Audio Version:  Software Process and Measurement Cast 119.

Definition:

The simple definition of velocity, as it is currently used, is the amount of work that is completed in a period of time (typically a sprint). The definition is related to productivity which is the amount of effort required to complete a unit of work and delivery rate which measures the speed that work is completed.  The inclusion of a time box (the sprint) creates a fixed duration which transforms velocity into more of a productivity metric than a speed metric (how much work can be be done in a specific timescale by a specific team). Therefore to truly measure velocity you need to estimate the units of work completed, have a definition of complete and have a time box.

The definition of complete, in agile is typically functional code however I think the definition can be stretched to reflect the terminal deliverable the sprint team has committed to create and based on the definition of done (for example requirements for a sprint team working on requirements or completed test cases in a test sprint) that the team has established.

Many agile projects use the concept of story points as a metaphor for size or functional code. Note other functional size measures can be just as easily used. Examples in this paper will use story points as a unit of measure.  What is not size however is effort or duration. Effort is an input that is consumed while transforming ideas into functional code. The amount of effort required for the transformation is a reflection of size, complexity and other factors. Duration like effort is consumed by a sprint not created therefore does not measure what is delivered.

Formula

To calculate velocity, simply add up the size estimates of the features (user stories, requirements, backlog items, etc.) successfully delivered in an iteration.  The use of the size estimates allows the team to distinguish between items of differing levels of granularity.  Successfully delivered should equate to the definition of done.

Velocity = Story Points Completed Per Sprint

And:

Average velocity = Average Number of Story Points Per Sprint

The formula becomes more complex if staffing varies between sprints (and potentially less valuable as a predictive measure).  In order to account for variable staffing the velocity formula would have to be modified as follows:

velocity per person = sum (size of completed features in a sprint / number of people) / number of sprints or observations

To be really precise (not necessarily more accurate) we would have to understand the variability of the data as variability would help define level of confidence.  Variability generated by differences in team member capabilities is one of the reasons that predicability is enhanced by team stability. As you can see, the more complex the environmental scenario becomes, the less simple the math must be to describe the scenario.

Uses:

Velocity is used as a tool in project planning and reporting. Velocity is used in planning to predict how much work will be completed in a sprint and in reporting to communicate what has been done.

When used for planning and estimation the team’s velocity is used along with a prioritized set of granular features (e.g., user stories, backlog items, requirements, etc.) that have been sized or estimated.  The team uses these factors to select what can be done in the upcoming sprint. When the sprint is complete the results are used to update velocity for the next sprint. This is a top down estimation process using historical data.

Over a number of sprints velocity can be used both as a macro planning tool (when will will the project be done) and a reporting tool (we planned at this velocity and are delivering at this velocity).

Velocity can be used in all methodologies and because it is team specific, it is agnostic in terms of units of size.

Issues

As with all metrics, velocity has it’s share of issues.

The first is that there is an expectation of team stability inherent in the metric. Velocity is impacted by team size and composition and without collecting additional attributes and correlating these attributes to performance, change is not predictable (except by gut feel or Ouija Board). There should always be notes kept on team size and capability so that you can understand your data over time.

Similarly team dynamics change over time, sometimes radically. Radical changes in  team dynamics will affect velocity. Note shocks to any system of work are apt to create the same issue. Measurement personnel, SCRUM masters and team leaders need to be aware of people’s personalities and how they change over time.

The first time application of velocity requires either historical data of other similar teams and projects or an estimate. In a perfect world a few sprints would be executed and data gathered before expectations are set however generally clients want an idea of if a project will be completed, when it will be completed and the functions that will be delivered along the way.  Estimates of velocity based on the teams knowledge of the past or other crowd sourcing techniques are relatively safe starting points assuming continuos recalibration.

The final issue is the requirement for a good definition of done. Done is a concept that has been driven home in the agile community. To quote Mayank Gupta (http://www.scrumalliance.org/articles/106-definition-of-done-a-reference), “An explicit and concrete definition of done may seem small but it can be the most critical checkpoint of an agile project.”  A concrete definition of done provides the basis for estimating velocity by reducing variability based on features that are in different states of completion.  Done also focuses the team by providing a goal to pursue. Make sure you have a crisp definition of done and recognize how that definition can change from sprint to sprint.

Related Metrics:

Productivity (size / effort)

Delivery Rate (duration / size)

Criticisms:

The first criticism of velocity is that the metric is not comparable between teams and by Inference is not useful as a benchmark. Velocity was conceived as a tool for Scrum Masters and Team Leads to manage and plan individual sprints. There are no overarching set of rules for the metric to enforce standardization therefore one velocity is apt to reflect something different than the next. The criticism is correct but perhaps off the mark. As a team level tool velocity works because it is very easy to use and can be consistent, adding the complexity of standards and rules to make it more organizational will by definition reduce the simplicity and therefore the usefulness at the team level.

A second criticism is that estimates and budgets are typically set early in a projects life.  Team level velocity may well be an unknown until later.  The dichotomy between estimating and planning (or budgeting and estimating for that matter) is often overlooked.  Estimates developed early in a project or in projects with multiple teams require different techniques to generate. In large projects applying team level velocities requires using techniques more akin to portfolio management which add significant levels of overhead. I would suggest that velocity is more valuable as a team planning tool than as a budgeting or estimation tool at a macro level.

A final criticism is that backlog items may not be defined at consistent level of granularity therefore when applied, velocity may deliver inconsistent results. I tend to dismiss this criticism as it is true for any mechanism that relies on relative sizing. Team consistency will help reduce the variability in sizing however all teams should strive to break backlog items into as atomic stories as possible.