Story points are assigned to user stories or backlog items, which are small, manageable pieces of work that the team commits to completing within a sprint. Each story point represents a relative measure of complexity and effort required to complete a user story, rather than an absolute measure of time.
As there is variations in the velocity of a team, we often calculate the average velocity that can be used for planning and forecasting
How to calculate average velocity in Scrum?
First, each user story must be assigned a number of story points. This is an abstract measure of effort needed to implement any given user story. Estimation improves as a project progresses and as teams are able to provide feedback on the difficulty of what they work on.
To calculate average Scrum velocity, each user story needs to be assigned a number of story points. Once that is done you can follow these simple steps:
- First determine the total number of story points completed by the team during the sprint.
- Then add up the total number of story points completed by the team in the past sprints.
- Divide the total number of story points by the number of completed sprints. For example, if a team completes 20 story points in Sprint 1, 30 story points in Sprint 2, and 25 story points in Sprint 3, its average velocity would be (20 + 30 + 25) / 3 = 25 story points per sprint.
The average velocity is not precise, it is often evaluated together with the 90% confidence interval. You find the 90% confidence interval by identifying the second lowest velocity and the second highest velocity in the series of the latest eight sprints.
Note that Scrum velocity is not an absolute measure of performance, and it should not be used to compare teams or team members. Instead, it is a tool for the team to plan and forecast the amount of work they can realistically accomplish in future sprints. It’s important to regularly review and adjust the velocity as the team progresses and gains more experience working together.
Why is Velocity important?
Velocity is an important metric in Scrum for several reasons. Here is some of the most important once:
Helps in forecasting
Velocity provides the team and stakeholders with a reliable estimate of how much work the team can realistically complete in a sprint, based on their historical performance. This helps with sprint planning and release planning, which are critical components of Scrum.
Helps in prioritisation
The Product Owner can use the team’s velocity to prioritise the product backlog items based on their estimated story points. This ensures that the team focuses on delivering the most valuable features or user stories first, based on their capacity.
Velocity is a visible metric that provides insight into the team’s performance, progress, and capacity. It helps to identify potential problems or bottlenecks early, so that the team can take corrective action and continuously improve.
Facilitates continuous improvement
By tracking velocity over time, the team can identify trends and patterns that indicate areas for improvement. For example, if the velocity decreases over several sprints, it may indicate that the team is facing obstacles or challenges that need to be addressed.
In summary, velocity is a useful metric in Scrum that helps the team and stakeholders to plan, prioritise, and improve their work processes. However, it is important to remember that velocity is not a measure of individual performance, and it should be used as a tool for the team to continuously improve their performance and delivery.