Can We Trust Story Points as a Measure of Effort?

Many people worry that Story Points do not help us estimate effort. They are after “estimates” - how does that work? The reality is that point based estimates provide a more realistic view than time tracking systems.

It turns out that a story point view of estimated effort is highly correlated with actual work time. Agile practices help teams drive toward high correlation between estimated points and actual time. One goal of agile is to improve overall forecasting starting with the commitment made during sprint planning. Teams that embrace agile estimating principles examine their estimation points and outcomes, trying to ensure that their sprint forecasts are roughly met by the sprint result. If there is wide variation, teams would discuss improvements at a retrospective (see What Can We Do To Improve Our Point Based Estimates? for specific ideas on this).

In many ways the approach leads to better tracking of effort. When we track stories, estimation points and completion dates (sprint end dates), we know exactly which team did the work, we usually have a day-by-day task burndown and we have a proportional allocation (see How Do I Convert Points and Velocity to Dollars? for more information). The stories are well documented and understandable (thanks to the user voice form). Team members say the same thing executives say when asked about work as there is a common language and understanding. This means when someone sees something a report and want to ask more detailed questions, no matter where that query leads, there will be a common understanding.

Interestingly, if you do the analysis, and create frequency charts (e.g. How long does it take to complete a 2 point story) the data reflects this consistency. (A version of this kind of analysis can be seen at Our Estimates are Terrible!)

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how_do_i_convert_points_and_velocity_to_dollars, 2016/10/03 10:42 (Trackback)
How Do I Convert Points and Velocity to Dollars? Or “How do I figure out how much I've spent on something?” Or “Do we still need to track time in a time tracking system for progress reporting?” Premise One base idea with agile to focus on completion of work rather than the effort it takes to get the work done. So, for example, we track the remaining work on a story rather than the counting the number of hours we spent on a story. This makes sense because while the effort might be interesting…
Why Not Just Track Hours Like We Traditionally Do So what are the problems associated with using tracking hours? Some of the problems are: * With agile we only plan to 5 or 6 hours a day (or some other amount depending on what people end up doing). We could ask teams to record “everything” but that is an overhead (tasks for everything like doing email). This is the purview of a “time tracking” system. We could just multiple all numbers by 8/5 to get to something more real, but is this any be…
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