Story Points in Agile: Mastering Project Narratives

Agile methodologies have revolutionised Software Development by bringing a new level of flexibility, collaboration, and efficiency in the process. Particularly, Story Points in Agile are units of measure used in the Agile Software Development process to estimate the relative effort needed to complete a user story. They are also part of the key principles of Agile where the focus is on simplifying tasks.

According to a survey by KPMG, at least 91 percent of organisations that participated have stated that it is a priority to adopt Agile in their operations. Thus, it’s crucial to understand Story Points to implement Agile effectively. In this blog, we will discuss the concept of Story Points in Agile methodology, why they are crucial for project planning and management, and how to effectively use them.

Table of Contents 

1) Story Points in Agile – An overview

2) Why should teams use Story Points in Agile?

3) Where do you use Story Points in Agile?

4) How is a Story Point estimated?

5) How do you calculate Story Points in Agile?

6) Story Points and planning poker

7) Learn from past estimates

8) Benefits of using Story Points in Agile

9) Limitations with using Story Points

10) Hours vs. Story Points

11) Conclusion

Story Points in Agile – An overview 

Story Points are units of measure used in the Agile Software Development process to estimate the relative effort needed to complete a user story or feature. They represent a combination of factors such as complexity, risk, and effort required to complete a project or task.

Now, the idea behind the usage of Story Points is to provide a more accurate and flexible estimation process that allows the development team to focus on delivering the maximum possible value to the end user instead of focusing on deadlines.  

The process of assigning Story Points involves the entire Agile team, including the Product Owner, the development team, and other internal and external stakeholders. The team collectively estimates the effort required for each Story, using a scale that can range from 0-10.

The development team may use techniques like Fist of Five or Planning Poker to arrive at a consensus on these Story Points.

Once they are assigned, the team can use this information to plan the Sprint and track progress, with the aim of delivering a shippable product or increment by the end of each Sprint. Story Points are not to be considered a measure of time, but a way to prioritize work based on the level of effort or value to the customer.

Why should teams use Story Points in Agile?

Development teams and Product Owners benefit from Story Points in Agile. Here are the various reasons why these two entities in the project lifecycle will reap the rewards of Story Points in the long run:

Better understanding of requirements

The team grasps their project requirements better, making their task easier to develop a solid strategy for the implementation of their project. Additionally, they will ensure to keep their planning process to a realistic level so that they have a higher probability of successfully finishing their increments.

Furthermore, the development team will also understand how much they need to plan in a project sprint which will enable their work to occur at a sustainable pace. The team can also create an estimate that is reasonable enough without the obligation to commit to a specific timeframe.

Enhancing the assessment process

Product Owners can use Story Points in Agile to improve their assessment of an item’s Return-On-Investment (ROI) or the value for money. They can also comprehend the technical risk that is associated with the items which are more over-sized. More importantly, the Story Points help them forecast the long-term delivery of the product better.

Team members must take care to avoid facing few common pitfalls while they utilise the Story Points in Agile, such as not assigning them to small-sized tasks which they can easily estimate in terms of time.

Additionally, the team must ensure to keep itself engaged with regular contribution from its members as the creation of Story Points is a team effort and not a one-person show. Moreover, they should remember not to average the Story Points, because they intend to measure the complete picture which entails risk, complexity and uncertainty.

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Where do you use Story Points in Agile?

The usage of the Story Points in an Agile Software Application Development process usually occurs during the product’s backlog grooming sessions. These sessions are conducted by the testing and development teams while they carry out the review of the product backlog.

It is vital that the individuals estimating the Story Points should also be the ones responsible for getting the work done. The Scrum Master and Product Owner of the team, and the Management or Engineering Leads are not to be involved unless they too are writing the code.

Since, there is a high chance that these professionals are not involved directly in the development process, they primarily make decisions about the relative difficulty of every Story Point.

Moreover, all members involved need to collaborate and resolve any misunderstandings if there are major differences between the estimated time for development and the Product Owner’s expected time.

Furthermore, the team members understand how to estimate the Story Points after their establishment and importance in the project’s lifecycle.

