How to estimate product backlog effectively

How to estimate product backlog? The product backlog contains information which is essential to the success of every product development process. Teams that know how to estimate product backlog accurately are the ones able to complete projects within set timeframes.

By estimating the product backlog, Product Owners gain the ability to properly prioritize the tasks included in it to decide which ones are worthwhile.

Moreover, Product Owners can then make better decisions about the project’s overall scope and schedule. For example, they might reconsider planning a must-have feature first once it has been estimated to require a considerable effort. Also, product backlog estimation enables teams to make high-level forecasts as the proposed story points are plotted into the burndown chart.

Here are some essential tips to help you estimate your product backlog effectively and build a fantastic product.

How to estimate product backlog? Use points!

When estimating tasks, smart teams go for story points rather than hours. Story Points offer relative values for the level of effort required to complete a product backlog item, taking into account:

• The amount of work that needs to be completed,
• The risk and uncertainty brought by the item,
• The complexity of the task.

By using story points, team members don’t enjoy the false sense of certainty of hourly estimates. Instead, they can see that one item may require double the effort of another item. Using relative values to create that type of internal system of estimation is a smart move – once the team completes a few sprints, predicting the number of story points, it’s able to deliver in an iteration will be easier. And that will make sprint planning much more accurate.

But what about the scale for your points system?

One of the most popular scales is the Fibonacci sequence. Here’s what it looks like:

1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987…

It’s a sequence of numbers where each number is the sum of the previous two. When using these numbers to indicate the size of a specific task, it’s best to use the range of 1-21.

Example:

If your product backlog includes a report and you have an idea about how much complexity and effort it requires, you can give it a 3. Let’s say that there’s another report next in the backlog. You can size this item relative to the other one – is it larger or smaller? If it’s slightly smaller, you can assign it a 2. If it’s significantly larger, 8 or 13 will be more accurate.

How to make sure this scale works for you? Pick the smallest backlog item and give it a 1. Then find the largest item and assign it the highest number of your scale – in our case, that will be 21. These two will serve as your markers. Now you can size your backlog working from top to bottom using your scale.

Prioritize tasks

Once you’re done with sizing a substantial portion of your backlog – remembers that it’s only worth to size tasks that you can picture your team competing in the near future – it’s time to take the next step: prioritization.

Ask the Product Owner to have a look at the backlog and its priorities. They can now see the relative size of features they’re asking for – and that might prompt them to change their priorities. Items that got assigned a high number might be pushed back to the side while the team focuses on less demanding tasks. If priorities change, it’s enough to move items down or up in the order of the backlog.

How to estimate product backlog right?

Teams can take advantage of different methods that allow the correct estimation of product backlog items. Here are the 3 most popular ones:

Planning Poker

The most popular technique for estimating, Planning Poker can be a fun exercise for your team. Once you decide on a ranking scale, set up a team meeting and give out cards that cover all the ratings to every team member. Read the item to be ranked out loud to the group.

Then each member needs to select a card based on their perceived estimation of the work the item involves. They need to keep their card hidden until everyone has chosen their rating.

Now it’s time to reveal them all at the same time! If the selected estimates are similar, the group is in agreement. If not, be sure to discuss these differences to align the team’s views on estimates and then repeat the process. If you still can’t reach a consensus, use an average score, or try breaking your item up into smaller parts.

Ordering for estimation

Another productive method for estimating backlog items is ordering. Here’s how it works: every team members takes a card that represents a product backlog item from a pile and adds it to a table.

The task here is to position the item in relation to how large they estimate it to be – the most substantial items go at one end of the table and the smallest ones at the other. Then the next member takes a card and places it on the table in relation to other cards.

Alternatively, they can challenge the current position of a card which has already been assigned its spot on the table. For example, if they believe that it requires more effort, it goes higher up the board.

Once all the cards are placed on the table, and team members agree about the order, it’s time assign number to these items using the Fibonacci scale. Start with the smallest item, assigning it an estimate of 1. Then do the same for the next item on the table. As you move up the table, you’ll reach items that the team would estimate as 2, 3, 5, etc.

T-shirt sizes

Finally, there’s the method based on t-shirt sizes. We’re talking about S, M, L, XL, etc. Since we’re all familiar with this scale, it often comes in handy when the team is getting started on the project and doesn’t want to commit to numbers that are perceived as more abstract.

If you’re considering to use this technique, note that at some point you’ll have to convert these sizes into numbers if you plan to plot burndown charts. There’s simply no other way to accomplish that. Also, your team members might have differing opinions about the relative effort required for these rankings. For example, it might not be clear whether a Large item is twice as big, or five times as big, as a Medium item.

The takeaway

Learning how to estimate product backlog efficiently is a crucial skill for any development team. By using these techniques and best practices, you’ll be on your way to mastering the estimation game and producing estimates that help all the stakeholders understand the effort it will take to create a product.

Are you looking for a development team which provides accurate product backlog estimations? Get in touch with us; we have plenty of experiences in estimating product development projects for different industries.

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