What Are Story Points in Agile? A Guide to Agile Estimation

18.08.2023
Alfa Sommersol

In the Agile world, story points are a vital component of the estimation process. They help teams measure the complexity and effort required to complete a user story. In this article, we will explore what story points are in Agile, why they are important, how they are used in Agile ceremonies, and provide practical tips for effective estimation. Let's dive in!

Understanding Story Points

Story points are a unit of measurement used in Agile methodologies, such as Scrum, to estimate the effort required to complete a user story. They are not based on time but rather take into account factors like complexity, risk, and uncertainty. Story points provide a relative measure of the work involved, allowing teams to compare and prioritize user stories.

The Purpose of Story Points

The primary purpose of using story points in Agile is to facilitate planning and decision-making. By assigning story points to user stories, teams can estimate the amount of work they can complete within a given time frame, such as a sprint. This helps with resource allocation, setting realistic expectations, and tracking progress.

The Agile Estimation Process

The Agile estimation process involves multiple steps, including backlog refinement, story pointing, and collaborative discussions. Let's break down each step to understand how story points are determined.

Backlog Refinement

Before story pointing can take place, the product backlog needs to be refined. This involves the Product Owner and the development team clarifying user stories and adding details, acceptance criteria, and dependencies. Backlog refinement ensures that the user stories are well-understood and ready for estimation.

Story Pointing

Once the backlog is refined, the team can begin assigning story points to each user story. Story pointing is typically done using a collaborative technique called Scrum Poker or Planning Poker. There are multiple ways of estimating user stories such as story points or t-shirt sizes. When playing poker, team members use a set of physical cards or an online scrum poker tool with numbered cards representing story points to independently estimate the effort required for each user story. The team then discusses their estimates and seeks consensus.

Collaborative Discussions

Collaborative discussions play a crucial role in the story pointing process. Team members share their perspectives, ask questions, and provide insights into the complexity, effort and risks associated with each user story. These discussions help ensure a shared understanding and lead to more accurate estimations.

Story Points vs. Hours

One common misconception is that story points are equivalent to hours. However, story points are a relative measure of effort, not a direct measure of time. Unlike hours, which can vary based on individual skills and experience, story points provide a standardized measure that allows for better comparison and planning.

Benefits of Using Story Points

Using story points in Agile estimation offers several benefits:

Relative Estimation: Story points provide a relative measure of effort, allowing teams to compare user stories and prioritize their work effectively.
Flexibility: Story points can be adjusted as new information becomes available or as the team's understanding of a user story evolves.
Focus on Complexity: Story points focus on the complexity of a user story rather than just the time required to complete it. This helps teams consider various factors that contribute to the effort involved.
Improved Planning: Story points enable teams to plan sprints, allocate resources, and set realistic expectations for stakeholders.
Tracking Progress: By tracking the number of story points completed in each sprint, teams can measure their velocity and make data-driven decisions.

Common Challenges and Pitfalls

While story points can be a powerful tool, there are some common challenges and pitfalls to be aware of:

Misaligned Understanding: If team members have different interpretations of what a story point represents, it can lead to inconsistent estimations and misunderstandings.
Inaccurate Comparisons: Story points are team-specific and should not be compared across different teams or organizations. Each team develops its own reference point for story points based on their collective experience and skills.
Overemphasis on Precision: Story points are meant to provide a rough estimation rather than an exact measurement. Overemphasizing precision can lead to unnecessary debates and delays in the estimation process.

Best Practices for Effective Story Point Estimation

To ensure effective story point estimation, it is helpful to follow these best practices:

Establish a Common Understanding: Ensure that the team has a shared understanding of what story points represent and how they should be assigned. This will help align estimations and avoid misunderstandings.
Regularly Refine the Backlog: Invest time in backlog refinement sessions to clarify user stories and eliminate ambiguity. Well-defined user stories lead to more accurate estimations.
Leverage Collaborative Techniques: Encourage open discussions and collaboration during the estimation process. This helps capture different perspectives and leads to more accurate estimations.
Consider Historical Data: Use historical data and past experiences to inform story point assignments. This can provide valuable insights and help improve estimation accuracy over time.
Regularly Review and Adapt: Review the accuracy of estimations and adjust story points as needed. Regularly revisiting and refining estimations ensures continuous improvement.

Shared understanding through estimation

Story points are a critical component of Agile estimation, providing a relative measure of the complexity and effort required to complete user stories. By understanding the purpose of story points, following best practices, and avoiding common pitfalls, teams can effectively plan their work, track progress, and make data-driven decisions. Remember, story points are a tool to facilitate collaboration and shared understanding, enabling Agile teams to deliver value efficiently.

How to start story point estimation

When I introduce story point estimation to Teams that are not used to relative estimation I follow these steps.

Agree on why you should use story points - and there are a lot of good reasons, but some is probably more important to you than others.
Establish a baseline. In my experience I start with the stories/task that the team have been working on for the last couple of weeks and we try to estimate them in story points relative to each other. When you have a common idea of a smaller story/task like 1-3, and a medium 5-13 and a large story from 20 and up you are ready to get going. Only use the stories/tasks that everyone can relate to. that makes it all easier.
Start estimating in points. In my experience people are uncertain to start of with and that is ok. after 2-3 planning sessions you start to have a common idea of the baseline. One thing that you will notice right away is that the planning poker session lets everyone talk. even the quietest of the developer on the team now has a voice which is a nice outcome by it self :)
Keep going even if the expected outcome isn’t there after the first run. give it 3-4 sprints and then evaluate.

Ensure that all team members think for themselves before anyone reveals their estimates. It is so easy to affect each other which is why planning poker is a strong game.

If you all sit together start with physical planning poker cards. If you are in a remote setup then choose a simple tool to help with the process. Simplicity is key for me, hence I created this planning poker tool , so if you like simple things please try it out :)

Happy story pointing!