5 Agile Estimation Tips To Help With Backlog Prioritization

The seventh principle of the Manifesto for Agile Software Development is:
Working software is the primary measure of progress.
Not story points, not velocity, not estimates: working software.

Jason Godesky, Better Programming

Estimation is a common challenge for agile software development teams. The anticipated size and complexity of a task is anything but objective; what is simple for one person may not be for another. Story points have become the go-to measure to estimate the effort involved in completing a task, and are often used to gauge performance. But is there real value in that, and what are the risks of relying too heavily on velocity as a guide?

Agile estimation

As humans, we are generally terrible at accurately measuring big things in units like time, distance, or in this case, complexity. However, we are great at making relative comparisons - we can tell if something is bigger, smaller, or the same size as something else. This is where story points come in. Story points are a way to estimate relative effort for a task. They are not objective and can fluctuate depending on the team's experience and shared reference points. However, the longer a team works together, the more effective they become at relative sizing.

The teams that I coach have all experienced challenges with user story estimation. The historical data tells us that once a story exceeds 5 story-points, the variability in delivery expands. Typically, the more the estimate exceeds 5 points, the more the delivery varies from the estimate.

Robin D Bailey, Agile Coach, GoSourcing

Scale of reference

While story points are useful as an abstraction for planning and estimating, they should not be over-analyzed. In a newly formed team, story points are likely to fluctuate significantly, but there can be more confidence in the reliability of estimations in a long-running team who have completed many releases together. Two different teams, however, will have different scales of reference.

At a company level, the main value I used to seek with story points was to understand any systemic problems. For example, back when Atlassian released to Server quarterly, the sprints before a release would blow out and fail to meet the usual level of story point completion. The root cause turned out to be a massive spike in critical bugs uncovered by quality blitz testing. By performing better testing earlier and more regularly we spread the load and also helped to de-risk the releases. It sounds simple looking back but it was new knowledge for our teams at the time that needed to be uncovered.

Mat Lawrence, COO, Easy Agile

Even with well-established teams, velocity can be affected by factors like heightened complexity with dependencies scheduled together, or even just the average number of story points per ticket. If a team has scheduled a lot of low-complexity tickets, their process might not handle the throughput required. Alternatively having fewer high-complexity tickets could drastically increase the effort required by other team members to review the work. Either situation could affect velocity, but both represent bottlenecks.

Any measured change in velocity could be due to a number of other factors, like capacity shifting through changes in headcount with team members being absent due to illness or planned leave. The reality is that the environment is rarely sterile and controlled.

Relative velocity

Many organizations may feel tempted to report on story points, and velocity reports are readily available in Jira. Still, they should be viewed with caution if they’re being used in a ‘team of teams’ context such as across an Agile Release Train. The different scales of reference across teams can make story points meaningless; what one team considers to be a 8-point task may be a 3-point task for another.

To many managers, the existence of an estimate implies the existence of an “actual”, and means that you should compare estimates to actuals, and make sure that estimates and actuals match up. When they don’t, that means people should learn to estimate better.

So if the existence of an estimate causes management to take their eye off the ball of value and instead focus on improving estimates, it takes attention from the central purpose, which is to deliver real value quickly.

‍Ron Jefferies
Co-Author of the Manifesto for Agile Software Development
Story Points Revisited

Seeking value

However, story points are still a valuable tool when used appropriately. Reporting story points to the team using them and providing insights into their unique trends could help them gain more self-awareness and avoid common pitfalls. Teams who are seeking to improve how they’re working may wish to monitor their velocity over time as they implement new strategies.

Certainly, teams working together over an extended period will come to a shared understanding of what a 3 story point task feels like to them. And there is value in the discussion and exploration that is needed to get to that point of shared understanding. The case for 8 story points as opposed to 3 may reveal a complexity that had not been considered, or it may reveal a new perspective that helps the work be broken down more effectively. It could also question whether the work is worth pursuing at all, and highlight that a new approach is needed.