How is a Story Point estimated?

Estimating Story Points is a key part of Agile Software Development, allowing the development team to accurately plan and track progress towards delivering value to the customer. Here are the steps involved in estimating Story Points in Agile: 

a) Review the product backlog: Before estimating Story Points, the team needs to review the user stories and product backlog to ensure that everyone has an absolute understanding of what exactly needs to be done.  

b) Break down the story: The development team should break down user stories and product backlog items into smaller tasks or sub-tasks to get a better understanding. 

c) Determine complexity: The development team needs to assess the complexity of each sub-task, considering factors such skill level, effort, and technical challenges. 

d) Use a reference point: The development team can use a reference point, such as a previous project or task, to estimate the time and effort required to complete a Story Point. 

e) Assign a point value: Based on the complexity and resources needed for each sub-task, the team assigns a point value from 0-10 to each Story Point.  

f) Repeat the process: The team should repeat this process for each user story or item on the product backlog until they have assigned Story Points to all items on the list.  

Additionally, organisations use pre-defined techniques to better determine Story Points in Agile for a project. Some popular estimation techniques are as follows: 

1) Planning Poker: Planning Poker is a collaborative technique used to estimate the effort needed to complete a sprint or a user story. In this process involves all members of a team discussing and sharing their individual estimates in the form of Story Points, and then vote on their individual estimates to arrive on a consensus. If there are significant differences in the estimates, the team members discuss their reasoning and perform a re-vote until a consensus is reached.

2) Bucket system: The Bucket system is a technique used in Agile for estimating the effort required to complete tasks or create Story Points. It involves creating a set of “buckets”, each representing a range of Story Points. It helps simplify the estimation process and provides a generalised estimate. This process makes it easier for the development team to quickly assess the level of effort needed for each task. This system allows for easier prioritisation of sub-tasks in a project based on the bucket it which they are placed.  

3) Dot voting: Dot voting is a technique used to determine Story Points in Agile for a particular project based on a determined level of complexity or importance. This process involves members of the development team being given a set number of dots or markers, which they use to vote on items on the product backlog. The team members place their dots on the items they want to prioritise, and once they have all been cast, the items with the most votes are given priority and need to be focused on first.  

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How do you calculate Story Points in Agile?

The most accurate definition of Story Points is that they represent the efforts required to develop a user story or a product backlog item. Here, effort is basically a question of time, which entails the duration required to complete something.

Multiple factors are involved in the determination of effort, which includes the amount of work to be done, its complexity, and any possible risk or uncertainty while doing the work. Now when the team estimates the Story Points, they must factor in elements such as complexity, effort, volume and risk. These Story Points are ultimately an estimation of effort.

Here are the various factors described in further detail, as shown below:

The amount of work to do

The estimation of effort should increase in proportion to the amount of work. For example, consider a situation where two web pages need to be developed.  The first page has one field and a label asking the user to enter a name, and the second page has 100 fields which are to be also filled with some text.

Now the second page doesn’t have much complexity because there are no interactions among the fields. Each of these fields is not more than a little text and there is no additional risk on this page. The only contrast between the two pages is more work on the second page.

Risk and uncertainty

The Story Point estimate assigned to an item should be affected by the amount of risk and uncertainty in a product backlog item. Uncertainty must be reflected in the Story Point’s estimate if the team has to estimate the product backlog item. The lack of clarity in the stakeholder’s requirement is also factored in the situation.

Complexity

The provision of a Story Point estimate are also estimated by the level of complexity. Consider the example of a webpage with 100 fields, of which some are date fields, and some are formatted text fields like phone or Social Security numbers. These fields are typically difficult to implement because of their complexity and time-consuming efforts.

It may be deemed impossible for the team to combine the three factors and provide them as an estimate to planning their sprint. Effort is the unifying factor in this case. The Scrum members will consider the amount of effort required. Then the Agile team will consider the efforts needed to deal with the risk. Finally, the teams need to factor in the work’s complexity as it requires more thinking and trial-and-error and longer validation times.

