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What is Agile Estimation?

Agile estimates are never easy. When starting out on any project, it’s important to have an idea of the overall budget and time schedule, in order to plan the project well and ensure successful completion on time and within budget. But in the case of Agile projects, with requirements or scope that are still evolving, this always poses a challenge.This is where Agile estimation techniques assume importance. In this blog, we introduce you to the concept of Agile estimation. You will understand what the most popular techniques are and learn how to create accurate estimates using story points. Let’s get started!  Agile Estimation DefinedIn software development, an “estimate,” in the usual sense, consists of a quantified evaluation of the effort necessary to carry out a given development task; this is most often expressed in terms of duration.- Agile Alliance Agile estimation evaluates the effort taken to complete tasks in the product backlog. This estimation factors in not only the volume of work, but also the relative complexity of tasks, the risk involved and the uncertainty around it.Why Agile Estimation is ImportantAgile teams that have not done their homework properly are likely to over-estimate or under-estimate, and this inevitably leads to cost and time overruns. An oft-quoted example is that of the construction of the Sydney Opera House. While it is initially estimated with a 4-year timeline and a budget of AUD$7 million, it actually took 14 years and cost AUD$102 million.  Talk about wildly inaccurate planning! The end result, of course, was well worth the wait. But this may not be the case for your project, which underlines the need for creating Agile estimates! Some of the significant benefits of Agile estimation include: There is increased accountability among team members who have participated in the estimation process. As they have come up with the estimates themselves, they are more likely to stick to them. It becomes easier to make informed decisions during sprint planning, as developers become aware of their capacity of completing user stories within a sprint. More accurate budget allocation and timeline scheduling is enabled, preventing cost and time overruns. There is vastly improved risk management. The Product Owner can better coordinate tasks with dependencies, as work can be prioritized so that the tasks which depend on each other can get completed at the same time or in the required order. Short Discovery Phase in Agile EstimationAgile methodology uses the technique of iterative development, breaking down the tasks into short time-boxed schedules, and using feedback from stakeholders to drive the progress. This can cause more uncertainty, as the development could take on unexpected directions as the project unfolds.How, then, can the cost be estimated, and the schedules planned? This is where the ‘Short Discovery Phase’ proves useful. It takes between 2 and 4 weeks, depending on the complexity of the project. The following phases are involved: Stakeholder Interviews: All stakeholders are interviewed, either in person or over a call, by the Business Analyst (BA) to elicit details on the requirements. These requirements are then outlined in the Business Requirements Document, which lists the project goals, and the Functional requirements Document, which lists the features needed. High-Level Backlog:  The BA and the Technical architect sit together to frame a high-level Product Backlog that sketches out the skeleton of the product.  Client and Customer Personas: It is very important to understand the end users, and this is done with the help of the UX designer who maps out the personas of the user group. Ecosystem mapping is carried out, and after understanding the personas, user journeys and storyboards are created. Ordering the Requirements: Once the requirements are validated by the stakeholders, the discovery team works on the high-level backlog and orders the items, deciding what goes on top priority and what can be taken up later. Detailing the MVP:The Minimum Viable Backlog (MVP) is created, with the features that the product must have to ensure that it stays competitive and offers end user value. Estimating the Cost and Timeline: The MVP backlog is estimated, to create a high-level project cost and schedule the first release.Best Methods for Estimating Software ProjectSource: QuoteAgile projects typically use story point estimation, measuring the different user stories based on the relative volume, complexity, risk and uncertainty of the work involved. Some of the most popular Agile estimation techniques are listed below: Planning Poker: This consensus-based technique uses a set of Planning Poker cards with story point values assigned to them. Team members pick a card value which they believe is appropriate to the story under discussion, and this process undergoes several iterations while they discuss the reasons behind their thinking on the same. When all members arrive at a consensus on the story value, it is taken as the final estimate. T-Shirt Sizing: Is a method of creating quick high-level estimates, based on the T-shirt sizes S, M, L, XL and so on. Dot Voting: Team members are assigned a number of dots which represent votes on the size of the story. More dots correspond to a bigger task or higher priority, and fewer dots means smaller tasks or lower priority. Bucket System:This system uses buckets of different sizes to judge the relative sizing of the tasks. Affinity Mapping: In this technique, the team arranges stories in an ascending order horizontally, till all team members are satisfied with the ordering. Successful Story Point Estimation in Agile, in StepsStory point estimation is the most popular approach to generate an accurate Agile estimate. These are the steps that are followed: Use One Base Story as ReferenceA simple user story that can be understood by everyone is used as the base or reference story and can be assigned a story point value of 1. All other stories are sized based on a comparison of effort, time and complexity with respect to this story. Flesh Out the Requirements of the StoryThe Product Owner or a business analyst will lead a discussion, answer questions and clear the doubts of the team members, and explain the referred story in-depth. Create an Estimation Matrix An estimation matrix is a numeric scale, most usually the Fibonacci sequence (…5, 8, 13, 21, 34 …) or a linear scale (… 3, 4, 5, 6, 7 that is used to evaluate and estimate the user stories. Choose an Agile Estimation TechniqueThis can be Planning Poker, T-shirt sizing, Bucket system, or whatever works best for your team. Sprint Planning:The number of stories that can be completed within a sprint are pulled into the sprint backlog, and the sprint planning is carried out by assigning these stories to team members. Validating the Accuracy of EstimatesAs the sprints progress, you will be able to judge whether the initial story point estimates were accurate or not. These estimates can be fine-tuned based on the team’s actual capacity and velocity.Wrap Up While many people feel the importance of Agile estimates is overrated, this is far from the truth. Without proper planning and scheduling, it is very easy for the project to go off track, with respect to cost or timelines, or both—and this can make the entire product strategy go haywire.  Estimation is an art that is acquired over time and with practice. A team that has worked together over successive sprints will be in a good position to arrive at near-accurate estimates. The better and more accurate the estimation and planning, the higher will be the chances of achieving project success! 
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What is Agile Estimation?

