What Are Story Points in Agile And How to Estimate Them

Agile Stories: A Refresher

Before we talk about story points in Agile, let’s remind ourselves what stories are in the Agile context.

A story is a simple, general explanation of a specific software feature. Stories are created from the customer or end-user’s perspective and show how the particular software feature will benefit the customer.

Here’s an example of a story: “I manage a small accounting team at work, and I need a way for us to easily share spreadsheets in real-time while being able to communicate with each other simultaneously.”

What Are Story Points in Agile?

Story points are units of measurement used to determine how much effort is required to complete a product backlog item or any other piece of work. The team assigns story points based on the work's complexity, amount, and uncertainty.

The story point is a unit of measurement used to express an estimation of the effort required to implement an item on the product backlog or any other piece of work. Story points are assigned based on the complexity of the work, the amount of work, and the risk of failure.

Building off the definition of an Agile story, story points are metrics used in Agile product development and management to guess how difficult it will be to implement a user story. Put another way, it’s a numeric value that helps the development team understand how challenging the story is.

Story points in Agile are abstract measurements that developers use instead of hours. Points are relative values, so a story with a value of four is twice as hard as a story with a value of two. The actual numbers don’t matter — you could assign values between 1,000,000 and 5,000,000 if you want. Instead, you want to give the team an idea of the story’s relative difficulty. Story points tell you how much effort a given story will take to resolve.

Agile Estimation is a Team Sport

Every group member must be involved, including the designers, coders, testers, deployers, and anybody else on the team. Each team member adds a unique viewpoint to the products and the effort necessary to fulfill a user story. The number of finished/done stories the group can create is what counts, rather than the number of user stories the design team develops.

Quality is not a role that the tester "controls" but rather the job of the entire group. You do not aim to "test in" quality but "create something in."

What many companies and groups commonly overlook is the fact that when you prioritize trying to keep people occupied while focusing on operational optimization with divisions, hand-offs, and interdependence, you take longer to complete any project. Though it appears everyone is working hard, and indeed they are. Nevertheless, the outputs, productivity, and value are often significantly slower than its Agile, cooperative rival.

Story Points vs. Hours

Story points in Agile are measurement units that estimate the total effort necessary to fully implement requirements analysis items or any additional work in progress. Teams allocate story points based on the amount of action, the diversity of the activity, and the risks or uncertainties involved. 

Values are given to divide tasks into manageable segments to overcome uncertainty. This gradually fosters clarity and a sense of dedication to the project by enabling teams to grasp precisely how much they can accomplish in a given time.

Hours cannot be used as a unit of measure because they do not consider the knowledge, expertise, or effort needed to finish a project. Team members are rewarded with story points in Agile depending on the challenge magnitude rather than on the amount of time invested. This keeps the team's attention on delivering value rather than wasting time.

There is an emotional connection between dates. The emotional attachment is removed by relative estimation. No matter how skilled the development teams were, the story's richness would remain the same compared to certain other stories. The general agreement in the story points vs. hours argument is that story points in Agile can deliver what hours cannot.

Story Points and Planning Poker

Planning poker is an estimation method that encourages workplace democracy. It involves every member of the Scrum team. This practice is intended to help participants understand and quickly agree on a prediction model rather than scribble numbers on the whiteboard. The group will choose a task from the task list, have a quick discussion about it, and then each person will assess it in their mind. Next, each person holds up a card bearing a number representing their estimate.

The ideal time frame for presenting the topic, discussions, and polling is two minutes, enabling quick estimation of the entire task list. However, since the goal is to analyze the entire task list simultaneously effectively, allow yourself to give sufficient time and don't be concerned if certain articles take a little more to analyze.

It is known as a consensus-based assessment approach because it avoids the effect of several other group members and results in much more effective assessments. 

Story Points vs. Time-Based Estimation

Developers have created a broad spectrum of techniques to improve project estimations.

Two of the most typical ones are: 

• Ideal Days or Time-based Estimations
• Story Points

Project timeframes can be created using either or both.

Ideal days or time-based estimates estimate the total number of days or weeks it would take your group to finish one task if everyone focused on only that task and seemed to have no other interruptions (such as any team meetings, other projects and so on).