Remember the definition of ‘done’

A team must always include the effort needed to create the automated tests, for the story validation, in the Story Point estimate. This inclusion makes up for the definition of done as the whole process of getting the product backlog item completed must be in the story point estimate.

Story Points and planning poker

Planning poker is an exercise conducted by teams that are starting out with Story Points. A team generally takes an item from the backlog, has a brief discussion and each member mentally formulates an estimate.

This is followed by all members holding up a card with the number reflecting their estimate. Now if the whole team is in an agreement, it’s a positive sign. Otherwise, they can take more time to understand the rationale behind the various estimates.

Learn from past estimates

The team can involve in retrospectives as a means to incorporate valuable insights from their past iterations, which includes the estimate accuracy. Various Agile tools such as Jira Software are designed to track story points, which eases the process of reflection and recalibration of estimates.

Benefits of using Story Points in Agile   

The use of Story Points offers several benefits in the Agile development process: 

a) Relative estimation: Story Points enable teams to estimate the size of a user story in relation to other stories. Instead of trying to estimate the exact time or effort required to complete a story, teams assign a point value to each story based on its complexity, uncertainty, and other related factors. This relative estimation allows teams to compare the size of user stories, prioritise them, and plan their work accordingly.  

b) Focus on collaboration: Story Points are typically assigned during collaborative estimation sessions, involving the entire development team and other stakeholders who want to get involved in the process. This process encourages debates, discussions, and alignment around the requirements and implementation details of the stories in the product backlog. This helps to ensure that every individual on the team has a shared understanding of what needs to be done and how to do it.  

c) Transparency: The use of Story Points provides transparency to the development process. The team’s progress can be tracked over time and can be used to predict how much work can be completed in each Sprint or release. Additionally, stakeholders can easily view the project’s progress by tracking the completion of user stories, rather than trying to understand technical details.  

d) Improved planning: Story Points allow teams to plan their work more effectively. By estimating the relative effort required for each story, teams can better understand the overall scope of a project and can identify potential risks or roadblocks before they arise. This enables the team to adjust the plan as necessary and ensure that everyone is working toward the same goals.  

e) Continuous improvement: The use of Story Points in Agile encourages continuous improvement. By tracking progress and estimating the size of stories, teams can learn from their mistakes and adjust their approach over time. This helps to improve the accuracy of future estimates and ultimately results in better-quality work.  

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Limitations with using Story Points
 

While Story Points have many benefits, they also have a few limitations that can affect their effectiveness. Here are a few examples: 

a) Subjectivity: The estimation of Story Points is inherently subjective, and different team members may assign different points to the same task based on their own understanding and perspective. This can often lead to inconsistencies and inaccuracies in estimation.  

b) Lack of transparency: Story Points don’t provide a clear explanation of what they represent, making it difficult for stakeholders who are not deeply involved in the process to understand what is being estimated. 

c) Inability to compare across teams: Since they are assigned relative to each other, Story Points cannot be used to compare across teams. This makes it difficult to track progress across multiple projects or teams.  

d) Time-based estimation: Story Points are often used as a proxy for time-based estimation, but factors like team capacity, resource availability, or external dependencies that can impact the actual time taken are not taken into consideration.  

e) Over-reliance on velocity: Teams can become overly focused on velocity, or the number of Story Points completed per iteration. With the focus on the potential deadline approaching, the quality of work being delivered can be affected.   

f) Lack of flexibility: In most organisations, Story Points are seen as fixed estimates. This can create rigidity in the development process and make it difficult to adjust estimates as new information becomes available.  

Hours vs. Story Points
 

Conclusion 

Summing up, Story Points in Agile are a valuable tool in Software Development that allows teams to estimate the effort required for a given task or feature. By using Story Points, teams can improve their accuracy in predicting how much work they can complete in each Sprint, leading to better planning and more realistic delivery timelines.  

While they are helpful as a guide, it is important to understand that they are not meant to be an exact measurement of time or effort. Instead, they should be viewed as a relative measure of complexity and uncertainty.  

Ultimately, using Story Points in Agile can lead to better communication and collaboration within the team and the stakeholders, leading to more successful software delivery.  

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