Story Points and Velocity in Scrum

Developing a software application or any product requires time and measuring the total time required to complete a specified amount of work requires some metrics. In Agile Scrum development methodology, there are two key metrics namely Story Point and Velocity, used to estimate a piece of work and measure the total amount of work completed in a Sprint.

In this article let us discuss Story Points and Velocity in more detail.

Story Points

Definition: Agile Scrum recommends Story Point as a method to measure the effort needed for a task or user story, instead of traditional time-based metrics such as hours and days estimates.

Explanation of Working: Story Points are relative units to estimate the effort required to complete a user story or task based on the amount of effort needed, complexity of the task, risk involved, and uncertainty. In Agile Scrum, there are several methods to calculate story points. Story points focus on complexity instead of exact duration to complete a task.

Common Methods of Story Points

1. The Fibonacci Sequence: This method is a popular scoring scale to estimate story points in Agile Scrum. The Fibonacci sequence does as follows 1,2,3,5,8,13,21, etc. The Higher value assigned to the user story represents greater complexity and effort needed to complete the user story.
2. T-Shirt Sizing: This method follows the T-shirt size measures such as Extra-Small, Small, Medium, Large, Extra-Large, 2XXL, etc
3. The Doubling Sequence: This is another method used to calculate story points which has numbering sequence 1,2,4,8,16 where the digits double in succession.
4. Relative Sizing: Story Points are not an absolute measure but a relative one. It’s about comparing the effort of one task or user story to another.
5. Consensus: Teams usually estimate story points collectively using techniques like Planning Poker, where team members discuss and vote on the complexity of a task until a consensus is reached.

Velocity

Definition: Velocity is a metric used to measure the amount of work a development team can accomplish within a specific Sprint in Agile Scrum.

Explanation of Working: Velocity is calculated by adding up the completed user stories within a Sprint. Velocity only considers all tasks that were completed and delivered and not any tasks that are in progress or incomplete. The only story points included in calculating Velocity are those user stories marked and accepted as ‘Done’

Example: If a scrum team completed tasks total of 80 story points in a single Sprint, then the Velocity for that Sprint is 80.

Steps in Calculating Velocity

1. Define the Unit of Measurement: Velocity is generally calculated in Story Points. Story Points can be measured by different types such as T-Shirt Sizing, Fibonacci Sequence, and so on. Identify the right type and use it to measure story points.
2. Start a Sprint: Velocity is calculated based on a Sprint and Sprint duration. So, a Sprint is the starting point for Velocity with the Story Points assigned to user stories in a Sprint
3. Work on User Stories: The development team works on user stories assigned to a Sprint and as the user stories are completed the Story Points associated with each user story contribute towards the total Velocity.
4. End of Sprint: At the end of the Sprint the user stories completed in this Sprint are verified for ‘Done’ status and the Story Points are summed up for the completed items.
5. Calculate Velocity: Velocity is calculated based on the total number of story points completed during the Sprint. This total is considered the team’s Velocity for the specific Sprint.

Uses of Velocity

1. Velocity helps teams in forecasting the continuous improvement that can be accomplished in future Sprints.
2. Velocity also assists in planning the upcoming Sprint and setting realistic goals based on the story points accomplished in the previous Sprints.
3. Velocity provides great insight into an Agile Scrum team’s work capacity and ability to complete the amount of work in future Sprints, which aids in better planning.

Relationship between Story Points and Velocity

Below are the key aspects of Story Points and Velocity as both are part of an Agile Scrum Development methodology:

1. Usage: Story Points are used to estimate user stories during Sprint Planning.
2. Calculation: Velocity is Calculated based on the total Story Points completed in each Sprint.
3. Accuracy: Velocity provides the reality check of how accurate the previous estimate was.

Velocity is also a key metric for future Sprint Planning and this can help to assess the team capacity and determine how much work they can commit for the upcoming Sprint. Story Point and Velocity are interlinked and complement each other.

Advanced Techniques

There are other Advanced Techniques to estimate story points as discussed below:

1. Planning Poker: Planning poker is an advanced method for Story Point estimation techniques. In the Scrum development team members privately choose a card with several story points that the team member has estimated for a user story specified. Once all team members choose the cards, the cards are revealed with story points and the team discusses the differences and reaches a consensus.
2. Dot Voting: The Dot Voting method is another option to estimate story points. Each team member is given a limited number of dots (stickers or markers). Using the dots, the team members can vote on the user story based on the complexity of the story points. The stories with the most dots are assigned higher story points.
3. Bucket System: In this bucket system mechanism user stories are categorized into predefined buckets of different size ranges (such as 0-1, 2-3, 5-8, etc.), and the user stories are placed in the appropriate bucket based on the relative size. The team discusses the size range given and finalizes it.

Conclusion

In this article, we have looked into the estimation techniques in Agile Scrum and how story points are used to estimate story points. We have also discussed Velocity, a method to assess the amount of work completed in a Sprint. Story Point and velocity work hand-in-hand and together they form the crucial part of Agile project management.

FAQs

1. How to use story points to estimate velocity?

Story Points are assigned to user stories using estimation techniques. At the end of a Sprint, add up all the story points which are completed. The sum of all story points is the Velocity of the current Sprint.

2. How can velocity be improved?

The Velocity of a Scrum team can be improved by identifying and removing the factors that slow down team output and efficiency such as incomplete requirements, technical debt, and too many interruptions or bottlenecks. During the retrospective meeting, the team should reflect on its strengths and weaknesses and take actions for improvement. Also, the scrum team should improve their technical and communication skills for better performance.

3. How is velocity calculated?

The sum of all story points completed in a Sprint is the Velocity of the current Sprint. Average velocity can be calculated by adding up the story points of 3- 4 completed sprints and dividing it by the number of sprints. Velocity can also be displayed on a chart with story points completed in each sprint, over time.

4. Do story points work better than time estimates?

Story Points are given to each user story based on the effort, complexity, and risk involved in completing the user story or task. Time estimation is based on the hours required to complete a user story by analyzing the units of work to be completed. But both story point and time estimation have their advantages. The best estimation method depends on project needs, goals, and team preference.