story-points

Story Points

Business / By / November 27, 2023

Story Points, a relative estimation technique in Agile, gauge complexity and effort for user stories. Utilizing scales like Fibonacci and T-shirt sizes, they provide a relative comparison. Benefits encompass focus on complexity, adaptability, and collaboration. Challenges include subjectivity, inconsistent scale, and external factors. Use cases span sprint, feature, and release planning.

Understanding Story Points:

What are Story Points?

Story points are a unit of measure used in Agile software development to estimate the relative complexity and effort required to complete a user story or a task. They provide a way for Agile teams to assess the size and complexity of work items, allowing for better planning, prioritization, and tracking of project progress.

Key Elements of Story Points:

  1. Relative Estimation: Story points are a form of relative estimation, where tasks are compared to one another based on their perceived complexity. They do not represent an absolute measure of time or effort but rather a comparative assessment.
  2. Fibonacci Sequence: Story points are often assigned using a modified Fibonacci sequence (e.g., 1, 2, 3, 5, 8, 13, 21, etc.). This non-linear scale reflects the increasing uncertainty and variability in estimating larger and more complex tasks.
  3. Team Consensus: The estimation process involves the entire Agile team, including developers, testers, and other relevant stakeholders. Team members discuss and debate the complexity of each task to reach a consensus.
  4. Velocity: Velocity is a measure of a team’s capacity to complete story points within a specific time frame, typically measured in iterations or sprints. It helps in predicting how much work can be completed in future iterations.

Why Story Points Matter:

Understanding story points is crucial for Agile development teams and organizations that want to embrace Agile methodologies. Recognizing the significance of this concept, its benefits, and its potential challenges is essential for delivering successful software projects.

The Impact of Agile Estimation:

  • Predictability: Story points provide a basis for predicting how much work a team can complete in a given time frame, leading to more accurate release planning and project forecasting.
  • Transparency: Using story points promotes transparency in the estimation process, as the entire team collaboratively discusses and agrees upon the complexity of work items.

Benefits of Story Points:

  • Improved Planning: Story points facilitate better planning by helping teams allocate resources effectively and prioritize tasks based on their complexity.
  • Enhanced Team Collaboration: The estimation process fosters collaboration among team members, ensuring that everyone has a shared understanding of task complexity.
  • Adaptability: Agile teams can adapt to changing requirements more easily when they use story points, as they focus on relative complexity rather than fixed timelines.

Challenges in Using Story Points:

  • Subjectivity: Estimating complexity is subjective, and different teams or individuals may assign different story point values to the same task.
  • Learning Curve: Adopting story points may require teams to learn and adapt to a new estimation method, which can be challenging initially.
  • External Pressure: Organizations or stakeholders may expect fixed timelines, making it challenging to communicate the relative nature of story points.

Challenges in Implementing Story Points:

Implementing story points effectively can be challenging due to the subjectivity of estimation and the need for team consensus. Recognizing and addressing these challenges is vital for teams seeking to use story points successfully.

Subjectivity of Estimation:

  • Varying Interpretations: Team members may have different interpretations of what constitutes a “3-point” or “5-point” task, leading to inconsistency in estimation.
  • Experience Variation: The experience and familiarity of team members with the project domain can affect their ability to estimate accurately.

Estimation Techniques:

  • Wideband Delphi: The Wideband Delphi technique, often used for story point estimation, can be time-consuming and may require facilitation to ensure team alignment.
  • Relative Complexity: The concept of relative complexity, while valuable, can be challenging for stakeholders outside the development team to grasp, leading to communication difficulties.

Velocity Changes:

  • Changing Team Dynamics: Changes in team composition, skills, or expertise can impact velocity and, by extension, the predictability of future iterations.
  • External Factors: External factors, such as unexpected technical challenges or shifts in project scope, can disrupt velocity and make estimation less reliable.