Susan May
Blog
03rd Sep, 2021
What is Agile Estimation?

Agile estimates are never easy. When starting out on any project, it’s important to have an idea of the overall budget and time schedule, in order to plan the project well and ensure successful completion on time and within budget. But in the case of Agile projects, with requirements or scope that are still evolving, this always poses a challenge.



This is where Agile estimation techniques assume importance. In this blog, we introduce you to the concept of Agile estimation. You will understand what the most popular techniques are and learn how to create accurate estimates using story points. Let’s get started!  

Agile Estimation Defined

In software development, an “estimate,” in the usual sense, consists of a quantified evaluation of the effort necessary to carry out a given development task; this is most often expressed in terms of duration.- Agile Alliance 

Agile estimation evaluates the effort taken to complete tasks in the product backlog. This estimation factors in not only the volume of work, but also the relative complexity of tasks, the risk involved and the uncertainty around it.

Why Agile Estimation is Important

Agile teams that have not done their homework properly are likely to over-estimate or under-estimate, and this inevitably leads to cost and time overruns. An oft-quoted example is that of the construction of the Sydney Opera House. While it is initially estimated with a 4-year timeline and a budget of AUD$7 million, it actually took 14 years and cost AUD$102 million.  Talk about wildly inaccurate planning! The end result, of course, was well worth the wait. But this may not be the case for your project, which underlines the need for creating Agile estimates! 

Some of the significant benefits of Agile estimation include: 

  • There is increased accountability among team members who have participated in the estimation process. As they have come up with the estimates themselves, they are more likely to stick to them. 
  • It becomes easier to make informed decisions during sprint planning, as developers become aware of their capacity of completing user stories within a sprint. 
  • More accurate budget allocation and timeline scheduling is enabled, preventing cost and time overruns. 
  • There is vastly improved risk management. 
  • The Product Owner can better coordinate tasks with dependencies, as work can be prioritized so that the tasks which depend on each other can get completed at the same time or in the required order. 

Short Discovery Phase in Agile Estimation

Agile methodology uses the technique of iterative development, breaking down the tasks into short time-boxed schedules, and using feedback from stakeholders to drive the progress. This can cause more uncertainty, as the development could take on unexpected directions as the project unfolds.

How, then, can the cost be estimated, and the schedules planned? This is where the ‘Short Discovery Phase’ proves useful. It takes between 2 and 4 weeks, depending on the complexity of the project. The following phases are involved: 

  • Stakeholder Interviews: 

All stakeholders are interviewed, either in person or over a call, by the Business Analyst (BA) to elicit details on the requirements. These requirements are then outlined in the Business Requirements Document, which lists the project goals, and the Functional requirements Document, which lists the features needed. 