Estimating story points is a widespread practice in Agile projects, focusing on adaptability, ongoing learning, and teamwork. It measures the amount of work necessary to finish a particular project or an element from a task list, including anything to do with implementing novel features, addressing bugs and making significant modifications to the item in question.

Other formats besides hours can be used to compute and display project predictions. Story points in Agile estimation have grown increasingly common as a substitute for traditional time prediction and are entirely unrelated to the project's expected timeframe. Instead, it assists in determining the amount of work the project or assignment will need.

Estimate Smarter, Not Harder

Generally stated, it's impossible to figure out individual job tasks greater than those with a very high level of precision. Furthermore, the products at the highest priority in the line require this certainty the most. When anything is evaluated exceeding the group's limit, it's an indication to segment it into more complex components and re-estimate.

Provide an approximate idea for tasks further down in the task list. The point could modify the objectives that the group starts working on those elements, and your program will likely have updated. As a result, previous estimates will need to be more accurate. Don't waste a lot of time planning tasks that will most likely change. Simply provide a rough estimate so the product owner can utilize it to prioritize the product plan properly.

Why Should Teams Use Story Points in Agile?

Story points in Agile benefit development teams and product owners alike.

For development teams:

• The team gets a better grasp of what’s required of them, making it easier to develop a sound implementation strategy.
• The team won’t over plan, so they have a better chance of finishing an increment.
• The team knows how much to plan in a sprint, thereby letting them work at a sustainable pace.
• The team can create a reasonable estimate without having to commit to a specific timeframe.

For product owners:

• They can better assess an item’s return on investment (ROI) or the value for the money.
• Owners can better understand the technical risk associated with their more oversized items.
• They can better forecast the product’s longer-term delivery.

However, team members should be careful to avoid some common pitfalls.

• Don’t give story points to small tasks that the team can easily estimate timewise.
• Story point creation is a team effort, not a one-person show. Make sure the team stays engaged, and everyone contributes.
• Don’t average story points.
• Don’t let one variable influence the entire process — story points measure the whole picture (e.g., risk, complexity, uncertainty).

Where Do You Use Story Points in Agile?

Teams use story points in the Agile software application development process. Story point estimates usually occur during product backlog grooming sessions, conducted by the development and testing teams as they review the product backlog. It’s absolutely critical that the people performing the story point estimations are the people who are responsible for doing the work. The team’s Scrum Master, product owner, engineering leads, or management have no say here unless they’re doing coding too. Since they are most likely not doing coding, these parties need to sit back and let the professionals who actually do the work decide the relative difficulty of each story point.

If there are any significant differences between the estimated development time and the product owner’s expected time, everyone should get together and try to clear up any misunderstandings.

How Do You Make a Story Point Estimate?

So now that we’ve established what story points in Agile are, why they’re important, and who creates them, we need to know how to make these estimates in the first place!

When making a story point estimation during story mapping, developers must consider three factors:

• Complexity. How hard will it be to develop this feature?
• Risk. This includes random changes, dependency on third parties, vague demands, and other uncertainties.
• Repetition. How familiar are team members with the feature, and how monotonous will the required tasks be?

Here’s how a typical estimation meeting unfolds:

• The Scrum Master initiates and moderates the meeting. The Scrum Master is also responsible for creating and maintaining the project’s burndown chart.
• The product owner briefly overviews the single Product Backlog Item (PBI) that the team is estimating. Then, the group asks questions and discusses risks and assumptions.
• The team decides on a story point estimation matrix, establishing baselines of what constitutes minimal risk, repetition, and complexity.
• Each development team member compares the PBI size relative to the PBI calibration and picks an estimate. Only development team members can estimate.
• Team members call out their estimates simultaneously. The product owner can ask why members chose specific numbers and discuss the matter further. Note that this is also the phase where team members often use Planning Poker, a means of expressing an estimate by holding up a card with the corresponding number.
• Members with exceptionally high or low estimates explain their rationale. The product owner can clarify certain points and negotiate the expectations, thereby reducing the substantial point gaps.
• Repeat the process until the team reaches a consensus.

How Do You Calculate Story Points in Agile?

Teams use story points to make provisions for the time and challenges of assigning a number to every element in a task list. When estimating project plans, story points in Agile are far more thorough than focusing on just one factor—time.