Scaling Challenges:

  • Scaling Agile: For large-scale Agile implementations involving multiple teams, synchronizing estimation practices and maintaining consistency across teams can be challenging.
  • Time Constraints: Teams may feel pressure to complete estimation quickly, leading to rushed or inaccurate estimates.

Story Points in Action:

To understand story points better, let’s explore how they can be applied in a real-life Agile development scenario and what they reveal about project management and estimation.

Agile Sprint Planning:

  • Scenario: An Agile development team is planning a two-week sprint to develop new features for a web application.
  • Story Points in Action:
    • Estimation Meeting: The team holds an estimation meeting where they review user stories and tasks for the sprint.
    • Relative Estimation: They assign story points to each task based on their discussions and consensus on the perceived complexity relative to other tasks.
    • Velocity Calculation: The team calculates their velocity by considering the number of story points completed in previous sprints. This helps them forecast how many story points they can commit to for the upcoming sprint.
    • Prioritization: The team uses story points to prioritize tasks, focusing on those with the highest business value and manageable complexity.

Release Planning:

  • Scenario: A product owner is planning the release of a new software product and needs to estimate how long it will take to complete all remaining features.
  • Story Points in Action:
    • Backlog Review: The product owner reviews the backlog of user stories and tasks, each assigned story points by the development team.
    • Velocity Projection: By considering the team’s average velocity, the product owner estimates how many sprints it will take to complete the remaining work.
    • Release Date: Based on the sprint duration and number of sprints required, the product owner sets a release date for the product.

Managing Scope Changes:

  • Scenario: Midway through a project, stakeholders request additional features that were not initially planned.
  • Story Points in Action:
    • Scope Assessment: The development team assesses the complexity of the new feature requests by assigning story points.
    • Impact Analysis: The team considers the potential impact of incorporating the new features on the project timeline and overall scope.
    • Trade-offs: The product owner and stakeholders discuss trade-offs, such as extending the project timeline, reprioritizing existing work, or phasing in the new features over multiple releases, based on the estimated story points.

Cross-Team Collaboration:

  • Scenario: A large organization uses multiple Agile development teams to work on different components of a complex software system.
  • Story Points in Action:
    • Consistency: Teams across the organization adopt consistent story point estimation practices to ensure alignment.
    • Synchronization: Teams periodically meet to synchronize their estimation scales and practices to maintain consistency in relative complexity assessments.
    • Scaling: The organization scales Agile practices effectively by using story points as a common language for estimating and prioritizing work.

Key Conclusions – Story Points:

  • Story points are a relative estimation technique in Agile that measures the complexity and effort required for user stories rather than focusing on time-based estimates.
  • Story points utilize relative comparison, allowing teams to assign values based on the relative complexity of user stories within a project or backlog.
  • Common scales for story points include the Fibonacci sequence and T-shirt sizes.
  • The benefits of story points include their focus on relative complexity, adaptability to changing requirements, and enhancement of team collaboration.
  • Challenges with story points include subjectivity in interpretation, potential inconsistent understanding of the chosen scale, and the impact of external factors on estimation.
  • Story points are valuable for efficient sprint planning, user story prioritization, and effective feature and release planning in Agile development.

Connected Agile & Lean Frameworks

AIOps

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AIOps is the application of artificial intelligence to IT operations. It has become particularly useful for modern IT management in hybridized, distributed, and dynamic environments. AIOps has become a key operational component of modern digital-based organizations, built around software and algorithms.

AgileSHIFT

AgileSHIFT
AgileSHIFT is a framework that prepares individuals for transformational change by creating a culture of agility.

Agile Methodology

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Agile started as a lightweight development method compared to heavyweight software development, which is the core paradigm of the previous decades of software development. By 2001 the Manifesto for Agile Software Development was born as a set of principles that defined the new paradigm for software development as a continuous iteration. This would also influence the way of doing business.

Agile Program Management

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Agile Program Management is a means of managing, planning, and coordinating interrelated work in such a way that value delivery is emphasized for all key stakeholders. Agile Program Management (AgilePgM) is a disciplined yet flexible agile approach to managing transformational change within an organization.

