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How to Estimate Story Points in the Simplest and Easiest Way

Story points estimation is widely used among Scrum teams to estimate the product backlog items ahead of sprint planning to have a better view of the required efforts. Keep reading this article to learn how to estimate story points in the easiest way.
October 23 · 7 min read
Let's explore how to estimate  story points in the easiest way

In project management, planning before execution is key to timely delivery. Every project has some uncertainties and hurdles that the team does not realize until it either discusses them beforehand or faces them during project development. Therefore, it is highly recommended to properly scope and evaluate the project beforehand to avoid missed deadlines or project failure. This is very much acknowledged in the modern business world, as teams are actively shifting towards new project management tactics.

Scrum is one of the widely used Agile methodologies that make the teams focus on iterative-based, planned project management and completion. Scrum teams are known to conduct estimates of their product backlog beforehand to have a better picture of the overall required efforts. Story points help Scrum teams in estimating the required efforts relative to other user stories (or product backlog items) along with expected challenges. Since story points are a key to effective estimation, it's important that you have a solid grip on the concepts around story points, including how to estimate them in the simplest way. So, let's discuss everything around the story points in this article.

Story Points – A Quick Overview

As the name implies, story points include points that are the units of measure to reflect the estimated efforts required to complete a user story (or product backlog item). Scrum teams assign story points relative to the amount of work, complexity of work, and uncertainty/risk of work.

Story points estimation is conducted before sprint planning because it helps the team to understand how much work they can accomplish in the upcoming sprint. The teams assign story points to user stories considering the below 3 factors:

  • Complexity: What is the difficulty level of the work?
  • Experience: How much a team is experienced working on this type of user story.
  • Uncertainties: What are the expected uncertainties or hurdles that can arise?

Other than the above factors, story points also depend on relative estimation, i.e., the complexity of one user story is compared with the other one, and higher points are assigned to the one that is more complex.

How Story Points are used in Agile Projects?

Now that we know what story points are, it's important to also clarify our concepts on how story points are used in Agile projects. Below is a brief structure of how a Scrum team makes use of story points:

  1. A user story is written for every feature, bug fix, or other task expected from the team.
  2. User stories are added to the product backlog.
  3. Team members meet together to estimate and assign story points to user stories.
  4. The team picks a set of user stories for the next sprint considering their assigned story points to ensure that the team only picks the right amount of work they can cover in the next sprint.

This is how a team assigns story points and uses them during development. Overall, story points are the perfect measure of the expected efforts, eventually helping the team to keep the work within achievable boundaries.

How to Estimate Story Points?

There are multiple ways to estimate story points, but we will focus on the easiest, most popular, and most efficient estimation method, i.e., Planning Poker. Moreover, we will discuss all the stages associated with estimating story points from explaining story points to using them in sprint planning. So, follow the below steps to estimate story points effectively:

Step 1. Introduction to Story Points

If your team is doing story points estimates for the first time, then it is important that they have a clear picture of what story points are all about. For that, team members must be educated about what story points are, how to estimate the efforts relatively, the benefits of story points, and similar other information. If the team is already well aware of story points, then head to the next step.

Step 2. Finalize Story Point Sequence

Story points are numeric values, which means that you need to have a proper numeric sequence finalized to use as story points. The most popular sequence is the Fibonacci sequence in which every number is the sum of the previous two numbers, i.e., 0, 1, 2, 3, 5, 8, 13, and so on. Other than the Fibonacci sequence, you can use any other sequence or build a special one yourself.

Step 3. Conduct an Estimation Meeting

Once the story point sequence is finalized, the next and most important step is conducting an estimation meeting. In this meeting, the team uses the Planning Poker technique to estimate story points for the product backlog items. There are other estimation techniques as well, but Planning Poker is the most popular, easiest, and most efficient one. Estimation of story points with Planning Poker involves the following steps:

  1. Product owner, scrum master, development team, and key stakeholders (if any) joins the on-site estimation meeting. The development team is handed poker cards with values of story point sequence.
  2. The product owner takes one user story and reads it out to the development team.
  3. The team discusses the user story to see how to achieve the end results and also pinpoint any possible challenges.
  4. Once the discussion is completed, everyone picks the poker card. Afterward, everyone shows the card at once.
  5. If all members have shown the same card, then that is declared as the team's estimate for that story. However, if there is some deviation, then the team discusses it again and re-estimates until a consensus is reached.

