Agile Estimation Explained with Examples

Editorial Team

Agile Estimation

Agile estimations are simply approximations for any particular project at hand. It means that the team inspects each element of a project, estimates the hours or days required to complete, then uses this information to develop a schedule for a project. Why would a team need Agile estimation?

This article offers meaningful information on agile estimation and planning, techniques, and agile estimation story points. After studying this article, you will be full of knowledge and apply any agile estimation technique to ensure your project’s success.

Agile Estimation and Planning

Agile estimate is the calculated value for how much effort a project requires. An agile estimate’s primary aim is for a project to be as useful and accurate as possible. This means that padding or being optimistic on an estimate is counterproductive.

If a large mismatch between a schedule and an estimate occurs, it’s an indication of a risk that has to be addressed. It’s good to identify mismatch as early as possible so that the team leaders can take action as early as possible. Producing good estimates (good estimates are the ones that are useful to a project plan, including relaying accurate information about the uncertainty) is crucial to effective project planning.

A key concern in agile estimation is to separate the estimation size and the measuring of velocity. In separating these concerns, the developer may achieve an unbiased view of the size of a project and assess the ability to achieve commitments or a schedule.

Planning for an agile project should happen for at least two distinct levels: release and iteration.

Agile estimation and planning are important as they provide insights into the risks involved in the project. By constantly reassessing, the team members gain more knowledge, through the project they reduce the uncertainties involved over time.

Reliable estimates lead to an excellent delivery, which establishes trust between developers and management. Estimating supports decision-making as they provide insights into the costs and schedule of a proposed project.

Agile Estimation Story Point

A story point refers to a metric used in agile project development and management to estimate the difficulty of implementing a given story. In other words, a story point is a number that tells the team about the difficulty level of the story. A team relates difficulty to complexities, risks, and efforts put in place.

Story point estimation is a type of relative estimation. It is typically performed at the Product Backlog Grooming Session (PBGS). PBGS is a regular session where product managers, product owners, and the rest of the team discuss, review and prioritize backlog items. The team responsible for the actual development and testing work evaluates the product backlog.

The team members make rough estimations called Product Backlog Estimation before the sprint planning to make it more efficient in practice. When the development team conducts an estimation, they abandon the traditional “human day” assessment method.

To conduct a story, point agile estimation, each time finds a baseline story. Everyone in the team has to resonate with the story. Once the team determines the story, the stories are compared against the baseline. When estimating a new story, the team picks a story, and check if the story takes longer than reference story A, or if it’s less than reference B. With enough reference stories, the team uses a suitable comparator to find a story with similar size and give it the same points or a bit more or a bit less based on a chosen factor.

While estimating story points, the team assigns a point value to each story. Relative values are more important than raw values. A story assigned 2 story points is twice as much as a story assigned 1 story point. It’s also two-third of a story that is estimated at 3 points.

Moreover, it is important to note that when a single-story point of the assessment is greater than 21, the user story has to be split again. The single user story point, which isn’t more than 8, is the most suitable rational state.

6 Agile Estimation Techniques

Agile estimation techniques use a “top down” method. This motivates teams to propose a gross-level estimation for the time the project should last. This is then divided and applied to different elements of the project. Team members drill farther into those elements, uncovering more and more details. Below are six techniques that teams commonly use in agile estimation.

  • Planning Poker

Planning poker is an agile estimation technique that makes story points to estimate the difficulty of a task at hand. In planning poker, the team members sit together and estimate the process. The team leader then reads out the user story (which is essentially the project) and describes all the requirements and features.

The team leader reading out the story, engages in discussion with the team members, who are estimating the story and discussing with one another. In this phase, they ask the customer or owner questions for clarification and express any reservations they have.

At the end of the discussion, all of the estimators select a card with a story point they believe needs assigning to the project. However, if the cards don’t match up, then the estimators who gave the lowest and highest points, can voice their reasoning, and more discussion takes place until they reach a consensus.

However, planning poker techniques aren’t good for large teams or when there are a large number of items that need estimation. This technique is only suitable for small teammates. It’s also one of the most popular estimation techniques.

  • The Bucket System

In the bucket system technique, the team members place different values on the table. All the placements are called buckets. The values are usually 0,1,2,3,4,5,13,20,30,50,100 and 200 although they can be expanded if necessary.

The estimators collect stories and collectively choose the bucket each item falls into. They do this by placing the cards with the items written on them into buckets. Before placing each item, the estimators discuss each item’s features and requirements with the team members. The estimators assign and place the items in the bucket upon consensus.

