Estimating Agile Story Points

Instructor: Stephen Meyer

Stephen has worked as a Project Manager and is PMP certified, as well as certified by the Scrum Alliance.

Each task in a project involves a varying combination of time and effort to complete. Agile attempts to quantify this combination using story points. Learn about estimating Agile story points.

What is the Point?

Eric and his team have been using Agile for the past few years. They have recently added a new team member who is familiar with project work but new to Agile. She is excited by the prospect of breaking down project work and timeframes into more manageable pieces and having some flexibility. However, when the team starts talking about estimates for project work, she wonders if Agile is actually different than other methodologies or if set deadlines/delivery dates are inescapable. Eric and the team reassure her by discussing what the estimation is and for what purpose it is used.

In Agile, the breakdown of project work takes the form of user stories. These are requirements that are centered on desired functionality for specific users. The time and effort involved with developing and testing each user story is quantified with a story point estimate. The story point estimate is a numeric value that often follows a Fibonacci-like sequence, such as 1, 2, 3, 5, 8, 13, etc., rather than a linear progression of 1, 2, 3, 4, 5. The non-linear sequence helps create a distinction between the values. For example, the difference between 8 and 13 is clearer than 8 and 9. Regardless of the number, the key is that the estimate represents a combination of both time and effort.

The purpose of the story point estimate is twofold. The first is to quantify project work, which varies greatly, in a standard way. User stories could involve a straightforward web display, data/architecture, complex coding, or any combination of these. Regardless of the requirements involved, the team should be able to quantify each user story with a story point estimate. For example, if the team estimates two different user stories each as a 3, they should take similar time and effort to complete.

The second purpose is that the story point estimates can be used to determine how much work can be completed in a given period of time, typically 2 or 4 week repeated intervals, known as sprints. This is based on the team establishing velocity or story points per sprint. Over time, the team can see how many story points are completed each sprint and use this number as a target. This is beneficial in the short-term for the Product Owner who requests the work, other stakeholders, and the team because it sets realistic expectations for each sprint. In the long-term, it helps the Product Owner and stakeholders forecast and plan beyond a single sprint.

Story Point Source

Once Eric and the team have defined story point estimates and their purpose, they move on to the source of story point estimates. The 'what' and the 'why' are valuable, but these do not address when they are created and from where they come. It is also important to understand how they are determined.

The team meets together to review each user story and provide story point estimates in a recurring meeting known as sprint planning. This meeting occurs at the beginning of each sprint and determines the work that will be completed during. Each user story is discussed in detail and the team has the opportunity to get clarity on any aspects that are unclear. If there are outstanding questions or issues that cannot be resolved, the team does not create a story point estimate. If the user story is understood by the team, a story point estimate is given.

Story point estimates are created solely by the development team. This is important because ownership and accountability are achieved when the team creates the estimates. This is a change from most project methodologies where everything from the project work to the deadlines and delivery dates come from outside the team, who are the ones completing the work and under the constraints. Agile empowers the development team regarding the project work and timelines.

The team creates each story point estimate by consensus before it is assigned to a user story. This leads to consistency because every team member is involved with every story point estimate. Typically, each person will vote using something like a numbered card. If all the numbers match, the team assigns the story point estimate. When the numbers are different, each unique value is defended by a team member and another vote occurs. If there is still disagreement, the team determines whether a majority is acceptable or some other action is needed.

Story Point Estimation

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