Software Project Estimation Part 7: Story Points

This post is part of my series on Software Project Estimation:

Story Point Estimation is the most popular form of estimation on projects using Agile methodologies. Using this technique, you begin with all of the User Stories, or Use Cases, for the project. Then a number is assigned to each of those stories to indicate their relative size. Normally, this number is from the Fibonacci sequence (1, 2, 3, 5, 8, 13, etc.) or a power of 2 (2, 4, 6, 8, 16, etc.).

When the numbers are first assigned, they are not given a unit of measure. That is, a User Story that is assigned a “2” does not necessarily take 2 hours or 2 days to complete. The numbers are assigned based on the estimated size relationship between the User Stories. That is, if User Story 1 is assigned a “2”, and the team decides that User Story 2 is around 50% larger that User Story 1, User Story 2 will be assigned a “3”.

Once all of the User Stories have been assigned a number, the team will decide what they thing their starting velocity will be. They may decide that they can complete work on 20 Story Points per 2 week iteration. The User Stories to be completed during the first iteration will be determined based on this Velocity. Project Management can also use this velocity to project when the entire project will be completed.

After each iteration, the actual velocity will be computed to determine if the number of Story Points per iteration needs to be adjusted up or down. Based on this adjusted velocity, management can determine if they need to push out the end date of the project or remove User Stories from the scope.

Story Points is a great estimation technique to use in Agile development where you aren’t expect an precise estimate.  It gives you a tool to measure how the work is progressing and to project when the work will be complete.

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