohija Faculty of Technical Sciences, Kosovska Mitrovica
59 PUBLICATIONS 100 CITATIONS 68 PUBLICATIONS 302 CITATIONS

SEE PROFILE SEE PROFILE

Dragan Lazarević
University of Pristina
30 PUBLICATIONS 40 CITATIONS

SEE PROFILE

All content following this page was uploaded by Bojan Stojcetovic on 09 January 2019.

The user has requested enhancement of the downloaded file.


9th International Quality Conference
June 2015
Center for Quality, Faculty of Engineering, University of Kragujevac

Bojan Stojčetović) APPLICATION OF THE PARETO ANALYSIS


Živče Šarkoćević1) IN PROJECT MANAGEMENT
Dragan Lazarević1)
Danijela Marjanović1) Abstract: In this paper will be presented application of the
Pareto principle in project management. Since the project
1) High technical school of consists of a large number of activities and has limited
proffesional education, Zvečan resources, the project manager must focus on the few most
[email protected] serious problems. Based on the research and lessons learned
it was allocated 10 problems that usually occur in the
company XYZ. Then is applied the Pareto principle.
Keywords: Pareto analysis, Project, Quality

1. INTRODUCTION problems or errors that occur during


realization of the projects;
A project is a temporary endeavor 2. Determining the frequency of repetition of
undertaken to create a unique product, service problems during the implementation of
or result. [1] projects;
In project management is used many 3. Determining the percentage share of each
quality tools. One of them is Pareto analysis. problem;
Pareto analysis is a statistical technique in 4. Determining the cumulative percentage of
decision making that is used for the selection of each problem;
a limited number of tasks that produce 5. Forming the Pareto diagram;
significant overall effect. [2] The results of a 6. Analysis of of diagrams and proposing
Pareto analysis are typically represented measures of improvement.
through a Pareto cart. [2]
Pareto chart is graphical tool that helps to
break a big problem down into its parts and 2. CASE STUDY
identify which parts are the most important [3]
The Pareto analysis is also referred to as the 80- Based on lessons learned and interviewing
20 rule. employees of the company XYZ dealing with
It states that for many events, roughly 80% project management, we came to the data
of the effects come from 20% of the causes. It presented in the table no. 1. Emphasize the 10
is named after an Iialian Economist Vilfredo problems that usually occur during project
Pareto who in 1906 noticed that 80% of the implementation.
land in Italy was owned by 20% of the Insufficient resources: Insufficient
population. [4] resources are probably one of the biggest
Examples of Pareto principle in projects problems of project managers. This problem
can be: can occur for various reasons. It may be the
 20% of tasks takes 80% of whole project result of poor planning, poor management of
time; resources, reducing the budget or changes in
 20% of project team work on 80% of user demands. In any case, the lack of resources
tasks; negatively affect the project results.
 20% of tasks takes 80% of project budget. Poor project management knowledge:
In this paper will be presented application Project manager and project team must have a
of the Pareto analysis in project management. clear understanding about their roles in project
The application is very simple and consists and must also have adequate knowledge. In
several steps: addition to knowledge of the area in which the
1. Collecting data on the most common project is concerned it would be ideal that all