The value of story points for me (as a Developer and a Founder) is the conversations where the issue is discussed by people with diverse perspectives. Velocity is only relatively accurate in long-run teams with high retention.

Dave Elkan, Co-CEO, Easy Agile

At a company level, story points can be used to understand systemic problems by monitoring trends over time. While this reporting might not provide an objective measure, it can provide insights into progress across an Agile Release Train. However, using story point completion as a measure of individual or team performance should be viewed with considerable caution.

Story points are a useful estimation tool for comparing relative effort, but they depend on shared points of reference, and different teams will have different scales. Even established teams may notice velocity changes over time. For this reason, and while velocity reporting can provide insights into the team's progress, it must be remembered that story points were designed for an estimation of effort, rather than a measure. And at the end of the day, we’re in the business of producing great software, not great estimates.

Looking to focus your team on improvement? Easy Agile TeamRhythm helps you turn insights into action with team retrospectives linked to your agile board in Jira, to improve your ways of working and make your next release better than the last. Turn an action item into a Jira issue in just a few clicks, then schedule the work on the user story map to ensure your ideas aren’t lost at the end of the retrospective.

Many thanks to Satvik Sharma, John Folder, Mat Lawrence, Dave Elkan, Henri Seymour, and Robin D Bailey for contributing their expertise and experience to this article.

Story points can be a little confusing and are often misunderstood. Story points are an important part of user story mapping, and many agile teams use them when planning their work. But they aren't as simple as adding numbers to tasks or estimating how long a job will take.

Even if you’ve been using story points for a while, you’ll find that different teams and organizations will use them differently.  

So, let’s define story points, discuss why they’re so useful for agile teams, and talk about some of the different ways teams implement them in story mapping and sprint planning.

What are user story points?

Story points are a useful unit of measurement in agile, and an important part of the user story mapping process. You assign a number to each user story to estimate the total effort required to bring a feature or function to life.

When to estimate story points

User stories can be estimated during user story mapping, backlog refinement, or during sprint planning.

Once a user story has been defined, mapped to the backbone, and prioritized, it's time to estimate the story points. It is a good idea to work with your team to do this, as each team member plays a different role in different stories, and knows the work involved in UX, design, development, testing, and launching. Collaborating on story point estimation will also help you spot dependencies early.

It is best to assign story points to each user story before you sequence them into releases or sprints. This allows you to assess the complexity, effort, and uncertainty of each user story in comparison to others on their backlog, and to make informed decisions about the work you decide to commit to each sprint or release.

How to estimate user story points

When estimating story points, you're looking at the total effort involved in making that feature or functionality live so that it can deliver value to the customer. Your team will need to discuss questions like:

• How complex is the work?
• How much work is needed?
• What are the technical abilities of the team?
• What are the risks?
• What parts are we unsure about?
• What do we need in place before we can start or finish?
• What could go wrong?

Tip: If you're having trouble estimating a story or the scope of work is overwhelming, you might need to break your story down into smaller parts to make multiple user stories.

What is a story point worth?

This is where story points can get a little confusing, as story points don’t have a set universal value. You kind of have to figure out what they’re worth to you and your team (yep, real deep and meaningful stuff).

Here’s how it works:

• Each story is assigned a certain number of story points
• Points will mean different things to different teams or organizations
• 1 story point for your team might not equal the same amount of effort involved in 1 story point for another team
• The amount of effort involved in 1 story point should remain stable for your team each sprint and it should remain stable from one story to another
• 2 story points should equal double the effort compared to 1 story point
• 3 story points should equal triple the effort compared to 1 story point… and so on

The number you assign doesn't matter - what matters is the ratio. The story points should help you demonstrate relative effort between each story and each sprint.

Estimating story points for the first time

Because story points are relative, you need to give yourself some baseline estimates for the first time you do story point estimation. This will give you a frame of reference for all future stories.

Start by choosing stories of several different sizes:

• One very small story
• One medium sized story
• One big story

...a bit like t-shirt sizes.

