Adaptive estimating and velocity

Adaptive estimating sizes work by comparison rather than by duration. An item is judged against other items already sized, the team assigns it a number on a relative scale, and how long that number takes is discovered by observation rather than declared in advance.

The reason for the indirection is that people are unreliable at absolute duration and quite good at comparison. Asked how long a task takes, an estimator produces a number shaped by optimism and by what they think the answer should be. Asked whether this task is bigger than that one, the same person is consistent. Relative sizing uses the judgement that works and measures the part that does not.

What a size is made of

A relative size folds together volume of work, complexity and uncertainty. Two items can share a size for different reasons, one being a large amount of straightforward work and the other a small amount of work nobody has done before.

Scales are usually nonlinear, so the gaps widen as the numbers grow. That is deliberate. The difference between an item sized two and one sized three is meaningful, and the difference between forty and forty five is invented precision on work nobody understands yet. A widening scale forces the estimator to say roughly how big rather than exactly how big, which is all the information that exists at that point.

Sizing belongs to the people who will do the work. An estimate produced by somebody else is a target wearing the vocabulary of an estimate, and it carries none of the knowledge that made the technique worth using.

Techniques worth recognising

TechniqueHow it worksWhat it is good for
Planning pokerEveryone estimates privately, all reveal at once, differences are discussed before re estimatingSurfacing hidden disagreement, since two people with the same number for different reasons is the risk it catches
Affinity groupingItems are sorted into piles of similar size, quickly, then the piles are given valuesA large backlog being sized for the first time, where relative order matters more than precision
Shirt sizesSmall, medium, large, extra large, converted to numbers later or not at allEarly portfolio level work, and audiences who read numbers as commitments
Comparison to a referenceEach item is compared to one agreed item of known sizeKeeping a scale stable over months, since drift is the main way a scale stops meaning anything
Counting itemsNo sizing at all, forecast from the number of items finished per cycleTeams whose items are broken down to a similar size anyway, where sizing adds ceremony without adding accuracy

Counting items deserves more attention than it usually gets. Where a team already splits work until each piece is small, the number of items finished per cycle forecasts about as well as the sum of their sizes, and the sizing session was overhead. The exam does not require this position, but it does test whether you understand that the framework asks for a size and not for a particular way of arriving at one.

Velocity, capacity and the difference

Velocity is the amount of work a team actually completed in a cycle, measured in that team's own units. It is observed after the fact.

Capacity is how much the team expects to be able to take on in the next cycle, adjusted for what is known about it. A cycle containing two public holidays and a training day has less capacity than the last one, and the adjustment is arithmetic rather than judgement.

TermDefinitionWhat it answers
VelocitySizes of items completed in a cycleHow fast has this team actually been
Average velocityMean over several recent cyclesWhat is a reasonable central expectation
Velocity rangeLowest and highest of recent cyclesHow much does this team vary, which is what a forecast needs
CapacityAvailable effort for the coming cycleHow much should be planned this time

A single cycle's velocity is nearly useless on its own. Three or more gives a range, and the range is what makes a forecast honest, because the spread is the part that determines whether a date is safe.

Forecasting a date

Take the backlog remaining, in sizes. Divide by velocity. That gives cycles remaining, and multiplying by cycle length gives a date.

Doing it once with the average produces a single date and a false impression. Doing it three times, with the lowest recent velocity, the average and the highest, produces a range that can be reported with the confidence it deserves.

InputCalculationWhat the answer says
Remaining size divided by pessimistic velocity240 divided by 20, giving 12 cyclesThe date this is unlikely to slip past
Remaining size divided by average velocity240 divided by 30, giving 8 cyclesThe date to plan around
Remaining size divided by optimistic velocity240 divided by 40, giving 6 cyclesThe date this could reach if nothing goes wrong, which is not a date to promise

Two assumptions sit under all three and both need stating when the forecast is reported. The backlog is assumed not to grow, which it will, and the team is assumed to stay the same, which it may not. A forecast that names its assumptions can be corrected when they break. One that arrives as a date gets treated as a commitment and then defended.

Why the number must not leave the team

Velocity is denominated in units the team invented. It has no meaning outside that team, and it responds instantly to being used as a target.

A team measured on velocity will produce more velocity, by sizing more generously, by splitting items to inflate the count, or by finishing work to a lower standard. None of those deliver anything more, and all of them destroy the forecasting value of the number, which was the only reason to collect it. This is the most reliably examined point on the topic, because it is the one practitioners get wrong in real organisations.

Common misconceptions

Velocity measures how productive a team is.

It is a unit local to one team, derived from that team's own sizing. A team can double the number by sizing more generously without delivering anything more, which is what happens whenever the number is used to compare teams or to set targets.

Relative sizing is a less accurate substitute for estimating in hours.

It is answering a different question. People are poor at absolute duration and reliable at comparison, so sizing by comparison and converting through observed rate uses the judgement humans are good at and measures the rest.

A forecast from velocity is a commitment for the date it names.

It is a projection from a sample, and it should be given as a range with a confidence attached. A single date extracted from an average discards the variation that made the average worth calculating.

Where this is examined
PMP
Process, 41 per cent of the exam.
Related material
Book
Agile Estimating and Planning, The full treatment of relative sizing, velocity and release forecasting.
Book
Actionable Agile Metrics for Predictability, On forecasting from historical distribution rather than from an average.
Book
How Big Things Get Done, On reference class forecasting, and why comparison to past work beats reasoning from the current plan.
Template
Release forecast, Remaining size against pessimistic, expected and optimistic velocity, producing a range of weeks rather than a date, with rows that price scope growth and a smaller team.
Concepts