The process continues until all user stories are estimated with story points. This way, Scrum teams can easily and effectively assign story points to user stories in a collaborating and unbiased environment.

Bonus Tip – Estimate Story Points for Remote or Busy Teams without On-site Estimation Session

If your Scrum team involves a few remote workers that are unable to join the on-site estimation session or if your members are busy with other activities, then you can still estimate story points effectively using "Asynchronous Planning Poker" or "Async Poker". In this technique, the user stories are sent to members, they read and understand them at their own pace whenever they get time, and send their story points estimates before the deadline. Afterward, the moderator gathers all the estimates and finalizes the team's estimates. If there are some variations in the estimates, then the moderator calls a quick remote session to discuss and re-estimate. This way, a Scrum team can still estimate story points effectively without having an on-site session.

Step 4. Plan and Execute Sprint

Once the story points are assigned, the next and last step is to conduct the sprint planning meeting to pick a list of user stories based on their story points that the team is confident to complete in this sprint. Once done, the team can start working on the sprint.

Story Points vs. Time-Based Estimates

After all the above discussion around story points, you might be thinking that why don't we just use time-based estimates? Time-based estimation is a common practice seen everywhere not just confined to project management. For example, when you have to travel to some other city, you will say something like it will take me around 2 hours to reach the destination. Similarly, time estimates are seen in dozens of other places.

Talking specifically to project management, time estimates fail to acknowledge the uncertainties or complexities in the project that the team might face suddenly during the development phase. For example, if the project involves contractors or other third parties, then delays can occur unknowingly. Therefore, if the team has estimated the product backlog based on time, then it will become challenging if the project doesn't meet the deadlines. Moreover, time-based estimates are also influenced by other factors, such as seniority, the proper understanding of the user story, experience, etc.

On the other hand, story point estimates are based on required efforts. The team is not forced to provide how much time it will take them to complete the work, rather the team tells that they require this much effort from their end to complete it. So, if some hurdles or issues come up during the development phase, the team has some time gap where they can address those issues without stressing themselves.

Benefits of using Story Points

Most of the Scrum teams are actively using story points in their estimation practices. Some of the key benefits of using story points are as follows:

  • Encourages Collaboration & Removes Biasness: Story points encourage the team to estimate user stories in a collaborative environment where the estimates of every team member are acknowledged. This reduces the preference given to the opinions of senior members.
  • Quick Estimates: Story points are based on relative estimates, which means you take into count the efforts of other similar stories. Therefore, the estimates become much faster with the passage of time.
  • Counts Risks and Uncertainties: Story points are the reflection of required efforts that also include the factors of risks and uncertainties.
  • Improves Estimates: The relative nature of story points makes the estimates better and more accurate with the passage of time. The team can learn from its past estimates and assign improved story points afterward.

To sum up, story points provide the most realistic estimates, thereby helping the team to have a well-prepared mindset beforehand.

Things to Avoid using Story Points

There is no doubt how story points can help Scrum teams make the right estimates of their product backlog items, but they can turn the opposite way if not used rightly. So, some of the things to avoid while using story points are as follows:

  • Don't Use Hours as Story Points: Story points should be based on numeric sequences that should not be based on hours or days.
  • Don't Use Non-Relative Story Points: Story points demand that they are set based on relative estimates. So, avoid assigning or using story points that are not relative.
  • Don't Take the Average for Assigning Story Points: If team members have assigned different story points on one single user story, then don't take an average of the points. The recommended approach is to do a team discussion to hear everyone's opinion and then re-estimate.
  • Don't Assign Story Points to Very Large Stories: If a user story is very large that none of the story points can justify the efforts, then the better approach should be to break down the story and then assign story points.

Other than the above factors, there could be other elements to consider specific to your team that the team can point out gradually as it gets more experienced with story points estimation.

Wrapping Up

Considering the fast-paced software development world, triggered by ever-increasing customer demands and a competitive business environment, software firms have to become more agile and responsive. Story point estimation is one of the many key practices that can help development teams address the pressure by doing accurate estimates and then ensuring timely and quality product deliveries. So, follow the above steps, customize them a bit as per your business model, and start doing estimates with story points.

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