Then assign points to each of these baseline stories. Your smallest story might be 1. If your medium story requires 3 times more effort, then it should be 3. If your big story requires 10 times the effort, it should be 10. These numbers will depend on the type of stories your team normally works on, so your baseline story numbers might look different to these.

The important thing is that you’ll be able to use these baseline stories to estimate all your future stories by comparing the relative amount of effort involved.

Over time, you and your team will find estimating user stories becomes easier as your shared understanding of the work develops. This is where story points become most valuable, helping your team align expectations and plan more effectively.

Make estimation easier

An app for Jira like Easy Agile TeamRhythm makes it easy to see team commitment for each sprint or version, with estimate totals on each swimlane.

Using the Fibonacci sequence for story point estimation

Some teams use the Fibonacci sequence (1, 2, 3, 5, 8, 13, 21, 34, 55, 89, etc.) for their story point estimates, rather than staying linear or allowing teams to use any number (1, 2, 3, 4, 5, 6, 7, etc.).

This has its benefits. For example, if you're looking at a story and trying to estimate whether it's a 5, 8, or 13, it's much quicker and easier to come up with an answer than trying to land on the right number between, say, 4-15. You'll likely reach a consensus much more quickly.

This also means you won't be able to average the team's story points to finalize the estimation. Instead, you'll need to discuss the work and decide on the best estimate from a limited set of options.

But it does limit your options - if you have a story that’s more effort than 34, but less than 55, your estimate might be less accurate.

Using story points to estimate velocity

After some time working together most teams will have a good idea about how much effort is involved in each story point.

Of course, timing isn't exact - there's a bell curve, and story points are designed to be an estimate of effort, not time.

But story points (and knowing their approximate timing) can be useful when it comes to figuring out how much your team can get done each sprint.

You should be able to estimate about as many story points your team can manage during a two-week sprint, or whatever timeframe you’re working to.

For example, if your team can usually get through 3 story points per day, this might add up to 30 story points across a two-week sprint. This is your velocity.

Velocity is useful for user story mapping and sprint planning. When mapping your user stories to sprints or versions, you can check the total story points and make sure it matches up with your velocity so you’re not over- or under-committed.

As you can see there are a few different methods for estimating work. The best advice is to be conservative and not overload the team.

Over time, your estimations should become more accurate.

Using Story Points in Scrum, Kanban, and Extreme Programming

Story points are central to estimation and planning processes in many agile methodologies. Scrum and Extreme Programming (XP) rely heavily on story points to gauge the effort and complexity of user stories.

Scrum teams use story points during sprint planning to decide which tasks to include in the upcoming sprint, encouraging discussion that leads to shared context and understanding of the work.

Extreme Programming on the other hand, uses story points to assess the size of features, enabling teams to prioritize and allocate resources effectively. Teams using Kanban can benefit from story points by using them to set work-in-progress limits and optimize the flow of tasks across the board.

While the specific practices may differ, story points can help encourage team collaboration and a more predictable flow of work.

One of the core functions of an agile software development team is effort estimation. You can't properly prioritize a product backlog without first having an idea of the amount of work it will take to finish each of its user stories. One agile estimation technique is planning poker. Agile development is a collaborative pursuit, and planning poker is a consensus-building exercise that gets your entire team involved in the estimation process.

Software development teams use planning poker to assign effort (for example, story points or ideal days) to items in their product backlog. Sometimes also called Scrum poker, it's a gamified way to build consensus by allowing all of the Scrum team members to participate in the estimation process. Physical or digital poker cards are used to facilitate a collaborative planning session. ♠️

Here, we give you a how-to guide to planning poker. First, we'll show you how to play it in the context of a sprint planning meeting. Second, we'll look at some of its benefits as an estimation technique. Then, we'll see why planning poker can be used in product roadmap planning. It can help get your stakeholders involved in a consensus-building estimation session around your product's customer themes.

