The secret of 80/20 in IT Due Diligence

Which is better a $10,000 or $40,000 return for the same investment?


In the past, there have been ideas that were ahead of their time. So far ahead, that they were quickly forgotten. Then “re-discovered” decades later. An example would be Chaos Theory (1969) and the Pareto Principle (1941). At their core, both these concepts have their roots in the work of Vilfredo Pareto who first pointed out the 80/20 correlations in 1896. In 1941, Joseph Juran described the rule saying that “…80% of problems are caused by only 20% of causes…”. This has led to business axioms like:

    • 80% of Sales are made by only 20% of the sales team.
    • 80% of company purchases are made by only 20% of customers.
Topics: Due Diligence IT Due Diligence Technical Advantage 80/20 Strategies Pareto principle Investment Banking Mid-Market