What Are Story Points in Agile and How to Estimate Them Easily?

In the world of Agile project management, the primary purpose of story points is to estimate the overall effort required to implement a product backlog item or any other work. This goes beyond the traditional metrics of time and effort, taking into account the complexities and potential obstacles along the way.

If you want to explore the intricate process of estimating the story points and learning the nitty-gritty of this concept, then we suggest you stick with us until the end. 

In this blog, we will discuss the purpose & benefits of estimating story points, how to correctly estimate them, along with some real-life examples. 

What Are Story Points in Agile?

An Agile Story Point is a number that shows how much work a user story or task will take compared to other tasks or stories. It doesn't mean exact days or hours. Instead, story points show how hard, how much work, and how uncertain the task is.

Instead of saying "this will take 5 hours," teams say "this feels like a 3-pointer" to compare tasks. The numbers are relative, so a story with 5 points is greater or harder than one with 2 points, but not in terms of exact time.

This method helps groups:

• Instead of arguing over hours, focus on how hard it is.

• Plan your work more accurately without being too exact.

• Track velocity (how many points they finish each sprint) to make things more predictable.

For example:

• One point could be for a simple task.

• A medium task might be worth 3 points.

• A task that is hard or dangerous could be worth 8 points.

In brief, story points are a way for evaluating effort, not time. It helps Agile teams plan better and always deliver on time.

How to do Agile Story Points Estimation?

• 1

  Define your scale: The very first step is to estimate the story points is to define the scale your team will use. The most important thing that you must keep in mind is that the scale should be large enough to accommodate all the tasks, but not too large to create confusion or ambiguity. There is no universal scale for story points, but some common ones are the Fibonacci sequence (1, 2, 3, 5, 8, 13, etc.), the powers of two (1, 2, 4, 8, 16, etc.), or a simple linear scale (1, 2, 3, 4, 5, etc.). It is advisable to limit the scale to 10 or fewer values.

• 2

  Choose a reference task: The next step to follow is to choose a reference task that represents a baseline for your story points. The chosen task must be familiar to the team, has a clear scope and definition of done, that requires a moderate level of effort. It should be assigned a value on your scale, such as 2 or 3, and serve as a benchmark for comparing other tasks.

• 3

  Estimate other tasks relative to the reference task: The team should then compare the tasks in the backlog to the reference task to estimate it effectively. Suppose, if a task is 2X complex or time consuming of the reference task then it should be assigned twice as many story points. Similarly, if it is half as complex or time consuming than the reference task then it should be assigned half as many story points. 

• 4

  Use a consensus-based technique: It is recommended to use a consensus-based technique for estimating story points to ensure that everyone on the team has a voice and a chance to share their perspective. One popular technique is planning poker, where each team member privately selects a card with a story point value and reveals it simultaneously. 

Story Points vs. Hours in Agile

In Agile, story points are a way to figure out how much work it will take to finish a task or user story. Story points agile don't care about exact hours; they care about three things:

• How challenging the job is

• How hard will it be

• How risky or uncertain it could be

Teams break tasks down into smaller, more manageable parts by giving them points. This helps the team stay focused without getting stuck on specific deadlines and makes it simpler to plan what can easily be done in a sprint.

Why not just use hours now?

Because hours don't tell the whole story, two people might take a distinct amount of time to do the same thing because of how good they are at it or how much experience they have. Hours also make work too closely tied to set dates, which can lead to stress and unrealistic expectations.

Story points, on the opposite side, are measures that are relative. If one task seems twice as challenging as another, it gets twice the points, no matter how long it takes in hours. This keeps people from looking at the clock and instead focuses on value and effort.

To summarize the topic, story points vs. hours estimation hours are a way to measure time, and they can make deadlines feel more urgent.

Story points help teams focus on progress and value by measuring effort, taking away unnecessary stress, and encouraging them to do so.

That's why most Agile teams agree: story points do things that hours can't.

Story Points and Planning Poker

Planning Poker is a simple way for Agile teams to work together to figure out how long tasks will take. Everyone on the Scrum team is involved in the decision-making process, which makes it fair and collaborative.

Here's how it works: the team picks a task from the backlog and talks about it for a minute. Then, each person thinks about how much work it will take and picks a card with a number on it that shows how much they think it will take. Everyone's guess is shown at once, so no one can change theirs.

This method is quick and useful because it usually only takes a few minutes per task. It's okay if some tasks need a little more talking about. The goal is to come to a common understanding of the work before moving on.

Because it helps everyone on the team agree on estimates without one person's opinion taking over, Planning Poker is called a consensus-based approach. Because of this, the estimates are usually more accurate and fair.

Story Points vs. Time-Based Estimation

When teams plan work, they usually think in terms of hours or days. Agile uses story points instead. Both try to answer the same question: "How much work will this task take?" but they do it in very different ways.

Estimation Based on Time (Hours or Days):

• Estimates are created in exact amounts of time.

• For example, "This job will take 5 hours" or "We can finish this in 2 days."

• The problem is that time estimates often turn into deadlines, which makes things more stressful. They also change based on who is doing the job. For example, a senior developer might finish faster than a junior one.

Story Points (Effort in Relation to Other Things):

• Estimates are based on how much work, how hard it is, and how risky it is, not how many hours it will take.

• For instance, "This task feels like a 3-pointer because it's harder than a 1-pointer but easier than an 8-pointer."

• The advantage of points is that they compare tasks to each other and maintain focus on overall effort rather than exact timing.

Estimates are based on the amount of work, the difficulty, and the risk involved, rather than the number of hours it will take.

The main difference is

• Hours are spent trying to guess when something will be finished.

• Story points tell you how hard something is compared to other things you have to do.

Teams can still guess when things will happen without the stress of guessing based on time by keeping track of how many story points they finish in each sprint (called velocity).

Benefits of Using Agile Story Points

Story points quantify the efforts involved in completing a task, whether it is developing a feature, fixing, or updating an item, creating a better understanding of the full scope of the project.

Unlike traditional estimation methods, it doesn’t take into account the number of hours or days needed to perform a task. Instead, it highlights a detailed structure of a project framework, including the resources required, potential risks, and other relevant details.

This elaborative approach to estimation has a variety of benefits, including:

• Efficient Task Management: Every project is broken down into smaller tasks making it more manageable. The speciality of story points is that it encourages the project managers to take a closer look into each task. If in the process, the manager realizes that any unit of work requires too many points or has any potential risk then it is broken down further to achieve it efficiently.

• Better Understanding of Work Capacity: With the help of story points, the teams develop a better understanding of the work that is possible to complete in a sprint. It helps the teams avoid the risk of overcommitting by including tasks more than their actual capabilities in a sprint from the backlog. In short, story points provide a clear picture of the resources needed.

• Anticipating Challenges: Assigning the right number of story points requires evaluating each task before derailing a project. Since the story points focus on identifying possible complications that help in foreseeing challenges to avoid roadblocks. 

• Continuous Improvement: Estimates become more accurate over time. As the team works on more sprints, the more confident they become and it helps them measure their performance from the initial estimates and adjust the story points accordingly. Consequently, it helps to deliver more reliable results and improve their estimation skills.

Final Thoughts

Agile Story points are a powerful tool for agile teams to estimate the effort and time required to complete the tasks in the product backlog. It helps the team to break down the project into smaller and more manageable pieces. 

Also, it helps in gaining a better understanding of the scope of the project and its complexities to deliver more reliable and consistent results. 

Remember, estimating story points is a continuous process of evaluations, therefore, do not run after creating perfect estimates. Plan, execute, review, and improve.