Playing planning poker — agile collaboration

One of the critical activities for agile teams during a sprint planning session is estimating the amount of effort it will take to complete each user story in the sprint. A common way to do this is to allow a single person, like the product owner or a software developer, to assign story points to each user story. Alternatively, you can use planning poker as an estimating technique to get the whole team involved.

A planning poker session is a fun and collaborative way to gamify sprint planning. After all, the Agile Manifesto highlights the value of collaboration and interactions in software development. Planning poker is a great way to adhere to those agile principles.

So, it's sprint planning day. When your team members are gathered, do the following:

1. Set the stage. If your team is new to planning poker, explain the process. They'll use playing cards to estimate the size of each user story in the next sprint iteration. The product owner or Scrum master will act as the moderator, all team members will play, and there will be plenty of room for discussion and questions throughout the session.
2. Hand out the poker cards. Give each player an identical set of numbered cards. We recommend using the Fibonacci sequence — 0, 1, 2, 3, 5, 8, 13, 21, etc. (To read why this sequence is so effective for estimating, see Mike Cohn of Mountain Goat Software's explanation.) And by the way, if you can't meet in person and are planning as a distributed team, then you can try planningpoker.com as a way to conduct your session remotely. 😃
3. Read a user story. The moderator reads the team members a story from the sprint. They should provide as much detail and context as possible to help the team estimate the work involved.
4. Discuss the story as a group. First, let the team ask any clarifying questions about the user story that was just read. Then, open the floor for discussion — each team member can describe what it will take to get the story done, any dependencies blocking the work, and who on the team might need to be involved in its effort.
5. Play cards. Now, it's time to play the game. Each team member submits a card (face down!) to the moderator. When all the playing cards are submitted, the moderator reveals what each one estimates. In an ideal world, all of the numbers match! This means there is perfect team consensus about the effort required for that sprint item and you can move on to the next one.
6. Discuss and estimate again. Most likely, there will be some difference in the initial estimates. This gives each team member a great opportunity to provide support for why their estimates were either higher or lower than the others. Then, you can do another round of submitting and revealing cards to see if there is further consensus. Tip: Let the moderator decide when to end the round. Remember, you don’t need a perfect story point consensus for every user story.

You did it! Your sprint is planned, and the entire team gained a shared understanding of how each member perceived the effort and work needed to get each user story done.

The benefits of planning poker agile estimation

As an agile estimating and planning technique, planning poker has its pros:

• It encourages collaboration. As a cross-functional team, it's important that each team member has a voice during the estimation process. As each estimator provides their perspective on a user story, the group better understands how they arrived at their conclusion.
• It drives consensus amongst your entire team. With each round of planning poker, the team’s estimates are more likely to converge.
• It has documented merit as a more accurate way to estimate (versus a single person providing the estimates).

In a study published by ScienceDirect, planning poker was used to estimate half of the work of a software project. There were two discoveries. First, planning poker estimates were statistically higher than individual estimates. Second, the poker estimates turned out to be more accurate than the individual estimates for the same tasks.

Planning poker for roadmap planning

Planning poker is a fun and effective way to gain an accurate estimate for your product backlog items. But, why not also use it for strategic planning sessions like roadmap planning?

In our definitive guide to product roadmaps, we discuss how roadmaps focus on big-picture, customer-centric themes, as opposed to individual features. We also highlight that developing your product roadmap should be a collaborative process (just like sprint planning) and should involve multiple stakeholders.

So, go back to the steps above. Think about how you can use planning poker cards to get your relevant stakeholders to estimate the relative size of each customer theme in your product roadmap. It will be a fun way to get a big-picture consensus of your organization's product vision.

Grouping your themes

Planning poker is a collaborative way to get the whole team to help estimate the work involved in a user story. It drives consensus and tends to be more accurate.

If you use Jira to conduct your sprint planning meetings, you already have a tool that organizes your user stories and product backlog. As you try planning poker in your next product roadmap planning meeting, give Easy Agile User Roadmaps for Jira a look. It provides the ability to group Jira items into themes that your stakeholders can easily see. Happy playing!