Agile Project Management

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Agile project management (APM) is a strategy that breaks large projects into smaller, more manageable tasks. In the APM methodology, each project is completed in small sections – often referred to as iterations. Each iteration is completed according to its project life cycle, beginning with the initial design and progressing to testing and then quality assurance.

Agile Modeling

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Agile Modeling (AM) is a methodology for modeling and documenting software-based systems. Agile Modeling is critical to the rapid and continuous delivery of software. It is a collection of values, principles, and practices that guide effective, lightweight software modeling.

Agile Business Analysis

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Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Agile Leadership

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Agile leadership is the embodiment of agile manifesto principles by a manager or management team. Agile leadership impacts two important levels of a business. The structural level defines the roles, responsibilities, and key performance indicators. The behavioral level describes the actions leaders exhibit to others based on agile principles. 

Andon System

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The andon system alerts managerial, maintenance, or other staff of a production process problem. The alert itself can be activated manually with a button or pull cord, but it can also be activated automatically by production equipment. Most Andon boards utilize three colored lights similar to a traffic signal: green (no errors), yellow or amber (problem identified, or quality check needed), and red (production stopped due to unidentified issue).

Bimodal Portfolio Management

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Bimodal Portfolio Management (BimodalPfM) helps an organization manage both agile and traditional portfolios concurrently. Bimodal Portfolio Management – sometimes referred to as bimodal development – was coined by research and advisory company Gartner. The firm argued that many agile organizations still needed to run some aspects of their operations using traditional delivery models.

Business Innovation Matrix

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Business innovation is about creating new opportunities for an organization to reinvent its core offerings, revenue streams, and enhance the value proposition for existing or new customers, thus renewing its whole business model. Business innovation springs by understanding the structure of the market, thus adapting or anticipating those changes.

Business Model Innovation

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Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.

Constructive Disruption

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A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.

Continuous Innovation

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That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.

Design Sprint

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A design sprint is a proven five-day process where critical business questions are answered through speedy design and prototyping, focusing on the end-user. A design sprint starts with a weekly challenge that should finish with a prototype, test at the end, and therefore a lesson learned to be iterated.

Design Thinking

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Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.

DevOps

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DevOps refers to a series of practices performed to perform automated software development processes. It is a conjugation of the term “development” and “operations” to emphasize how functions integrate across IT teams. DevOps strategies promote seamless building, testing, and deployment of products. It aims to bridge a gap between development and operations teams to streamline the development altogether.

Dual Track Agile

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Product discovery is a critical part of agile methodologies, as its aim is to ensure that products customers love are built. Product discovery involves learning through a raft of methods, including design thinking, lean start-up, and A/B testing to name a few. Dual Track Agile is an agile methodology containing two separate tracks: the “discovery” track and the “delivery” track.

eXtreme Programming

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eXtreme Programming was developed in the late 1990s by Ken Beck, Ron Jeffries, and Ward Cunningham. During this time, the trio was working on the Chrysler Comprehensive Compensation System (C3) to help manage the company payroll system. eXtreme Programming (XP) is a software development methodology. It is designed to improve software quality and the ability of software to adapt to changing customer needs.

Feature-Driven Development

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Feature-Driven Development is a pragmatic software process that is client and architecture-centric. Feature-Driven Development (FDD) is an agile software development model that organizes workflow according to which features need to be developed next.

Gemba Walk

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A Gemba Walk is a fundamental component of lean management. It describes the personal observation of work to learn more about it. Gemba is a Japanese word that loosely translates as “the real place”, or in business, “the place where value is created”. The Gemba Walk as a concept was created by Taiichi Ohno, the father of the Toyota Production System of lean manufacturing. Ohno wanted to encourage management executives to leave their offices and see where the real work happened. This, he hoped, would build relationships between employees with vastly different skillsets and build trust.

