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Unpacking story points: 5 reasons to use them today

You might have heard about story points, a concept gaining popularity these days in the Agile world. They're becoming an indispensable tool for many teams working on project estimation. But what exactly are story points and how can they benefit your team?
In this post, we'll explore what story points are and why they might be a valuable addition to your Agile toolkit. It's not just another buzzword, it's a practical approach that could revolutionize your team's work estimation.

Unraveling the Concept of Story Points

Story points are a unique way to estimate work, and they're not simply about the time it takes to complete a task. They consider three vital aspects - time, complexity, and uncertainty. Think about it this way - if you've ever set a personal goal, like losing those last 2kg, you'll understand how overly optimistic we can be when estimating timeframes. It's no different in a work setting, especially when we try to break down larger projects into smaller tasks - an approach that isn't always time-efficient.
In Agile, our focus extends beyond deadlines and schedules. We value customer satisfaction, and aim to ensure everyone involved understands the scope of work. We want to facilitate open discussions about each work item's value and priority, rather than drafting intricate Gantt charts.
So, how do we achieve this? Enter relative estimation. This method allows us to compare different work items and categorize them into 'buckets' such as small, medium, and large. As you might expect, the larger the work item, the more uncertainty surrounding its size.
To make these 'buckets' tangible, we attach a number to each, using the Fibonacci sequence (1, 2, 3, 5, 8, 13, 21, 34, 55...). But why Fibonacci? This sequence reflects our increasing uncertainty with larger tasks - while we can precisely estimate smaller tasks (hence the small gaps in the early sequence), the size of larger tasks can vary significantly. To simplify, we usually use a modified scale: 1, 2, 3, 5, 8, 13, 20, 40, 100.
Remember, these numbers are not hours, difficulty points, or anything else. They're simply labels for our 'buckets'. All 'small' items might fit into buckets 1, 2, or 3, 'medium' items in 5 or 8, and 'big' ones in 13, 20, 40, and 100, depending on their relative size. The beauty of story points lies in this flexible yet structured approach to work estimation.
So what are the benefits of using story points?

Benefit #1: Facilitating Meaningful Conversations

The primary benefit of using story points is the meaningful conversations they inspire. When a team estimates work in story points (estimation process is a topic for another blog post), discrepancies in numbers can indicate a lack of agreement on the scope of work. If one person estimates 13, another says 3, and the rest of the team is leaning towards 5, it's a clear sign that a discussion is necessary.
Story points serve as catalysts to address underlying issues that might be lurking beneath the surface. These could be poorly written user stories, communication gaps within the team, or an absence of clear Definition of Ready and Definition of Done.
In my experience, when working with a team that's grappling with numerous challenges, introducing story points early on can be incredibly beneficial. It helps to uncover these hidden issues and guide the team towards more constructive solutions.

Benefit #2: Considering More Than Just Time

Story points take a holistic approach to estimation by factoring in more than just time. They consider the complexity of the task and the level of uncertainty associated with it.
For simple tasks such as painting a wall, you can easily estimate the time required based on past experiences. However, as complexity increases, our ability to accurately determine the task size diminishes. The same is true for tasks with a high degree of uncertainty or unknown elements.
If you're dealing with tasks that have dependencies, story points can also help account for these additional variables, as they inherently contribute to the overall uncertainty.

Benefit #3: Assignee-Independent Estimation

A unique aspect of using story points is that they don't factor in who will do the work. This allows teams to estimate tasks without having to pre-assign them.
In a software development team, for instance, what takes a senior engineer two hours might take a junior engineer two days. But with story points, we don't account for these individual differences. Instead, we measure the work item itself, comparing it to other items.
Over time, we track the overall team velocity – how many story points the team completes in a given period. This approach averages out individual disparities, reflecting the team's overall capacity and performance.
Not having to pre-assign tasks saves time and offers more flexibility. Team members can choose what they want to work on, and anyone is available to pick up an urgent work item when needed. It encourages a collaborative environment where the focus is on the work itself, rather than who's doing it.

Benefit #4: Avoiding Overemphasis on Details

Using story points also helps teams avoid the trap of getting too caught up in the details. The scale for larger work items is intentionally broad to reduce the need for precision. If exactness is required, the team can always invest time in breaking down the item into smaller tasks. However, in most scenarios, this level of detail isn't necessary.
Even when estimating small items, the team is encouraged to make quick decisions – is it a 1, 2, or 3? When in doubt, the team leans towards a higher number. This approach acknowledges and embraces the reality that our estimations will never be 100% accurate, and that's not our primary goal.
By focusing on aligning the scope and actually doing the work, teams can alleviate unnecessary stress and improve efficiency. It's about making smart estimations, not perfect ones, and using story points facilitates this mindset.

Benefit #5: Projecting Timelines and Estimating Large Tasks

While Agile encourages flexibility over rigid work plans and deadlines, there are times when estimating larger bodies of work and projecting timelines is necessary. This is another area where story points shine.
By estimating the story points for each work item in a large project and dividing by the team's average velocity (how many story points the team typically completes in a given time period), you can make a fairly accurate projection.
For instance, if your team's velocity is 40 story points per week, and a new project is estimated to be 220 story points, you can anticipate that it will take the team roughly six weeks to complete, given that they focus solely on this project. Of course, it's wise to add a buffer for unexpected delays or 'surprises', so an estimate of 6-8 weeks might be more realistic.
Story points provide a simple and effective way to make these large-scale estimations, again emphasizing their value in a well-functioning Agile environment.
In conclusion, story points estimation is one of the most impactful tools in my Agile Coach toolkit. It's simple to adopt, intuitive to use, and it's usually a lot of fun for the team! Beyond that, it's a problem-solving powerhouse that can enhance transparency, improve communication, align understanding about scope, and enable more accurate predictions. Try it out with your team and you will not regret it!
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