  • High-Level Backlog:  

The BA and the Technical architect sit together to frame a high-level Product Backlog that sketches out the skeleton of the product.  

  • Client and Customer Personas: 

It is very important to understand the end users, and this is done with the help of the UX designer who maps out the personas of the user group. Ecosystem mapping is carried out, and after understanding the personas, user journeys and storyboards are created. 

  • Ordering the Requirements: 

Once the requirements are validated by the stakeholders, the discovery team works on the high-level backlog and orders the items, deciding what goes on top priority and what can be taken up later. 

  • Detailing the MVP:

The Minimum Viable Backlog (MVP) is created, with the features that the product must have to ensure that it stays competitive and offers end user value. 

  • Estimating the Cost and Timeline: 

The MVP backlog is estimated, to create a high-level project cost and schedule the first release.

Best Methods for Estimating Software Project

Source: Quote

Agile projects typically use story point estimation, measuring the different user stories based on the relative volume, complexity, risk and uncertainty of the work involved. 

Some of the most popular Agile estimation techniques are listed below: 

  • Planning Poker: 

This consensus-based technique uses a set of Planning Poker cards with story point values assigned to them. Team members pick a card value which they believe is appropriate to the story under discussion, and this process undergoes several iterations while they discuss the reasons behind their thinking on the same. When all members arrive at a consensus on the story value, it is taken as the final estimate. 

  • T-Shirt Sizing: 

Is a method of creating quick high-level estimates, based on the T-shirt sizes S, M, L, XL and so on. 

  • Dot Voting: 

Team members are assigned a number of dots which represent votes on the size of the story. More dots correspond to a bigger task or higher priority, and fewer dots means smaller tasks or lower priority. 

  • Bucket System:

This system uses buckets of different sizes to judge the relative sizing of the tasks. 

  • Affinity Mapping: 

In this technique, the team arranges stories in an ascending order horizontally, till all team members are satisfied with the ordering. 

Successful Story Point Estimation in Agile, in Steps


Story point estimation is the most popular approach to generate an accurate Agile estimate. These are the steps that are followed: 

  1. Use One Base Story as Reference

A simple user story that can be understood by everyone is used as the base or reference story and can be assigned a story point value of 1. All other stories are sized based on a comparison of effort, time and complexity with respect to this story. 

  1. Flesh Out the Requirements of the Story

The Product Owner or a business analyst will lead a discussion, answer questions and clear the doubts of the team members, and explain the referred story in-depth. 

  1. Create an Estimation Matrix 

An estimation matrix is a numeric scale, most usually the Fibonacci sequence (…5, 8, 13, 21, 34 …) or a linear scale (… 3, 4, 5, 6, 7 that is used to evaluate and estimate the user stories. 

  1. Choose an Agile Estimation Technique

This can be Planning Poker, T-shirt sizing, Bucket system, or whatever works best for your team. 

  1. Sprint Planning:

The number of stories that can be completed within a sprint are pulled into the sprint backlog, and the sprint planning is carried out by assigning these stories to team members. 

  1. Validating the Accuracy of Estimates

As the sprints progress, you will be able to judge whether the initial story point estimates were accurate or not. These estimates can be fine-tuned based on the team’s actual capacity and velocity.

Wrap Up 

While many people feel the importance of Agile estimates is overrated, this is far from the truth. Without proper planning and scheduling, it is very easy for the project to go off track, with respect to cost or timelines, or both—and this can make the entire product strategy go haywire.  

Estimation is an art that is acquired over time and with practice. A team that has worked together over successive sprints will be in a good position to arrive at near-accurate estimates. The better and more accurate the estimation and planning, the higher will be the chances of achieving project success! 

Susan

Susan May

Writer, Developer, Explorer

Susan is a gamer, internet scholar and an entrepreneur, specialising in Big Data, Hadoop, Web Development and many other technologies. She is the author of several articles published on Zeolearn and KnowledgeHut blogs. She has gained a lot of experience by working as a freelancer and is now working as a trainer. As a developer, she has spoken at various international tech conferences around the globe about Big Data.


Website : https://www.zeolearn.com

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