One of the things we do as company staff, who are involved in projects, is to justify our productivity as a result of the number of hours we have worked, the amount of money we have spent (on the project), and the effectiveness of the processes used in delivering our projects.
This is particularly important when starting the implementation of a digital transformation initiative or using a new framework to deliver cutting edge technology. At the early stage of every project (regardless the industry), normally the team is new and going through their forming and storming stage. Do not be surprised if you face a lot of challenges like I have experienced, especially when you have a PMO office which always push for accurate resource management and accountability. Trust me, at this stage, you will find yourself in a team that is facing a lot of anxiety and uncertainty.
This is not the best time to determine your team velocity. Any any plans you make at this early stage will normally be flawed and might not show your real team's sprint velocity which is a function of your team's Focus Factor. As a Scrum Master, you have to encourage your team to be self organising and determine their strengths and output rate. This is normally done after the 3rd to 5th sprint. Once you determine this, it is easier to determine team Capacity Planning.
I have been asked many times, why we need to determine our team capacity, while the Agile Manifesto states that there is preference for a "Working Software Over Comprehensive Documentation" and the need for teams to "Respond to Change Over Following a Plan"... Whatever method you use in a project, the truth is that you need to know what you are producing, the risks involved, and the metrics to measure if you are as productive as you can or not. So, depending on the number of team members you have in your Scrum team, you can effectively determine the Focus Factor (which is the team's ability to remain focused on the sprint goals without any other distractions), by using the below formula:
Focus Factor = Sprint Velocity / Team Capacity
Sprint Velocity is the average completed (estimated) story points over the past three to five iterations. Team Capacity is a product of the total number of Scrum team members multiplied by the number of team productive days.
Here is a quick example for clarification: If your average sprint story point is 32, and you have 6 team members who are available to work (8hrs/day).
Focus Factor will be: 32 /(6*8) = 0.67
So, for a Focus Factor of 0.67, to now get the effective Team Capacity, it is the Focus Factor multiplied by the total number of hours the team is available for work. For a 2 weeks sprint (say it from 1st January), it is 10 days taking Saturdays and Sundays off (if applicable).
Team capacity would be 0.67 * (6*8*10) = 321.6 hours
From the calculations above, this team will have 158.4 (480 - 321.6) (Total working hours of the team in a Sprint - Team Capacity) hours for Sprint Planning, Daily Scrum, Sprint Review, Sprint Backlog grooming, Sprint Retrospective, Breaks, team meetings (story point clarifications with PO) and other needs that arise on the course of the sprint.
It is vital to always consider your Team Capacity (a direct function of the Focus Factor (normally between 0.6 to 0.8)) when committing to Sprint Story points! Otherwise, you will be setting an unachievable sprint target for your team. With Team Capacity, you can fairly predict the number of hours your team is actively working on committed product increment, their ability to remain focussed on the sprint goals without any other distractions - and also know when you have a healthy team.
Thank you very much for reading!
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Date: 6th May 2019
Location: Offices of International Scrum Institute™ (Wollerau, Switzerland)
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