GIST Planning

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GIST Planning is a relatively easy and lightweight agile approach to product planning that favors autonomous working. GIST Planning is a lean and agile methodology that was created by former Google product manager Itamar Gilad. GIST Planning seeks to address this situation by creating lightweight plans that are responsive and adaptable to change. GIST Planning also improves team velocity, autonomy, and alignment by reducing the pervasive influence of management. It consists of four blocks: goals, ideas, step-projects, and tasks.

ICE Scoring

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The ICE Scoring Model is an agile methodology that prioritizes features using data according to three components: impact, confidence, and ease of implementation. The ICE Scoring Model was initially created by author and growth expert Sean Ellis to help companies expand. Today, the model is broadly used to prioritize projects, features, initiatives, and rollouts. It is ideally suited for early-stage product development where there is a continuous flow of ideas and momentum must be maintained.

Innovation Funnel

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An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.

Innovation Matrix

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According to how well defined is the problem and how well defined the domain, we have four main types of innovations: basic research (problem and domain or not well defined); breakthrough innovation (domain is not well defined, the problem is well defined); sustaining innovation (both problem and domain are well defined); and disruptive innovation (domain is well defined, the problem is not well defined).

Innovation Theory

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The innovation loop is a methodology/framework derived from the Bell Labs, which produced innovation at scale throughout the 20th century. They learned how to leverage a hybrid innovation management model based on science, invention, engineering, and manufacturing at scale. By leveraging individual genius, creativity, and small/large groups.

Lean vs. Agile

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Lean Startup

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A startup company is a high-tech business that tries to build a scalable business model in tech-driven industries. A startup company usually follows a lean methodology, where continuous innovation, driven by built-in viral loops is the rule. Thus, driving growth and building network effects as a consequence of this strategy.

Minimum Viable Product

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As pointed out by Eric Ries, a minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort through a cycle of build, measure, learn; that is the foundation of the lean startup methodology.

Leaner MVP

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A leaner MVP is the evolution of the MPV approach. Where the market risk is validated before anything else

Kanban

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Kanban is a lean manufacturing framework first developed by Toyota in the late 1940s. The Kanban framework is a means of visualizing work as it moves through identifying potential bottlenecks. It does that through a process called just-in-time (JIT) manufacturing to optimize engineering processes, speed up manufacturing products, and improve the go-to-market strategy.

Jidoka

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Jidoka was first used in 1896 by Sakichi Toyoda, who invented a textile loom that would stop automatically when it encountered a defective thread. Jidoka is a Japanese term used in lean manufacturing. The term describes a scenario where machines cease operating without human intervention when a problem or defect is discovered.

PDCA Cycle

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The PDCA (Plan-Do-Check-Act) cycle was first proposed by American physicist and engineer Walter A. Shewhart in the 1920s. The PDCA cycle is a continuous process and product improvement method and an essential component of the lean manufacturing philosophy.

Rational Unified Process

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Rational unified process (RUP) is an agile software development methodology that breaks the project life cycle down into four distinct phases.

Rapid Application Development

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RAD was first introduced by author and consultant James Martin in 1991. Martin recognized and then took advantage of the endless malleability of software in designing development models. Rapid Application Development (RAD) is a methodology focusing on delivering rapidly through continuous feedback and frequent iterations.

Retrospective Analysis

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Retrospective analyses are held after a project to determine what worked well and what did not. They are also conducted at the end of an iteration in Agile project management. Agile practitioners call these meetings retrospectives or retros. They are an effective way to check the pulse of a project team, reflect on the work performed to date, and reach a consensus on how to tackle the next sprint cycle. These are the five stages of a retrospective analysis for effective Agile project management: set the stage, gather the data, generate insights, decide on the next steps, and close the retrospective.

Scaled Agile

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Scaled Agile Lean Development (ScALeD) helps businesses discover a balanced approach to agile transition and scaling questions. The ScALed approach helps businesses successfully respond to change. Inspired by a combination of lean and agile values, ScALed is practitioner-based and can be completed through various agile frameworks and practices.

