A Pareto chart is a histogram that can be used to prioritize problems or their causes. Without this data, we might focus on problems which we think are important but could in reality not be the most pressing items.
The Pareto chart helps with
- Prioritizing and selecting the greatest problem areas or largest areas of opportunities
- Analyzing the frequency of an event (in terms of occurrences or number of items) and identify the biggest contributors
- Communicating in summary, how 80% of the problem comes from 20% of the causes
Pareto charts are based on the Pareto Principle, which is named after the nineteenth-century Italian economist Vilfredo Pareto. The basis of the Pareto Principle is that roughly 80 percent of effects are produced by 20 percent of the causes. In terms of quality management, this theory can be translated to 80 percent of defects are produced by 20 percent of the features, code base, people, etc. Pareto charts as Juran stated, help to separate the
vital few from the
trivial many. Preparing a Pareto chart includes the following steps.
- Identify the categories (problem areas or causes) for which data is to be collected
- Gather the data needed for analysis over a period of time
- Sort the categories according to frequency of occurrence
- Mark the axes of the chart. List the categories in descending order on the horizontal axis and use an appropriate scale for the data on the vertical axis
- Draw the histogram
- Create the chart's percentage line representing the cumulative percent of occurrences. The line representing the cumulative percent will display across all categories
The chart displays graphically and in an easy to read manner the categories that are most important. Maximum return on investment may be obtained by focussing improvement efforts on these categories. Pareto charts are used widely in software development. One of the uses of this chart is to analyze defect metrics and determine which category of issues to address first. To do this, create Pareto charts based on bug types. This enables the team to determine the category in which most of the bugs are occurring, and focus their efforts there and avoid addressing issues randomly with little knowledge of overall project impact.
