7 Agile Estimation Techniques: Leave No Room For Error!

By: Rajesh Rohatgi Time: 10 Min Read Updated: April 24, 2023
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Agile estimating and planning is an iterative process of evaluating project development tasks, processes, and probability of completion. It is used in software development and other project management processes to assess the expected outcomes of a project accurately.

Agile estimation helps to inform decisions about how much time, resources, and budget a project will need, allowing for more efficient project management and successful delivery.

Unlike traditional estimation techniques, agile estimation takes a “bird’s eye view” approach to planning and evaluating projects. It focuses on incremental planning and assessing the expected outcomes of each step in the project. By taking a big-picture view, agile estimation allows for faster response times and more accurate estimates capability when changes are needed. By allowing for regular feedback between the development team and stakeholders, agile estimation helps to ensure that the project remains on track and objectives are met.

The benefits of using agile estimating and planning include more realistic expectations, better accuracy and control over tasks, improved collaboration and communication among team members, and greater flexibility when responding to changes or unforeseen events. Agile estimation can also ensure that teams are well-prepared for upcoming changes, helping to minimize delays and disruptions to the project timeline. Finally, it provides clarity of purpose, which can help teams stay motivated and organized throughout the life of the project.

What Are Some of the Common Agile Estimation Techniques?

Story Points and Why They Are Used in Agile Estimation?


Story points are a popular Agile estimation technique used by Agile development teams to estimate the complexity of tasks. Story points provide an abstraction of complexity, which is measured using a relative scale rather than using absolute timeframes. The Fibonacci scale (1,2,3,5,8,13 etc.) is often used to measure relative complexity and can be tailored to the development team’s unique needs.

Story points give the agile development team a better assessment of the time and resources they need to complete any given challenge. Because story points use an abstract measure of relative complexity, the development team can estimate quicker and in greater detail than traditional estimation processes.

Using story points effectively requires collaboration from the entire development team. The team must come to a consensus on which tasks are considered “high” or “low” complexity, as well as which tasks should be assigned more or fewer story points. This encourages honest feedback from all team members and allows for the creation of accurate estimates. Moreover, this process creates a sense of ownership among the development team; each member feels accountable for the task at hand, and is where accountability is placed for the success of the project.

Overall, story points provide a valuable tool for gauging complexity in Agile development teams. It enables development teams to estimate timeframes accurately, allows them to set realistic expectations, and ensures that everyone on the team takes ownership of the project.

Also Read: Benefits of Agile Methodology & How It Revolutionizes Development Process

Three-Point Estimation And Why They Are Used In Agile Cost Estimation Techniques


Three-point estimation is an agile cost estimation technique that combines the information of three estimations to come up with a more accurate estimate. The three estimates are based on the best case, most likely case, and worst case scenario. By combining these points of view, Three-Point Estimation provides a closer view of what your project will cost, allowing you to make better decisions during the planning process.

Three-Point Estimation is an Agile cost estimation technique that can help account for unexpected delays or rising costs while still providing a realistic picture of what it will take to complete a project. This makes it invaluable during the agile estimation process since changes continually occur throughout the project's lifecycle. With this technique, you can quickly identify high-risk areas in order to adjust the scope and reduce costs.

Using this Agile cost estimation technique also helps create better forecasting models for future projects. Instead of relying solely on past experience, it takes into consideration the variability of each project's unique circumstances. This allows you to better predict the cost, timeline, and potential risks associated with future projects, giving you more confidence and certainty when making decisions moving forward.

Planning Poker and How It Can Help With Agile Estimating and Planning


Planning poker, also known as Scrum poker, is an affinity estimation technique in agile software development that is used to estimate the effort and time required to complete a task.

It is a consensus-based way of reaching an agreement among team members on a task’s difficulty level. It helps teams determine the estimated effort required to complete a task while improving their forecasting accuracy. During the process, each team member independently estimates how much effort a task may take to complete by playing numbered cards that represent an estimate of the number of story points a specific task will take.

At the end of the estimation round, each team member reveals their card, and the team discusses why certain members had higher or lower estimates. After a brief discussion of why certain estimates were higher or lower, the team settles on an agreement on a final estimate for the task. By discussing the various estimates and understanding each other’s point of view, the team can come to an agreement and assign commitment points for the task.

The assigned commitment points provide an objective reference point for comparing future tasks and tracking commitments over time. Additionally, with this affinity estimation technique in agile, the discussions during planning poker force teams to dig deeper into each task and provides an opportunity to identify which tools, methods, and processes can help them speed up completion and deliverables.

The Concept Dot Voting and Its Purpose as Affinity Estimation Technique in Agile


Dot voting, also known as a form of Affinity Estimation technique in Agile, is used to quickly collect the actionable items and prioritize them. It’s used to quickly surface and evaluate the priority of groups of ideas or items within a specific timeframe, which makes it especially useful in fast-paced environments.

First, participants are asked to review a set of proposed items and then assign points or “dots” to each one from a given set. The set can include anything from ideas for a specific project to voting for the most popular candidate for a position. Participants only have a limited number of “dots” to assign, so they need to prioritize the items based on the benefit they think they would bring the group.

At the end of the voting session, the person running it can tally up the points assigned to each item and get a view of the most popular items. This allows them to quickly identify what the group feels is most important, making it easier to make decisions or adjust plans accordingly. Dot voting can also provide a warm and inclusive sense of participation amongst team members, as everyone is given an equal opportunity to contribute their opinion.

