Story Points are a relative ranking used for sizing a Product Backlog Item. Story Points are a great way to speed up the process of estimating. You are not looking for the exact hours to achieve a feature, but the relative time it would take compared to other items on the Product Backlog.
Reference for Learning Story Points
A great reference for understanding and using Story Points is Mike Cohn’s Agile Estimating and Planning Book. In this book, an entire chapter is dedicated to story points (“Chapter 4 – Estimating Size with Story Points”).
A Story Point is used to estimate the relative complexity of each of the backlog items on a product backlog. At ThreeWill, we use a modified Fibinacci sequence for the estimation scale. This range is 0, 0.5, 1, 2, 3, 5, 8, 13, 20, 40, and 100. It is a good practice to have estimates that are within one order of magnitude and centered around the scale of 1, 2, 3, 5, 8. Therefore, the team should agree upon what characteristics are attributed to a 1, 3 and 8, so they can calibrate to this area of the scale. After this calibration is done, the team is ready to start sizing the Product Backlog. Note that these Story Points are a scale of relative complexity, so a 2 is twice as complex as a 1 and a 3 is 1.5x as complex as a 2.
Story Point’s Complexity Should Roughly Correlate with Time to Implement
A Story Point’s complexity should be on a scale that is relative to the duration of the project (i.e. if the feature appears to be complex to the user but quick to implement and test, then the feature should be ranked as a simple feature due to the ease of implementation… in other words, the complexity is based on the time it takes the team to produce the completed feature).