Velocity in Agile: Definition & Formula

Instructor: Stephen Meyer

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

When working on projects, measurements of past performance can help lead to future success. One of the key metrics of performance in Agile is velocity. Learn the definition and formula for velocity in Agile.

Velocity Definition

Frank and his project recently transitioned to a different project methodology. They have been using Scrum for the past eight weeks and feel that they are starting to understand it more. As they have gained more experience, Frank wants to introduce some metrics to help measure performance and target areas of improvement. He starts with velocity, which is one of the more impactful and straightforward measures.

In Scrum, which is the most common form of Agile, velocity is a measurement involving work completed over specific timeframes. The most important aspect of velocity is that it is a measure of what has been done, not what needs to be done. Nor is it the timeframe in which the work needs to be completed. It is based solely on past performance. The key inputs are work completed and specific timeframes.

The work in a Scrum project takes the form of a user story, which is a high-level description of desired functionality for a specific user. The amount of work required to complete the functionality can vary, which proves difficult for a standardized measurement. This is why user stories are given a story point estimate by the development team, which is a numeric value that reflects the time and effort involved. Estimates provide a standard reference point for the project work.

In addition to the work completed, specific timeframes are also an input for velocity. There are various methodologies that can be used to implement Agile, but Scrum is one of the few to use specific time frames, which is why velocity is most applicable to Scrum. The timeframes used are known as sprints, which are a repeated iteration throughout the project in which user stories are fully developed and tested.

Velocity Formula

Once Frank has defined velocity for his team, he moves on to identifying the formula. The formula itself is fairly straightforward. It involves dividing the total story points completed by the number of sprints in which they were completed. For example, if the team has completed a total of 70 points over a span of two sprints, the team's velocity would be 35 points per sprint (70 points/2 sprints). While the calculation is simple, there are additional considerations for the team that influence the values used in the formula.

There are two considerations for Frank and his team involving the component of the formula of work completed. The first consideration is how they view the work. The work always includes user stories that the team develops and tests during the sprint. The question is whether these are the limit. In addition to user stories, the team might work on bug fixes or production support during the sprint, taking away time and effort. Most teams only include these if they recur consistently and assign point values to them, similar to user stories.

The second consideration involving work is the definition of completed. Ideally, the user stories taken on by the team are completed in each sprint. In this circumstance, the definition of completed is clear. However, this is not always the case, and the team needs to determine whether they want to take an all or nothing approach to completion. This means either only counting user stories that are fully completed or allowing for partially completed stories.

Beyond the work completed, Frank and his team need to think about the timeframe as well. The sprint is the period during which the team commits to fully develop and test user stories. This is why sprints are used in the formula for velocity. Spring length must be kept consistent. Velocity cannot be accurately measured if the team fluctuates between two-week and three-week sprints. Given more time, the team would naturally complete more work, which would appear as a higher sprint velocity, but this would be inaccurate.

Uses of Velocity

The final aspect of velocity Frank discusses with his team is how it can be used. Understanding the definition and formula for calculation are vital, but there is also value in understanding how it can be used. There are two primary areas of use that Frank discusses, which include planning and measuring performance.

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