SMED

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The SMED (single minute exchange of die) method is a lean production framework to reduce waste and increase production efficiency. The SMED method is a framework for reducing the time associated with completing an equipment changeover.

Spotify Model

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The Spotify Model is an autonomous approach to scaling agile, focusing on culture communication, accountability, and quality. The Spotify model was first recognized in 2012 after Henrik Kniberg, and Anders Ivarsson released a white paper detailing how streaming company Spotify approached agility. Therefore, the Spotify model represents an evolution of agile.

Test-Driven Development

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As the name suggests, TDD is a test-driven technique for delivering high-quality software rapidly and sustainably. It is an iterative approach based on the idea that a failing test should be written before any code for a feature or function is written. Test-Driven Development (TDD) is an approach to software development that relies on very short development cycles.

Timeboxing

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Timeboxing is a simple yet powerful time-management technique for improving productivity. Timeboxing describes the process of proactively scheduling a block of time to spend on a task in the future. It was first described by author James Martin in a book about agile software development.

Scrum

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Scrum is a methodology co-created by Ken Schwaber and Jeff Sutherland for effective team collaboration on complex products. Scrum was primarily thought for software development projects to deliver new software capability every 2-4 weeks. It is a sub-group of agile also used in project management to improve startups’ productivity.

Scrumban

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Scrumban is a project management framework that is a hybrid of two popular agile methodologies: Scrum and Kanban. Scrumban is a popular approach to helping businesses focus on the right strategic tasks while simultaneously strengthening their processes.

Scrum Anti-Patterns

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Scrum anti-patterns describe any attractive, easy-to-implement solution that ultimately makes a problem worse. Therefore, these are the practice not to follow to prevent issues from emerging. Some classic examples of scrum anti-patterns comprise absent product owners, pre-assigned tickets (making individuals work in isolation), and discounting retrospectives (where review meetings are not useful to really make improvements).

Scrum At Scale

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Scrum at Scale (Scrum@Scale) is a framework that Scrum teams use to address complex problems and deliver high-value products. Scrum at Scale was created through a joint venture between the Scrum Alliance and Scrum Inc. The joint venture was overseen by Jeff Sutherland, a co-creator of Scrum and one of the principal authors of the Agile Manifesto.

Six Sigma

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Six Sigma is a data-driven approach and methodology for eliminating errors or defects in a product, service, or process. Six Sigma was developed by Motorola as a management approach based on quality fundamentals in the early 1980s. A decade later, it was popularized by General Electric who estimated that the methodology saved them $12 billion in the first five years of operation.

Stretch Objectives

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Stretch objectives describe any task an agile team plans to complete without expressly committing to do so. Teams incorporate stretch objectives during a Sprint or Program Increment (PI) as part of Scaled Agile. They are used when the agile team is unsure of its capacity to attain an objective. Therefore, stretch objectives are instead outcomes that, while extremely desirable, are not the difference between the success or failure of each sprint.

Toyota Production System

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The Toyota Production System (TPS) is an early form of lean manufacturing created by auto-manufacturer Toyota. Created by the Toyota Motor Corporation in the 1940s and 50s, the Toyota Production System seeks to manufacture vehicles ordered by customers most quickly and efficiently possible.

Total Quality Management

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The Total Quality Management (TQM) framework is a technique based on the premise that employees continuously work on their ability to provide value to customers. Importantly, the word “total” means that all employees are involved in the process – regardless of whether they work in development, production, or fulfillment.

Waterfall

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The waterfall model was first described by Herbert D. Benington in 1956 during a presentation about the software used in radar imaging during the Cold War. Since there were no knowledge-based, creative software development strategies at the time, the waterfall method became standard practice. The waterfall model is a linear and sequential project management framework. 

Read Also: Continuous Innovation, Agile Methodology, Lean Startup, Business Model Innovation, Project Management.

Read Next: Agile Methodology, Lean Methodology, Agile Project Management, Scrum, Kanban, Six Sigma.

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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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