9th IQC June, 2015 655


team members have at least a basic knowledge has additional costs due to delays.
of project management while the project Poor scheduling: scheduling is a process
manager should possess a license and have a consists of estimating the effort and time
minimum of 5 years experience in required, and then developing a calendar
management. schedule, taking into consideration such factors
Poor communication: ineffective as resource availability, technology acquisition,
communication has a negative impact on and business cycles. Poor scheduling lead to
successful project execution. Good Unclear Project Scope: Project scope
communication should exist between the management includes the processes required to
project team members and project managers. ensure that project includes all the work
Also, the project manager must constantly required, and only the work required, to
communicate with the project sponsor complete the project successfully. [1] Define
Poor budgeting: for the implementation scope is process of developing a detailed
of each project activities are needed certain description of the project and product. [1]
funds. Assessment of the necessary funds Managing the project scope is primarily
should be made before the start of the project, concerned with defining and controlling what is
ie. already in the planning stage. and is not included in the project. [1] If project
Underestimated the necessary funds are not scope is not clear it is obviously that problems
desirable because then the problem of its will occur during project implementation.
implementation occur. While overvalued funds The wrong project structure for the
are not desirable because the project will not be project: refers to the organizational structure
competitive. and size of the project team. The organizational
Lack of user involvement: It is not structure is very important because it
enough to finish the project on time and in determines the mutual connections and
budget but it is also or even primarily to deliver relationships in the team. If the organizational
a project that meets all the requirements of the structure of the company that carries out its
end user. In order to achieve that end users activities through projects wrongly defined is a
should be involved in all phases of the project. great probability that the projects would be
Otherwise, although with a project management ineffective or will not answer a number of
point of view perfect for the end user project problems. The number of members of the
may be worthless (if you do not meet the project team should be less than 10. Larger
requirements) teams hinder cooperation and communication
Unprofessional project manager: it is between team members which may contribute
often happens that the role of project manager to the failure.
gets a person who does not have a basic After we defined the problems next step is
knowledge of project management. to calculate the frequency or determining the
Management of resources, the formation of the frequency of repetition of every problem.
project team, assigning of tasks, Insufficient resources most often occurs as a
communication with the project sponsor are problem while wrong project structure is one
just some of the tasks of a project manager. of the rarest problem.
And when that tasks is conducted in an After filling in the table we can access the
inadequate way it will certainly be negative creation of Pareto diagram. On the X axis input
consequences for the project. items (problems) that arise during the
Insufficient time: Projects already in the implementation of projects, and on the Y axis,
definitions have limited duration, a beginning we input frequency of their occurrence. On the
and an end. The project orderer want to finish Y axis on the right side is cumulative value of
their projects as soon as possible. Also the items (problems) expressed as a percentage.
project teams aspire to finish the project
quickly in order to proceed with the next
project. So often the project team assigned less
time for the project than is reasonably
necessary. However, during the implementation
of the project there are many unplanned delays
for different reasons - internal or external. This
leads to delays in implementation. Project
orderer it does not approve and project team

656 B., Stojčetović, Ž., Šarkoćević, D., Lazarević, D., Marjanović


Table 1. The most common problems during project implementation
Project problems Frequency Percent Cumulative %
Insufficient resources 102 19.47 19.47
Poor project Management knowledge 90 17.18 36.6
Poor communication 83 15.84 52.5
Poor budgeting 80 15.27 67.7
Lack of user involvement 61 11.64 79.4
Unprofessional project manager 30 5.73 85.1
Insufficient time 22 4.20 89.3
Poor scheduling 22 4.20 93.5
Unclear Project Scope 18 3.44 96.9
The Wrong Project Structure for the Project 16 3.05 100.0
Total 524 100.00

Figure 1- Pareto diagram

When the data from the table transfer to confrontation can lead to a large number of
the diagram we can see that 5 items accounted problems that project managers have to solve in
for 80% of all problems. This is very important order to successfully implement a project.
information for project manager and the entire Therefore it is necessary that project
project team. Since the projects are constrained manager allocate the most critical activities or
by time, budget and resources directing issues that might endanger the planned
attention and resources on the “vital” problems implementation of the project.
can greatly contribute to the successful Pareto analysis is one of the tools that can
implementation of the project. be used to extract critical activities or issues
that arise in projects. So project managers can
pay attention to them.
3. CONCLUSION In this way, the project manager will be
disburdened on analysis of those items that do
Projects are specific endeavors which not have a big impact on the project until the
consist of a large number of activities, resources will be able to focus on the essential
stakeholders, team members and at the same items that have a major impact on the success
have limited time and resources. This of the project.

9th IQC June, 2015 657


REFERENCES:

[1] Project Management Institute, A guide to the project management body of knowledge, Fourth
edition, 2008.
[2] Talib, F., Rahman, Z., & Queresi, M.N. (2010). Pareto analysis of total quality management factors
critical to success for service industries. International journal for quality research, 2, 155-168.
[3] Joiner Associates, Inc, Pareto charts: plain & simple, 1995, 9.
[4] Ankunda, R. Kiremire (2011). The application of the Pareto principle in software engineering.
Retrieved from: http://www2.latech.edu/~box/ase/papers2011/Ankunda_termpaper.PDF

658 B., Stojčetović, Ž., Šarkoćević, D., Lazarević, D., Marjanović

View publication stats

You might also like