Mastering Agile Estimation: A Comprehensive Guide with Real-Life Examples

Accurate estimation is a critical part of the agile process, and it is essential for planning and delivering value to customers. In this article, we will take a deep dive into how to estimate the size of items in the product backlog, and we will provide a made-up business case to illustrate the key concepts and practices.

What is Product Backlog Estimation?

Product backlog estimation is the process of determining the size or complexity of items in the product backlog. Estimation helps teams to understand the scope of the work and to plan accordingly. It also helps to prioritize items in the backlog and to track progress toward project goals.

There are many different methods for estimating the size of items in the product backlog, and the most appropriate method will depend on the specific needs and goals of the project. Some common methods include story points, ideal days, and relative sizing.

How to Estimate the Size of Items in the Product Backlog

There are several steps that teams can follow to accurately estimate the size of items in the product backlog.

1. Gather the necessary information: It is important to gather all necessary information about the item before starting the estimation process. This could include details about the functionality, user requirements, dependencies, and any other relevant information.
2. Break down the item into smaller chunks: It is often easier to estimate the size of smaller chunks of work rather than trying to estimate the size of a large, complex item. The team should break down the item into smaller, more manageable chunks and estimate the size of each chunk separately. Real-Life Example: At DEF Inc., the development team breaks down large, complex items in the product backlog into smaller chunks before estimating the size. For example, if the item is a new checkout process for the company’s e-commerce platform, the team may break it down into smaller chunks such as designing the checkout page, implementing the payment gateway, and testing the checkout process. This makes it easier for the team to estimate the size of each chunk separately and to better understand the overall complexity and effort required for the item.
3. Use a relative sizing method: There are many different methods for estimating the size of items in the product backlog, and it is important to choose the most appropriate method for the project. One popular method is relative sizing, which uses a standardized scale to indicate the complexity and effort required for an item. Some common relative sizing methods include story points, t-shirt sizes (e.g. XS, S, M, L, XL), and ideal days. Real-Life Example: At DEF Inc., the development team uses story points to estimate the size of items in the product backlog. The team assigns story points to each item using a standardized scale (e.g. 1, 2, 3, 5, 8, 13), with higher numbers indicating more complex and effort-intensive items. The team discusses and reaches a consensus on the story points for each item, and they use these estimates to understand the scope of the work and to plan accordingly.
4. Consider the team’s capacity and availability: It is important to consider the team’s capacity and availability when estimating the size of items in the product backlog. The team should take into account the number of team members and their skill levels, as well as any other factors that may impact their ability to complete the work (e.g. vacation, training, etc.).
5. Review and revise the estimates as needed: It is important to review and revise the estimates as needed to ensure that they are accurate and realistic. The team should be prepared to adapt their estimates in response to changes or unexpected challenges that may arise.

In conclusion, effective estimation is a key factor in the success of any agile project. By accurately determining the size and complexity of items in the product backlog, teams can better understand the scope of the work and plan accordingly. Accurate estimation also helps teams to prioritize items in the backlog and track progress towards project goals.

If you want to learn more about agile and how to apply it in your own projects, we recommend checking out our articles “Agility in Startups: Tips, Resources, and Best Practices for CTOs, Project Managers, and Product Owners” and “Conducting a Successful Scrum Sprint Planning Meeting: A Step-by-Step Guide with Real-Life Examples.” These articles provide valuable tips, resources, and best practices for CTOs, project managers, and product owners looking to improve their agile skills and deliver successful projects. Thanks for reading!