What Are Some of the Advance Agile Estimation Techniques


Velocity tracking is an advanced agile estimation technique used to measure the performance of a project team. The technique uses data points gathered over time to measure the speed and progress of the team on a number of tasks. By understanding velocity, the team can continuously improve its performance over time and benefit from more accurate estimates in the future.

Velocity tracking has a number of key advantages. Firstly, it helps teams to measure progress accurately so they can proactively anticipate changes to the timeline. Secondly, it enables the team to adjust expectations and resources as needed to ensure efficient delivery. Last but not least, velocity tracking holds the team accountable for their results, which encourages consistent delivery and better results.

Another important benefit of velocity tracking is that it helps teams anticipate risks early on in the process. By understanding how well the team performs with each task, teams can adjust their processes and make strategic decisions for better results. This Agile cost estimation technique helps reduce the risks associated with a project and ensures that it is completed on time and within budget constraints.

Ultimately, velocity tracking is a great way for teams to measure the performance of their project and make necessary adjustments for better results. Through continued use, teams can become more adept at predicting delivery times and outputs with greater accuracy with Agile estimating and planning.

Monte Carlo Analysis and How It Can Be Used for Agile Estimation Techniques


Monte Carlo analysis is a powerful tool for agile estimation techniques. It uses simulation and statistical analysis to produce an estimation with a smaller margin of error compared to traditional approaches. The technique makes use of randomly generated scenarios and outcomes, allowing agile teams to develop more accurate estimations for projects.

Monte Carlo analysis can help with project planning and budgeting. It can provide quantitative information about the expected project cost, including factors such as resources, time, and contingencies. This information can then be used to create a realistic budget. Additionally, Monte Carlo analysis can help with risk management; by providing probability estimates of project success, it allows teams to identify and manage potential risks before they become issues.

The advantages of Monte Carlo analysis go far beyond just cost and budgeting. By utilizing data from multiple sources, teams are able to take into account outside factors that may influence a project’s outcome. This broader view encourages collaboration between team members and gives a realistic assessment of the scope of the project. This means that estimated delays, changes in scope, and other issues are identified faster, allowing teams to take corrective action as soon as possible and minimize unexpected changes.

The potential of Monte Carlo analysis to make the estimation more accurate and efficient means it is an essential tool for agile teams. By giving teams the quantitative data they need to plan projects and anticipate potential issues, Monte Carlo analysis can save time and resources while creating more successful projects.

Weighted Scoring and How It Can Be Used to Prioritize Tasks


Weighted scoring is a tool used to prioritize tasks and allocate resources to problems or projects. In a nutshell, weighted scoring allows decision-makers to identify the most important criteria for a project, assignment or problem and assign a numerical value for each criterion. This number signifies its relative importance when compared to the other criteria. By summing these numbers, we can work out an overall priority score for each alternative and make decisions about which tasks should be tackled first.

Weighted scoring is an objectively quantifiable agile estimation technique tool that can be used in a wide variety of scenarios. For example, when appraising job candidates, weighted scoring can be used to compare and contrast the different qualifications, experience, and soft skills each candidate brings to the table. In addition, weighted scoring enables a company to prioritize tasks and projects within its organization. It works by making the task criteria transparent and assigning a numerical value to each criterion. This agile estimating and planning make it easy to compare tasks side by side and figure out which one should be dealt with first.

Weighted scoring is also a useful tool for managing project portfolios. In this context, it enables teams to prioritize projects based on their estimated ROI and how well they fit into the organization’s overall strategic objectives. In short, weighted scoring is a valuable decision-making tool for assessing the relative importance of tasks, prioritizing resources, and comparing alternatives side by side. It is an important tool in any organization’s toolbox for ensuring that resources are effectively utilized and that the most important tasks are tackled first.

What are the 3 Main Levels of Agile Estimation?


Project-level estimation involves assessing the whole picture; it looks at the overall size, complexity, and scope of the project, helping to determine high-level resource requirements and time frames. This kind of estimation is completed early in the project's lifecycle before any development work is done.

Release-level estimation takes a more laser-focused approach. It considers the effort needed to complete a specific release or set of features within a project. This has to be done prior to each release so that teams can plan out the scope of their work and calculate how much they’ll be able to accomplish within a designated block of time.

Finally, there’s Sprint-level estimation. Here, the focus is even narrower – it looks at how much effort is required for individual tasks or user stories within a sprint. As with release-level estimation, this must be done before each sprint so that teams can accurately predict how much work they’ll be able to commit to completing in the allotted time frame.


Agile estimation techniques are an integral part of Agile project management. They help in determining the size, cost, and duration of a project while achieving optimum resource allocation. Agile estimating and planning is a collaborative process that involves team members, stakeholders, and customers. In this process, items on the product backlog are estimated.

Its methodology also has its fair share of challenges, but with proper planning, execution, and monitoring of the process, these could be managed to ensure successful project deliverables. Moreover, combined with the right team, agile development methodology will surely aid organisations in creating groundbreaking products and services that are ready to take on the ever-evolving tech industry.

Agile cost estimation techniques are used to estimate the cost involved in an Agile project. The most common technique used is Story Point Estimation, where each requirement is assigned a numerical value based on its complexity. This method helps determine how much time it will take for the team to develop each requirement and allocate resources accordingly.

The affinity estimation technique in Agile is another popular method that's based on grouping items of similar sizes together. Team members categorize all requirements into different groups so as to make it easier to estimate their size and the effort required.

Overall, using these Agile estimating techniques help achieve better planning with increased efficiency and transparency throughout the project timeline. Incorporating these methods into your Agile process can lead to better cost control, smaller time-to-market windows, and higher overall customer satisfaction rates.