The estimator changes and rearranges the buckets if the group feels it is necessary to reassign them. There is a divide and conquer after phase and reassigning important items. Estimators take the remaining item and place them in the buckets they believe the items should sit in.

In case a participant doesn’t understand a story, it is transferred to someone who does. If the person disagrees with a certain item placed in a specific bucket, the team engages in further discussions until they reach an agreement.

The bucket system method is more time-efficient and reasonable than planning poker. It’s a great agile estimation technique to use in the case of many items and a big team.

  • T-Shirt Sizes

The T-shirt sizes technique uses t-shirt sizes as a story point for the sizes of the project. It’s a useful way of thinking when estimation needs to occur. The sizes of T-Shirts used are the extra small (XS), medium(M), Small(S), and extra-large (XL).

This is a beneficial method since it’s time-efficient. The sizes are converted to numbers at a later stage. That is after the team assigns a relative size to the project on hand. The team decides after a discussion and collaborative effort to understand everything that needs to be done. Additionally, if the estimator proposes sizes that do not match up, the team voices their opinions on the topic, and they eventually reach an agreement.

T-Shirt Sizes is a pretty informal method that is great to use for a large number of items. However, the story points can be complex. What might seem one size to one person can be perceived as another by someone else. This can therefore create confusion. This technique is based on open discussion, and everyone gets the chance to have their say

  • Large/uncertain/small

Large/uncertain/small technique is like bucketing. However, in this case, there are only three possible values to assign. The team leader discusses with the members on the suitable value. They then divide the values. Before diving, every team member has to conquer the decision. Thereafter the team leader adds the tasks to get large, small, or uncertain groups.

  • Dot Voting

Dot voting enables estimators and team members to sort items from highest to lowest priority. To do this, the estimator selects the most important user stories. They start by posting all the stories they need on a wall somewhere. The posts contain the story description and are unique so that they are easily distinguishable by the voters.

The team members who participate in the process are all given 4 to 5 dots to dole out. The use of stickers or markers is also effective for this process. Team members place the dots on the user stories that they prefer to start working on and distribute them throughout the options.

A leader then arranges the stories from the most relevant to the least relevant. (relevant stories have most marks or dots on them). The team leader divides the item into three groups (high, middle, and low priority). If any stakeholder isn’t happy with the results. The team members then vote on the high-priority stories again until they reach an agreement.

The dot voting technique is more of a decision-making tool than an agile estimation technique. It’s very efficient in the case of a small number of items. It also very simple and is a good visualization tool.

  • Affinity Mapping

 In affinity mapping, silent relative sizing has to occur. To do this, the team leader places two cards on the opposite side of a wall. One card reads small and the other large. The leader then provides each estimator with a subset of items and remains present during the process to clarify the doubts. The estimators then place the items on the wall relative to the perceived size of each item. The size depends on the effort expected to complete them. At this point, no discussion takes place.

Team members then change the location of wall items, discussing as they go. Once the teams finish editing the wall, they finalize product backlog items in their position. Before this, the product owner may step in if they spot a discrepancy between what the team members have estimated compared to their ideas.

Affinity mapping helps ensure that the finalized estimations are saved. It’s a good technique to use for smaller teams. However, it is unsuitable for a large number of backlog items, as its time consuming with many items.

Agile Estimation Tools

When a team, together with the team leader, conducts an estimate well. Then the projects are done on time, businesses are profitable, and team members are happier, because they have conquered their deadlines. There is an incredible number of agile estimation tool options.  This article provides a detailed review of some of the best agile project management tool:


One of the best agile estimation planning is a flexible tool that provides a structure that is easy to configure to suit teams working to agile, and various hybrid methodologies. It’s a great choice for teams that want a simple, unobstructed focus on the work they are doing.

  • Smart sheet

The smart sheet is an entire online project management suite. It offers some customized features for agile estimation teams. Smart sheets help developers organize projects, calendars, dashboards, forms, and portals from a unified control center. The smart sheet offers most of the integrations a team may need. The integrations include Microsoft, Google apps and development essentials like Jira, and useful business app like service now, Salesforce and Tableau.

  • Clarizen

Clarizen is an enterprise-grade professional service automation software solution. It’s designed to speed up the way a company conducts its business. It integrates work, content, and process tightly together to enable more efficient working. Clarizen’s real focus is to make a project happen faster with a time-saving workflow.


Agile estimation is important for every business. In agile estimation, it’s vital to define the estimation approach in a project’s context. Some projects may have very uncertain requirements and may be difficult to estimate. This, therefore, requires the team to have great knowledge of all the techniques and tools for handling the estimate. This article offers the solution as it focuses on all essential areas of agile estimation and planning.