What Are Story Points In Agile and How to Estimate Them?

In the world of Agile project management, the primary purpose of story points is to estimate the overall effort required to implement a product backlog item or any other work. This goes beyond the traditional metrics of time and effort, taking into account the complexities and potential obstacles along the way.

If you want to explore the intricate process of estimating the story points and learning the nitty-gritty of this concept, then we suggest you stick with us until the end. 

In this blog, we will discuss the purpose & benefits of estimating story points, how to correctly estimate them, along with some real-life examples. 

Benefits of Using Agile Story Points?

Story points quantify the efforts involved in completing a task, whether it is developing a feature, fixing, or updating an item - creating a better understanding of the full scope of the project. Unlike traditional estimation methods, it doesn’t take into account the number of hours or days needed to perform a task. Rather, it highlights a detailed structure of a project framework, including the resources needed, any risks that may be involved, and so on.

This elaborative approach to estimation has a variety of benefits, including:

• Efficient Task Management: Every project is broken down into smaller tasks making it more manageable. The speciality of story points is that it encourages the project managers to take a closer look into each task. If in the process, the manager realizes that any unit of work requires too many points or has any potential risk then it is broken down further to achieve it efficiently.
• Better Understanding of Work Capacity: With the help of story points, the teams develop a better understanding of the work that is possible to complete in a sprint. It helps the teams avoid the risk of overcommitting by including tasks more than their actual capabilities in a sprint from the backlog. In short, story points provide a clear picture of the resources needed.
• Anticipating Challenges: Assigning the right number of story points requires evaluating each task before derailing a project. Since the story points focus on identifying possible complications that help in foreseeing challenges to avoid roadblocks. 
• Continuous Improvement: Estimates become more accurate over time. As the team works on more sprints, the more confident they become and it helps them measure their performance from the initial estimates and adjust the story points accordingly. Consequently, it helps to deliver more reliable results and improve their estimation skills.

How to Estimate Story Points?

Story points encapsulate a variety of factors, including complexity, effort, and risk. It takes both technical and non-technical aspects, enabling the team to consider the full spectrum of challenges involved in a user story.

Estimating Agile story points is a collaborative and an iterative process involving the effort of the whole team. Follow the below-mentioned steps to estimate story points effectively.

• Define your scale: The very first step is to estimate the story points is to define the scale your team will use. The most important thing that you must keep in mind is that the scale should be large enough to accommodate all the tasks, but not too large to create confusion or ambiguity. There is no universal scale for story points, but some common ones are the Fibonacci sequence (1, 2, 3, 5, 8, 13, etc.), the powers of two (1, 2, 4, 8, 16, etc.), or a simple linear scale (1, 2, 3, 4, 5, etc.). It is advisable to limit the scale to 10 or fewer values.

• Choose a reference task: The next step to follow is to choose a reference task that represents a baseline for your story points. The chosen task must be familiar to the team, has a clear scope and definition of done, that requires a moderate level of effort. It should be assigned a value on your scale, such as 2 or 3, and serve as a benchmark for comparing other tasks.

• Estimate other tasks relative to the reference task: The team should then compare the tasks in the backlog to the reference task to estimate it effectively. Suppose, if a task is 2X complex or time consuming of the reference task then it should be assigned twice as many story points. Similarly, if it is half as complex or time consuming than the reference task then it should be assigned half as many story points. 

• Use a consensus-based technique: It is recommended to use a consensus-based technique for estimating story points to ensure that everyone on the team has a voice and a chance to share their perspective. One popular technique is planning poker, where each team member privately selects a card with a story point value and reveals it simultaneously. If there is a consensus, the task is assigned that value. If there is a disagreement, the team discusses the reasons and tries to reach a mutual decision. Another technique is affinity mapping, where the team sorts the tasks into groups based on their relative size and assigns a story point value to each group.

Estimating story points is a continuous learning process. The team must put efforts to consistently review their estimates to identify any gaps or inconsistencies and make adjustments accordingly.

Asking few questions during the interview can help you immensely:

• 1How accurate were your estimates? Did you overestimate or underestimate the effort of some tasks?
• 2What factors caused the discrepancies between your estimates and your actual performance?
• 3How can you improve your estimation process for future tasks and sprints?
• 4How can you communicate your estimates and expectations more clearly to the product owner and other stakeholders?

Like any tool, story points too can be misused. To avoid any such situation, you must take care of the following things:

• Point Inflation: Avoid the temptation to assign a high number of points to evaluate a task to make it seem overly complex. Instead, keep the evaluation scale calibrated and consistent. 

• Point Fixation: Points are a means to measure a task, not an end. Don't get bogged down in endless debates or achieving point targets rather focus on delivering real value.

• Solo Estimation: Always remember that it is a collective effort. Therefore, everyone’s perspective matters - from developers to designers to testers.

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Final Thoughts

Agile Story points are a powerful tool for agile teams to estimate the effort and time required to complete the tasks in the product backlog. It helps the team to break down the project into smaller and more manageable pieces. Also, it helps in gaining a better understanding of the scope of the project and its complexities to deliver more reliable and consistent results. Remember, estimating story points is a continuous process of evaluations, therefore, do not run after creating perfect estimates. Plan, execute, review, and improve.

With that we have come to the end of this blog, if you have any questions or queries, do hit us in the comment section.