How To Calculate Velocity In Scrum? And Enhance Your Scrum Performance

As a scrum master, have you ever felt like your Scrum team is driving blindly regarding planning and forecasting? You're not alone. 

Many teams struggle to accurately predict how much work they can complete in an upcoming sprint. That's where velocity comes in - a powerful metric that can supercharge your team's ability to plan, forecast, and ultimately deliver more value.

Here are some eye-opening facts about velocity that might surprise you:

🚀 Velocity has nothing to do with hours or days - measured in abstract "story points."

💯 It only counts work that was completed and potentially shippable

⏫ A team's velocity is expected to vary from sprint to sprint, especially early on

📈 High-performing teams can stabilize and even improve their velocity over time

What exactly is this mysterious velocity metric, and why should you care? 

In this blog, we will explore velocity in the scrum and how you can improve the performance of the scrum team. 

What is Velocity in Scrum?

In Scrum, velocity is a key metric that measures a team's rate of progress and capacity for completing work over a given period of time, typically a sprint.

Velocity is calculated by summing up the story points or size estimates associated with the user stories (requirements) that were successfully completed and deemed potentially shippable during a sprint.

For example, if a team completed stories worth 20, 15, and 8 story points in a sprint, their velocity for that sprint would be 20 + 15 + 8 = 43 story points.

Some key points about velocity in Scrum:

1. It is measured in relative units like story points, not absolute units like hours or days.

2. It only includes fully completed work that meets the team's "definition of done."

3. Velocity provides insight into how much work a team can realistically deliver in a sprint, which aids in planning and forecasting.

4. A team's velocity is expected to fluctuate from sprint to sprint, especially early on, as they find their stride and cadence.

5. Over time, high-performing teams are able to stabilize their velocity and even improve it through continuous process refinement.

Tracking velocity sprint-over-sprint allows teams to identify factors that caused dips or spikes in their productivity, revealing opportunities for process improvement. 

However, it's important not to equate velocity with the goal itself – the aim is to deliver high-quality, valuable increments in a sustainable manner.

Velocity In Scrum - How to Calculate it?

Calculating velocity in Scrum is a fundamental aspect of the framework's iterative approach to project management. However, it's essential to note that velocity is not a measure of productivity or individual performance but a team's collective capacity to deliver work within a given timeframe. Let’s see how we can calculate velocity.

1. Prepare for a Sprint

Before commencing a sprint, delineate and assign point values to all user stories in the product backlog. For instance:

Allocate points to tasks such as user authentication, payment gateway integration, search functionality, user profile page development, email notifications implementation, database query optimization, and admin dashboard creation.

The team should commit to accomplishing user stories in the upcoming sprint based on factors like the average velocity from previous sprints, as well as considerations such as holidays or external dependencies. 

For instance, if the average velocity is 15 points and there are no holidays or external dependencies, the team could undertake user stories totaling approximately 15 points for the next sprint.

2. Document Completed User Stories

At the conclusion of each sprint, compile a list of all fully completed user stories. These stories should have satisfied their acceptance criteria and received approval from the Scrum Master and Product Owner.

If a user story is not entirely complete, with only 90% of the work done, it should be deferred to the next sprint, and points should be reassessed based on remaining tasks.

3. Review Point Assignments

The team should have previously allocated story points to each completed user story. If there's any need to reevaluate story points, this is the appropriate time to do so.

For example, suppose the team completed three user stories in the current sprint—user authentication, payment gateway integration, and search functionality. The respective story points could be:

- User authentication: 5 points

- Payment gateway integration: 8 points

- Search functionality: 3 points

4. Total Points to Determine Velocity

Sum up the story points for all completed user stories to ascertain the sprint velocity. 

In the given scenario, the total would be 5 points + 8 points + 3 points = 16 points. Therefore, the velocity for this sprint would be 16 points.

5. Calculate Average Velocity

Calculate the average velocity over the number of completed sprints for a more reliable measure in subsequent sprints. This practice is particularly beneficial for newly formed teams or those experiencing changes in size or structure.

For instance, if the velocities for the last three sprints were 14, 16, and 15, the average velocity would be (14 + 16 + 15) / 3 = 15 points.

How Velocity Enhances Scrum Performance?

1. Realistic Sprint Planning: By tracking historical velocity, teams can gain insights into their past performance and use this data to inform realistic Sprint planning. This prevents overcommitment or undercommitment, ensuring the team takes on a manageable workload and maintains a sustainable pace.

2. Capacity Awareness: Velocity helps teams understand their true capacity, considering factors such as team size, skill sets, and external dependencies. This awareness empowers teams to make informed decisions about the scope of work they can realistically accomplish, preventing burnout and promoting a healthy work-life balance.

3. Continuous Improvement: By consistently tracking and analyzing velocity, teams can identify trends and patterns in their performance. This data-driven approach allows teams to pinpoint areas for improvement, such as addressing impediments, refining estimation techniques, or optimizing processes, ultimately leading to increased efficiency and productivity.

4. Stakeholder Alignment: Velocity gives stakeholders a tangible measure of the team's progress and output. This transparency helps manage expectations, facilitate effective communication, and align priorities, fostering a collaborative and productive working environment.

5. Predictability and Risk Mitigation: By leveraging historical velocity data, teams can make more accurate predictions about future deliverables and timelines. This predictability enables proactive risk management, allowing teams to anticipate potential roadblocks and implement mitigation strategies before they become critical issues.

Conclusion 

Embracing velocity as a core metric in your Scrum practice can have a profound impact on your team's performance. It provides a data-driven foundation for informed decision-making, continuous improvement, and effective collaboration. By unlocking the power of velocity, you can empower your team to consistently deliver high-quality products, foster a culture of transparency, and ultimately drive sustainable success in your software development endeavors.