There are three primary factors to story point in Agile quantification:

• Amount of Work and Repetitive Tasks
• Risks associated with a Project
• The Complexity within a Project 

The Amount of Work to Do

Not all required tasks are created equal; some project plan items could need more effort than others. This factor is defined by how accustomed the group member has become to the functionality and how repetitive particular jobs within creation are.

Risk and Uncertainty

A project plan item's story point prediction should always be influenced by the level of uncertainty and risk related to that product. Risks associated with a certain task or product include vague needs, reliance on a third person, and alterations mid-task.

Complexity

This factor is decided by how challenging the functionality is to implement. Complexity is unquestionably a crucial component of any Agile estimation process.

Your group could more precisely plan sprints, account for uncertainty, assess problems more accurately, and avoid relying excessively on time constraints by integrating the three factors mentioned above. Story points in Agile enable uniformity within teams as well as between departments.

Consider All Factors: Amount of Work, Risk and Uncertainty, and Complexity

It can seem unlikely to sum up three independent variables into one value and offer that as a projection for the planning phase. Nonetheless, since effort serves as the common denominator, it is attainable.

The scrum team members speculate about how much work will be needed to complete the tasks specified by the project plan items. These Agile teams think about how much work needs to be put into handling the risks and variability built into the project plan item. Often, this is accomplished by considering the likelihood that a problem may arise as well as the repercussions that it might have.

Teams must also take into account how complex the task is. Complex tasks will demand more thought, more trial-and-error testing, additional back-and-forth with a client, longer validation times, and more periods for error fixes.

Remember the Definition of Done

It's essential for scrum team members that they have a clear concept of what "done" comprises. They operate in sprints and require a method for determining when a user story is finally complete. Concluding a session with a user story that satisfies all of its requirements but has yet to undergo testing, seems to have no code analysis, or isn't operational is not an intelligent idea. A story point in an Agile estimate must cover everything necessary to achieve a project plan item accomplished.

Scrum, Story Points, and Conversations

Discussions are an essential factor in Agile planning. By discussing a project plan item, the group can better comprehend what is needed and identify gaps or inaccurate premises that the product manager can look into. The game of planning poker is a great method for estimating and a means of maintaining everyone's estimation a surprise until everyone in the team reveals their cards. Individualized predictions result in reduced statistical bias and more precise estimations.

The list item's story points are assigned once all the team members have reached an assessment. This estimated number of story points is then utilized to determine a team's aggregate sprint rate, potential, and other factors. 

Understanding story points in Agile can be challenging. Yet, it will be worthwhile to take the initiative to fully comprehend the story points which reflect effort — as significantly influenced by the volume of work, its complexities, and any inherent risk or uncertainties.

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FAQs

1. What are story points?

The units of measurement in Agile help determine the effort required to complete a product backlog item or another piece of work. Teams assign story points based on the complexity of work, its amount, risk or uncertainty.

2. When are story points assigned?

Story points are to be assigned to each story prior to organizing the stories vertically into sprints or releases. Typically, story points are done before sprint planning, during release planning, and even at a pre-planning phase. 

3. Why are story points better than hours?

Several reasons make story points better than hours, such as story points giving more accurate estimates, helping predict release dates, drastically reducing planning time, and helping teams enhance performance.

4. How are story points calculated in Agile?

To calculate story points, you have to assign a point value to every story. A story that is assigned two story points will require twice as much effort as a story that is assigned one story point. 

5. Why use Fibonacci for story points?

Story points represent the complexity, size, and effort required for achieving or implementing a user story. Every story point is given a number from the Fibonacci scale. The Agile Fibonacci scale provides teams with a realistic way to approach estimates employing story points. 

6. What are the disadvantages of story points?

The agile methodology involves switching from traditional ways of calculating and giving hourly estimates to story points, which can be uncomfortable for teams. Moreover, it takes time to find a story similar in size to the current story to establish the baseline. 

7. What is the purpose of story points?

Story points help estimate what amount of work your team can do in a given time. It provides accuracy for smoother plans and is valuable in the case of multiple teams with multiple dependencies.

8. How many hours are three story points?

Often teams map the story points to hours. For instance, two story points conform to a task that would consume 2-4 hours. Similarly, three-story points can be mapped for 4 to 8 hours long tasks.