A guide to Agile estimation techniques

agile estimation techniques

As a manager or business owner, being able to accurately estimate work is one of the more challenging parts of the job.

There’s the financial aspect, the projections for future quarters, and the need to properly allocate resources so teams are properly utilized.

All of that comes down to having the right estimation techniques.

When estimating is done well, projects are done on time, businesses are profitable, and team members are happier because their deadlines are attainable and their priorities are set.

agile estimation challenges

Why estimating Agile projects can be more challenging

Traditional project management methods look at estimating in terms of “bottom-up.” You spend time upfront making the schedule, planning out the tasks and deliverables, and then you break down each one and estimate hours and costs starting from the end.
From there, it’s up to you or the project manager to keep teams on track both in terms of deadlines that are already set, and hours allocated for each deliverable.
Agile project management, on the other hand, doesn’t quite work this way.
When you’re estimating Agile projects, you flip the order and use gross-level estimation. You’ll start with a broad estimate for different parts of the project, and then continually refine as more information is available.
traditional vs agile project management
Much like Agile planning, estimating happens continuously and gets more detailed as the project progresses.
Because it requires a different way of thinking, we’ve compiled the eight most common Agile estimation techniques so you can compare and see which one works best for your team.
how to estimate work in agile projects

The eight most common Agile estimation techniques

You’ll also want to gather some tools before you get started, including:
  • Pen and paper
  • Sticky notes
  • Clear wall space or table
  • Your list of items, user stories or tasks
If you’re using a work breakdown structure, you have that last bullet ready to go.
When it comes to deciding which technique to use, consider:
  • The number of items or tasks you have to estimate
  • The size of your team
  • Co-located or all in one office
  • Tools available to facilitate the process
  • Work style and personalities
You might also want to brush up on the Fibonacci sequence, as some techniques use these numbers or a modified version to help assign values to each task.
Now, let’s take a look at each technique for estimating work in agile projects.

1. Three-point estimate

The problem with committing to an estimate before any work begins is that they can be wildly inaccurate. Even if it’s the same team and the same type of work, estimates can be unrealistic. Especially if you fall into the trap of thinking, “We’ve done this before so we’ll be much faster the second time.”
That’s what makes three-point estimation so useful. You have three values: the most likely estimate, plus the optimistic, and pessimistic ones.
From there, you get the most accurate number by adding up the values and dividing by three.

2. Planning poker

Best for a small number of items, planning poker is a useful technique that gets unanimous buy-in quickly. Each team member gets a set of specially numbered cards, discusses the requirements for the item, and then submits their best estimate anonymously. Discussion happens until consensus is reached.
This approach is ideal for 10 or fewer tasks, and teams of up to eight people.

3. Affinity grouping

This estimation approach works by having team members group similar items. If tasks seem related in scope and effort, you put them together until you have a clear set of groups.
You can use the same set of values as other techniques (Fibonacci sequence), or make the groups more broad so it’s closer to the large, small, and uncertain method.

4. Random distribution

Also known as an ordering protocol, this technique places items in an order from low to high. Each person takes a turn, choosing either to move an item up or down one spot, discussing an item, or passing.
Your process is done once everyone passes on their turn.

5. T-shirt sizes (Estimation units)

XS, S, M, L, XL are the units you’ll use to estimate Agile projects for this technique. One of the reasons this approach is successful is because it’s a departure from standard units of time, and thus, can help teams think more critically.
Your estimation unit could be anything here, and thinking outside the box can help your team objectively compare items for better estimates.

6. Buckets

Similar to planning poker, the bucket technique aims for consensus through discussion, and by assigning values to each task. The facilitator starts with one task, sets it in the middle, and then continues to read and place tasks in buckets relative to the first one. The team can divide up tasks and bucket them, before coming back together and reviewing.
Discussion is key to make sure everyone agrees before the final estimates are set. You’ll also look to make sure tasks are evenly distributed and not, say, all under the 200 bucket.

7. Large, small, uncertain

Fast, simple, and productive, this technique is like bucketing but with only three possible values to assign. You’ll start out discussing, and then divide and conquer to get all the tasks added to the large, small, or uncertain groups.

8. Dot voting

This one is fairly simple: each person gets a number of dots and uses them to vote on which projects are big and small. More dots mean more time and effort is required. Fewer dots indicate a fairly straightforward and quick item.
Which one will you try first? If you prefer, you can use a different method at the start of any roadmap or quarter.
get started

How to get started

Using an Agile project management tool can give you a clear list of tasks for estimating.
Hubstaff Tasks helps you plan Epics with individual tasks that can be assigned to team members. Add due dates, comment on tasks and know where every item is at with Kanban-style project boards. From there, you can plan your Sprints so that the right work is made a priority for your team.
hubstaff tasks
It’s a simple, visual way to manage Agile projects.

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