Agile story points — what they are and how to estimate them

Agile story points

Some common challenges that software development teams experience involve estimating the effort to complete a task and aligning with colleagues to minimize roadblocks. Story points can help teams build a work management structure that alleviates these challenges and avoids potential setbacks.

This post will explain story points in Agile project management methodologies — what they are and how to use them — so you can successfully improve your team’s work management process.

What are story points?

Story points are estimated units of measure used for project management and development to indicate the difficulty of individual pieces of work within a project. They are an abstract unit of measure, defined by the team, that can be used to evaluate, understand, and compare tasks based on the overall effort required to complete each one. Story points consider factors like the complexity of the work, the estimated time it will take to complete, the number of resources needed, and more.

Story points are used to help organize a project backlog. Each unit of work in a project is assigned an appropriate number of story points, which helps the team prioritize the backlog. The number of story points required of an item isn’t the only factor for determining priority, but it helps us understand which tasks may need to start sooner.

Why use story points?

Story points help provide a better understanding of a project’s full scope of work by evaluating each task individually. They provide a framework for considering the scope of each piece of a project, which creates a better understanding of the project as a whole.

In comparison to traditional estimation methods in project management — which primarily focus on the number of hours or days needed to complete a piece of work — story points offer a more detailed structure of a project’s framework, like the resources needed. This elaborate approach to project estimation results in a variety of benefits.

How to effectively estimate story points

A fine-tuned story point estimation process doesn’t happen overnight, but there are a few proven best practices that can help your team improve workflow and overall confidence in the project.

1. Determine what size task is equal to one story point.

Start by identifying a baseline in a single task that equals one story point. Remember that one story point does not equal one hour of work. Project managers are often inclined to measure a task by hours because it’s easy and seems more natural, but story points are supposed to do more than that. The time required of a task is one factor in the value of a story point, but it is not the only one.

To estimate a task equal to one story point, think about the most basic unit of work that your team does. For example, one story point might be equal to creating and sending one email, answering one support desk ticket, or fixing a small known bug. That simple, single unit of work that can’t be broken down further is the standard for your story point scale.

2. Use that task as a baseline for additional estimations

Starting at the bottom to determine what kind of task equals one story point is a good strategy to help determine the rest of the tasks. You can proceed to assign “sizes” to the larger, more complex tasks once you’ve determined the size of an initial story point.

For example, if a team is assessing the worth of a larger task like setting up an email drip campaign, they might not know where to begin or how many points it should be. If a single story point is the effort required to send one email, they might determine that creating a drip campaign requires as much effort as eight single emails. So the task of creating an email drip campaign is assigned eight story points.

A project team performing story point estimation

3. It takes a team

Everyone involved in the project should be included in the story point estimation process. Team members from different departments, skill levels, and management tiers will all have unique insights into the work required for each task.

However, getting a team to agree on story point value can be difficult. A popular exercise for increasing engagement is called “planning poker.” Teams select an item from the backlog and briefly discuss it before mentally producing an estimate to share aloud. This gets everyone involved and creates a simple starting point for determining value. You might find that all the numbers are fairly close so the decision is easy. If the numbers are all very different, the team can start to ask why.

Ultimately, the project manager is responsible for assigning story points to each item on the backlog. But the process is easier, and buy-in from the team is improved, when more people are involved.

4. Consider using the Fibonacci number sequence

One way to clearly define story points is to use the Fibonacci sequence rather than a linear scale. This sequence is a series of numbers in which each is the sum of the two previous numbers — 0, 1, 1, 2, 3, 5, 8, 13, 21, and so on. The Fibonacci sequence is typically modified to 0.5, 1, 2, 3, 5, 8, 13, and so forth in Agile project management.

The standard 1 to 10 rating scale is often too nuanced and doesn’t account for certain complications, like the difference between a four and a five or how to number something you’ve never encountered before. Asking team members to assign values that are more dispersed can make alignment more efficient.

5. Complete the sprint and measure the velocity

Velocity refers to how many story points a team can complete in a sprint. The first time you use story points it will be extremely difficult to estimate your team’s velocity. Pull as many tasks as the team thinks they can complete in the sprint and monitor progress.

When the sprint is done, review the work that was completed and add up the story points. That’s your first velocity estimate.

Repeat this review for the next sprint and calculate the average of the two velocity estimates. Continue totaling the completed story points after a sprint and incorporating that number into the average until your velocity number starts to remain consistent.

Learn from past estimates to improve the process

Retrospectives are estimation-focused discussions that occur once a project has ended. These meetings are designed to help teams review strengths, reflect on areas of opportunities, and adjust the process to improve future accuracy.

For example, a retrospective might include pulling up the last work items your team delivered with the story point value of eight. Ask whether each of those work items had a similar level of effort, discuss why or why not, and use that insight in future estimation discussions.

This won’t be flawless initially, but the process should improve as your team becomes more familiar with it in each new sprint. Be consistent, stay involved, and make it engaging.

Use Agile story points to improve your work management process

Many teams experience challenges with project estimation and team collaboration. Story points are a useful tool, because they help teams build an efficient work management structure that specifically targets such difficulties.

When you’re ready to improve project planning and Agile processes, start by asking your team about their smallest unit of work. Once you have the value of one story point, you can really move forward.

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