First of all, velocity is not just a number. It’s always a range, or an average with error margins. Why is this important? Because if you do your planning based on a single number, without taking into account the normal variation in productivity that is always there, you can be sure your planning is not giving you a realistic idea of what will be done when.
In other words: realise that your planning is an estimation of when you think a certain set of work can be done. An estimation should always include uncertainty. That uncertainty is, at least partially, made explicit by taking the variance of your velocity into account.
The simplest way to get pessimistic and optimistic values for velocity is to simply take the average of the three lowest and the three highest of the last ten sprints. Another way is to use a mathematical confidence level calculation. I don’t actually think there’s much difference between the two. Charting velocity in this way can get you graphs such as the one shown above.
I know I just talked about it not being an average, but this is different. Another way in which the averaging of points finished in a sprint can cause problems, is if it doesn’t actually mean ‘points finished in a sprint’. Quite often, I’ve met teams that have a lot of trouble finishing stories within their sprints. The causes of that can be many, with stories simply being too large on top. Sometimes these teams have correctly realised that if they’ve only finished part of a story, they don’t get partial ‘credit’ for this in the Sprint’s velocity. But then they do take credit of the full number of story-points for the entire story in the subsequent sprint, once they’ve actually finished the story.
So here we can see what happens then. The average is around 20. So should this team plan 20 story-point worth of work into their next sprint? Probably not a good idea, right? If the variation in velocity is very high, there is usually a problem.
What one could do in this instance is re-estimate any unfinished stories so that only the work actually done in the later sprint for those stories is calculated for those sprints. Yes, you’ll ‘lose’ some points that you estimated are don’t seem to count anywhere as work done. But you’ll immediately get a more realistic figure for your velocity, and an immediate reason to make those stories smaller, as they simply won’t fit in a sprint if the velocity is realistic.
For release planning, you’ll not be depending on a weird fluctuation of velocity any more, but on a more dependable figure with less variation.
Variable Sprint Length
If you change the length of your sprints around, velocity will not be very useful. But, I can hear you say, we can just calculate the expected velocity for a 2 week sprint by taking two-thirds of the velocity of a 3 week sprint! That would be nice, but unfortunately it doesn’t work like that. The regular rhythm of sprints creates certain expectations within the team. The team learns how much it can take in, in such a period. Also, the strict time-box of an agreed sprint length is very useful in bringing existing limitations into view.
The famous ‘lowering the waters brings the rocks to the surface’ picture of lean waste elimination is a useful way to view this.
If someone asks me how long I’m going to take to do a particular piece of work, I’ll normally answer saying it will take a certain amount of time. This is quite natural, and answers fairly directly the question posed. When someone asks me when I can have such a particular piece of work ready, again I could answer by giving a specific date and time.
If someone asks me how much work I can do in a work week, though, I might be tempted to answer: “40 hours”;. And I would probably be right! And if I would then, at the end of that week, look back, and see how much time did I actually work, it would probably not be too far off those 40 hours. But I wouldn’t learn much from that observation.
By using the concept of ‘Story Points’, an abstract measure for estimation, we can still estimate the effort for a certain piece of work. And if we then give other pieces of work an estimation in Story Points, relative to the story we already estimated, we have created a new measurement system! So for instance if ‘Allowing a user to log-in’ is 3 Story Points, then ‘sending a user a password reminder’ could be 5, if it’s about (but not quite) twice as big.
Of course, in the end you will want to relate those abstract Story Points back to time, since you will often want to determine when you can release a bit of software. But you don’t estimate that, you measure that: It turns out in on sprint, we can do about 12 Story Points, give or take a few. So if that’s the case, we will be able to release functionality X by at the latest, date Y (see the release planning graph earlier).
Some people do the same type of trick by using ‘ideal days’ to estimate, and determining the ‘focus factor’, or percentage they were actually managing to get done. Mathematically this works OK, but it’s very hard for people to let go of their feeling of ‘when it will be done’, and estimate is ‘real’ ideal days.
Including bug-fix time in your velocity
I’ve noticed that this one can be a bit controversial, but it’s an important factor in the usefulness of your velocity figure.
As a team, you will encounter work that is not part of creating new functionality from your product owners wishlist. Often, this work presents itself in the form of fixing defects found in your software. Most of the time, those defects exist in the software because in an earlier sprint some new functionality was added.
Now it can be that such a defect is discovered, and needs to be fixed right away, because it truly interferes with a customer’s use of your system. Those types of defect are usually not estimated, but certainly not taken into account when calculating your velocity for a certain sprint.
Other defects are less critical, and will/should be planned (prioritised by your Product Owner) to be taken into a sprint. Those types of defects sometimes are estimated, but still should not be taken into account when calculating your velocity!
Why not? Well, if you see the goal of your team as delivering new software for the Product Owner, then a defect is simply a way in which some work delivered was not completely done. Usually not done in the form of not sufficiently tested. Fixing such a defect is of course very important. But it is slowing you down from the primary goal of delivering new functionality! But adding the points for fixing the defect to your velocity would make it seem that you are not going any slower (maybe even faster!). So it would give a false impression of the speed in which you’re getting the work the Product Owner wants, done, and might skew release planning because of that.
Also, it would means that your improvements in quality, which you’ve been working so hard on, will not be visible in your velocity. Now, is that right?