When Italian economist Vilfredo Pareto first put forth the observation in 1906 that 20 percent of the people in his country owned 80 percent of the wealth and property, he probably never dreamed that many years later the scope of this theory of uneven distribution would be extended into other areas of human endeavor, including business and management, in what has come to be known as the Pareto Principle or the 80-20 Rule.
Management guru Joseph Juran, based some of his pioneering concepts of quality management on Pareto’s original postulation, speaking of “the vital few and the trivial many.” I’ve heard the 80-20 Rule being cited on many occasions, mostly to highlight how we often miss the forest for the trees, and focus on areas that are not necessarily key. Indeed, anyone who’s managed a project of any considerable size quickly comes to the conclusion that 20 percent of the work invariably takes up 80 percent of the time, effort and resource, so it becomes pretty obvious where one needs to focus one’s attention. But the 80-20 Rule is sometimes misunderstood and taken to absurd levels. Even Juran himself later modified his original credo into “the vital few and the useful many,” ostensibly to indicate that it could be perilous to ignore that other 80 percent of the big picture, however trivial it might seem.
Such an approach seems to assume even more significance in times of economic grief, and this applies very much to the management and governance of IT in enterprises, wherein most CIOs are seeing IT budgets shrinking, but are still expected to achieve more with less. At a recent Smart Enterprise Exchange event that I moderated, Professor S Sadagopan, director at IIIT in Bangalore, advised CIOs to get back to basics and find a million different ways that each save a dollar, rather than seeking only that elusive single, big-ticket, million-dollar saving.
While this might seem an oversimplification at first glance, what the professor doubtless intended to convey was that in bad times, one cannot ignore even the smallest of savings to improve overall health and sustainability. This can sometimes be achieved using a common-sense approach, but there are also more structured and robust frameworks and methodologies that IT managers have at their disposal today.
For instance there’s the current Version 3 of the Information Technology Infrastructure Library (ITIL) framework, which focuses on helping CIOs align IT strategy more in sync with business needs, while simultaneously improving efficiencies and cutting costs. Another approach that’s gaining credence is that of Lean IT. Once processes have been standardized and optimized, Lean IT provides a framework for further increasing efficiencies and eliminating waste in IT operations or software development or customer-focused business processes that have a large component of IT embedded in them. The idea is to adopt…
[This is an excerpt from Val Souza's
Between the Bytes column published in the August 2009 issue of
Network Computing magazine in India. To read the entire column, click
here]
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