Is Sprint — Velocity and Capacity Planning needed?

Yes! The more mature agile team will always be aware of their capacity and velocity during any phase of their project.

The benefits of measuring and using both the velocity and capacity metrics are often overlooked by teams when building products. Here is an effective guide to understanding velocity and capacity planning. Estimating and managing these metrics will allow the Agile team to better plan and commit to the work that needs to be done for a particular project.

Let us break down these basic definitions:

• Velocity is the measure of the amount of work a team can deliver across a given time period (Sprint).
• Capacity is an estimated amount of time available to a team within a given sprint.

Keep in mind this holistic picture as we break down (i) how to arrive at the velocity and capacity metric, (ii) how they relate to one another, and (iii) how the information derived thus far can be used to predict the future output.

Here is a step by step guide to implement Capacity and Velocity planning in your next project.

Working with Capacity Planning

Given that capacity planning focuses on the future estimate of the entire team’s availability to do work, it’s quite common for a team member to have a 40 hours work week. However, their time allocation can be split across multiple projects within the same period. It is most common for software teams to work on several projects given their specific skill set. An individual’s capacity is typically communicated in terms of percentage.

Example

Tom, a software Developer, is working on 4 projects. His capacity for your project is 25%. Therefore at a rough estimate, each project is entitled to 10 hours of Toms workload.

It’s very unlikely that Tom will be able to give 10 hours each week. The Team lead should consider other factors that will reduce Tom’s capacity for a particular week, such as company meetings, training, Adhoc Catch-ups, etc.

Now, let scale this example up to look at a full Agile team as illustrated in the table below:

Assumption:

• 40-hour workweek
• 2-week Sprint

The table above tells us how many available hours the team has to work within that particular sprint. It takes into account their allocations and any other activities that may affect their work. The total capacity for this specific sprint is 145 hours est.

Capacity Formula:

Capacity Hour = ([Sprint Hours] * [% Allocation])-[ Other Activities]

This formula can help many of us Project Managers calculate and manage our team’s capacity.

As a Project Manager, your role is to accurately estimate their capacity per sprint from a review of each team member’s calendar. By considering that things change within an organization, meetings pop-up in various calendars and training gets canceled, it’s a continuous activity to keep abreast of your team’s capacity.

Here are other activities that impact a team capacity that a seasoned Project Manager has to look out for:

• Public Holidays
• Company and/or Department meetings
• Team member Personal Time Off (PTO)
• Training Sessions

How to define Velocity

Firstly, velocity focuses on the pace at which the team delivers work. Each work item in a sprint is valued based on the Story point estimate provided by the team. Based on those estimations the team will work on a subset of these User Story during a sprint. At the end of the sprint, the Sprint Velocity is calculated from the number of User Stories completed at that point.

Example

The table below shows the status of the User Story within a sprint:

From the illustration above, only the User Stories that are completed are added to the team overall velocity, therefore in the example, the total velocity is at 16 Story points.

Capacity in relation to Velocity

Now let’s see how we tie the capacity with velocity. A Project Manager would have already observed a few sprints so that he would be able to provide a forecast for the remaining

Forecasted Velocity Formula:

Forecast Velocity = ([Avg. Velocity] / [Avg Capacity])*Est. Capacity

Here is a table that shows the relationship between capacity and velocity below:

The table illustrates a team completing five (5) sprints with an average capacity of 155 hours to deliver on average 51 Story Points. After the Project Manager calculates the overall team capacity for Sprint 6 through to 8 the capacity is as follows 182, 172, and 145 respectfully. The team is able to forecast the velocity of the said sprints to gain a better understanding of the number of work items that can be completed by the team.

The Aftermath of Forecasting

The metrics help shape the Sprint backlog by identifying how many of the prioritized User Story that can fit within a future sprint. This helps the team to create a roadmap of features to be delivered within a timeline. It’s essential to consider capacity and velocity as a predictive tool as it will help demonstrate to the team what success looks like. As more and more sprint passes, the more accurate your projections will be.