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The Pareto Principle Is Alive and Well

February 18, 2010

You probably know what the Pareto principle is, although you may not know it by that name. It’s more commonly referred to as the ’80-20 rule’. It’s named after an Italian economist who at the beginning of the twentieth century observed that 80% of the land in Italy was owned by 20% of the population. He applied his observation at home and discovered that 20% of the pea pods in his garden contained 80% of the peas! It’s basically a rule of thumb that describes how something is shared by a particular set of participants. For example, you may see this rule in action as you wear 20% of your clothes 80% of the time, or spend 80% of your time with only 20% of your friends.

I saw the Pareto principle alive and well with our latest time clock software release.  Here’s what I mean. Roughly 80% of our new timeclock software feature requests are for similar new functionality. This means that out of all of the feature requests we’ve received over the last several years, approximately 8 out of 10 customers consistently ask for similar new features or functionality (20% of the pea pods). The engineers were definitely able to tap into this principle when planning and developing Virtual TimeClock ’10.

Let me give you an example. The ability to track and limit the time employees have been on paid breaks has been a top requested new feature for some time. And while it seemed like a simple request, this feature required a tremendous amount of engineering effort to make it a reality. The same is true for tracking unpaid worker time and leave. Implementing these two requests completely changed timecard reports, how leave is accounted for, and how activities are tracked. However, implementing these two items at the same time with the related reporting improvements fulfilled an enormous number of our user feature requests. We also knew the 80-20 rule was in effect for the requests themselves. For every person who took the time to request these features, we knew there were many more Virtual TimeClock users who wanted the functionality but simply hadn’t submitted a request.

Rather than going for cool new eye candy, a glamorous new buzz word feature, or something a little less strenuous to implement, engineering decided to pull out all the stops and make Virtual TimeClock ’10 do more of what our users wanted it to do. It wasn't the easiest, cheapest, or quickest route to a new release. At the same time it was certainly the right thing for us to do. Virtual TimeClock ’10 gives our customers the tools they need to more effectively manage their employee time and attendance and payroll costs.

What does this mean for the future? Well, it definitely means biometrics, web clients, and integration with new payroll products. These things are important to us because they’re important technologies for our customers. As always, we’re letting our users drive our innovation for each Virtual TimeClock software release. The Pareto principle may just be a natural phenomenon, but it’s a great way for us to focus our efforts on the things our customers really need.

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