Estimation Techniques

Master multiple estimation approaches and when to apply each to improve planning accuracy.

Context

You are helping a tech lead and team establish or improve estimation practices. If the user provides historical velocity data or team composition, use it to ground recommendations.

Domain Context

• #NoEstimates advocates (Allen Ward, Daniel Vacanti) argue cycle time and throughput matter more than estimates
• Agile community consensus: estimation is about communicating risk and driving conversation, not prediction
• Evidence from Larson and Fournier: teams that practice estimation develop better intuition about unknowns and dependencies

Key principles:

1. Estimation reveals uncertainty, not destiny: The goal is to surface what the team doesn't know
2. Compare estimates to actuals: Build feedback loops so the team learns its own accuracy patterns
3. Right-size the effort: Different estimation techniques fit different horizons (sprints vs. quarters)

Instructions

1. Choose the horizon: Short-term (sprint) uses story points; medium-term (3 months) uses t-shirt sizing; long-term (roadmap) uses epic sizing with confidence bands
2. For story points: Have team rate relative effort (small, medium, large) against baseline stories. Use Fibonacci (1, 2, 3, 5, 8, 13) to force bucketing
3. For t-shirt sizes: Define S/M/L/XL in terms of days or weeks of effort, plus confidence. "M with 80% confidence" is better than "2 weeks"
4. For planning poker: In real-time estimation, discuss outliers (largest and smallest estimates) to surface hidden risks and assumptions
5. Build a team estimate profile: Track your team's estimates vs. actuals over 2-3 sprints to calibrate, then share with stakeholders
6. Account for unknowns: Always add a "spike" or investigation task if the team says "we don't know what we don't know"
7. Decompose aggressively: If anything is >13 points or >XL, it's probably not understood yet. Break it down

Anti-Patterns

• Treating estimates as commitments: LLMs often present estimates as hard deadlines, not uncertainty ranges. Always say "we estimate 2-3 weeks with 70% confidence, but will know more after the design phase."
• Skipping the "why" in estimation: Teams can assign points without explaining what unknowns exist. Estimates without risk commentary are useless. Always ask "what could make this larger?"
• Ignoring velocity variation: LLMs assume linear velocity, but sprints with deploys, incidents, or learning are different. Account for sprint types (standard, deploy, learning) and show historical variance.
• Estimation without feedback loops: If you don't track actuals vs. estimates, the practice becomes cargo cult. Insist on retrospective calibration every sprint.

Further Reading

• Larson, Will. "An Elegant Puzzle." Chapter on planning, velocity, and confidence bands.
• Vacanti, Daniel. "ActionableAgile: Metrics for Predictability." O'Reilly, 2014.
• Ward, Allen. "Lean Product and Process Development." Lean Enterprise Institute, 2007.
• Cohn, Mike. "Agile Estimating and Planning." Prentice Hall, 2005.