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6 benefits of doing work estimation

In previous posts, I’ve dissected why time-based estimation falls short ( 6 reasons why time-based estimation does not work), and championed the use of story points as a superior tool for estimation (Unpacking Story Points: 5 Reasons to Use them Today), guiding you on how to initiate their use within your team (Story Points 101: Your Guide to Getting Started). But why emphasize estimation in the first place, and how do you encourage your team to adopt this practice? Today, let’s delve into the undeniable benefits of work estimation in Agile.

Benefit #1: Sparking Important Discussions

Estimation does more than just assign a value to a task; it acts as a catalyst for essential team discussions. When teams come together to estimate tasks, conversations naturally flow around the work’s scope, possible implementation strategies, and its overall feasibility. This collaborative approach ensures that everyone is on the same page, sharing insights and contributing to a collective understanding of the task at hand. It’s vital to cultivate an environment where everyone feels safe and valued in sharing their opinions. Utilizing a voting approach to estimation fosters this, allowing each team member, irrespective of seniority, to voice their thoughts and opinions openly, enriching the discussion and contributing to more accurate and informed estimations. This not only enhances the estimation process but also fosters team cohesion and a shared sense of purpose and direction.

Benefit #2: Breaking silos

When a team operates in silos, with everyone immersed in their own tasks, it hinders collective success. Estimation serves as a powerful tool to dismantle these silos, fostering a collaborative environment. When a team comes together for estimation, even if members are working on individual tasks, it encourages the sharing of work, explanations, and the answering of queries. Initially, this might seem artificial, especially when estimating unfamiliar tasks. However, it compels team members to engage deeply, understanding each other's work. This mutual understanding and communication spur meaningful questions, constructive feedback, shared insights, and offers of assistance. It nurtures a team’s growth towards a more collaborative and successful unit, marking the initial steps towards establishing a robust and effective team.

Benefit #3: Guiding Resource Allocation

In Agile, the objective isn't merely about keeping everyone occupied; it's about optimizing outcomes for both the business and the customer. Without the practice of work estimation, there's a tendency to overload schedules with tasks that seem crucial without a real understanding of the workload they entail.
As previously discussed while exploring story points, humans inherently struggle with accurately estimating work, especially when it comes to larger tasks. Agile estimation doesn’t seek perfection but aims to garner a general understanding of the workload size, helping in preventing overly optimistic planning which often leads to an unrealistic accumulation of tasks.
Estimation acts as a reality check, allowing for a more practical understanding and planning of the workload. It aids in more strategic resource allocation, ensuring tasks align well with available resources, enhancing the overall efficiency and outcome of the team's efforts.

Benefit #4: Enhanced Prioritization

In Agile, prioritization is essential, and there are a lot of different prioritization frameworks out there - a subject I’ve delved into previously (Agile Prioritization Mastery: Learn the Top 4 Techniques!). Many prioritization frameworks fundamentally lean on a couple of pivotal criteria: the value delivered to the customer or business, and the effort or work required to complete tasks.
Consider this: You have two items on your to-do list, both offering identical value to the customer. However, one task, let’s call it item A, is considerably more substantial, requiring triple the effort compared to the other, item B. Which one would you tackle first?
The practice of estimation nudges you towards starting with item B, the smaller task. Why? Because it allows for quicker delivery, ushering immediate value to the customer and enabling you to gather feedback sooner. This initial feedback could be instrumental, potentially influencing and improving the approach towards completing item A. On the contrary, diving into the larger task first leaves the customer waiting longer for value, while also delaying the reception of valuable feedback. It simplifies the prioritization process, ensuring that value is delivered swiftly and improvements are continuously integrated.

Benefit #5: Understanding Team Velocity for Improved Planning

Team velocity in Agile is a measure of the work completed by a team in a specific timeframe, typically represented in story points. It’s different from traditional project management metrics, like man-hours. For example, instead of saying a five-person team has a capacity of 200 man-hours per week, in Agile, we might consider how many story points a team can accomplish per week.
This metric is beneficial for planning and forecasting, allowing teams to predict the time required to complete larger tasks or projects. However, it's essential to exercise caution when utilizing team velocity as a measure.
Misusing velocity, such as pressuring teams to continuously increase their velocity, can lead to unintended consequences like overworking, burnout, or even manipulation of estimations. For instance, inflating the estimate of a work item from 5 to 20 story points artificially boosts velocity but doesn’t reflect actual progress. Comparing teams solely based on velocity is also problematic, as teams might have varied baselines and estimation practices, leading to frustration and misguided competition.
Remember, while velocity is a valuable tool for understanding and planning work, it should be used judiciously to maintain a focus on genuine progress and meaningful outcomes, rather than merely numerical achievements.

Benefit #6: Managing Dependencies Effectively

Dependencies management is a crucial aspect that intersects with prioritization and resources management in project planning. Particularly when your team collaborates closely with other teams, or your project relies on external vendors, having at least rough estimates is vital to ensure timely delivery and prevent blockages.
Estimations play a pivotal role in managing dependencies, but they should be complemented by broader planning tools like roadmaps, timelines, or milestone mappings, tailored to your product team’s needs. However, a word of caution: while detailed scheduling might seem like a pathway to precision, it often leads to wasted time due to the inherent unpredictability and imprecision in work estimations and the unforeseeable challenges that might emerge.
Aim for a balance—strive for a level of detail in your scheduling that is sufficient to navigate dependencies effectively without getting bogged down by over-specification and constant adjustments. This approach fosters a smoother, more adaptable project flow, helping teams to navigate dependencies with agility and foresight.
Estimation in Agile offers many benefits, helping teams tackle various challenges. Its main advantage is creating a shared understanding of the work, its size, and importance, rather than just setting strict deadlines. When bringing estimation into a team, it’s important to explain its value and purpose, ensuring everyone understands why it’s helpful, rather than just making it a requirement. This way, the team can better adapt to using estimation as a useful tool in their Agile process.