Story points are a relative estimation technique used by many Agile teams to compare the size of Product Backlog items. Rather than estimating each item directly in labor hours or calendar days, the team evaluates work relative to other work it understands.
Story points are widely associated with Agile and Scrum, but they are not required by the Scrum Guide.
What do story points represent?
A team’s point estimate may reflect some combination of effort, technical complexity, uncertainty and risk.
The important concept is relativity. If one item is considered a 3 and another an 8, the team is expressing that the second appears materially larger or more difficult. The numbers do not inherently mean three hours and eight hours.
Why use relative estimation?
Early estimates often contain more uncertainty than precise hour estimates imply. Relative estimation allows teams to compare work without pretending to know exact durations prematurely.
Story points are team-specific
Point scales should not be casually compared across teams. Five points for one team are not necessarily equivalent to five points for another.
Teams may use different technical environments, reference items, completion standards and estimation practices.
Story points are not schedule durations
A scheduler should not convert one story point into a fixed number of working days and use that conversion to create CPM activities.
Calendar duration depends on capacity, dependencies, sequencing and parallel work. A relative estimate cannot replace schedule logic.
Story points and EVMS
Story points should also not automatically be treated as earned value units. EVMS requires authorized scope, budget and objective performance measurement.
Agile execution data can support status assessment, but the program must define how completed technical work translates into earned value.
Historical completed points are often used to calculate velocity. Continue with Agile Velocity Explained.