Understanding Story Points and Their Role in Agile

You’ve probably felt the frustration of inaccurate timelines throwing your entire sprint off balance. Even if you’ve planned carefully, rallied your Agile team, and assigned effort to tasks, you might have faced unexpected delays and shifting priorities.

You deserve a better way to predict progress without relying on outdated techniques that don’t match the realities of your work.

Story points have long been used to tackle this challenge because they promise a way to estimate the effort required for complex tasks. But are story points truly helping your development team, or are they creating more noise than clarity?

At Axify, we believe there’s a better way. 

In this article, we’ll guide you through the cracks in traditional story point estimation and offer smarter solutions tailored to your team’s needs. Let’s get started.

What Are Story Points?

Story points are a relative measure of effort in Agile that accounts for complexity, uncertainty, and the amount of work needed to complete a task. Instead of focusing on actual time, story points measure relative effort. This includes the complexity of the work, the uncertainty involved, and the amount of effort needed.

For example, a user story with two story points reflects twice the effort of one point. This relative system helps your Agile team align on estimates without getting bogged down by time-based discussions.

To estimate story point values, you can use the methods below. They provide structure to the estimation process and encourage collaboration during sprint planning. Here’s how they work:

• Fibonacci sequence: This method estimates task complexity using numbers based on the Fibonacci sequence (e.g., 1, 2, 3, 5, 8, 13). The gaps between numbers grow progressively, reflecting the uncertainty and effort that increase with more complex work. This approach helps teams prioritize tasks more effectively by focusing on relative difficulty rather than exact time estimates. 
• T-shirt sizes: This approach estimates the effort required for tasks using sizes (XS, S, M, L, XL). It’s a more straightforward and less granular method, ideal for teams focusing on high-level planning without overanalyzing. Each size corresponds to a relative level of complexity or time investment. 
• Planning Poker: Planning Poker is a collaborative estimation game in which team members assign story points by selecting cards with numbers (usually from the Fibonacci sequence) to represent their estimate. After revealing their cards, the team discusses discrepancies and reaches a consensus. This method encourages teamwork, aligns understanding, and reduces bias in estimates.

The goal is to break down complex tasks and build consensus about their level of effort. Conversations during exercises such as Planning Poker can reveal gaps in understanding so your team approaches the work with clarity and alignment.

Story Points vs. Hours

Unlike time-based estimates, story points avoid attaching emotional weight to deadlines. They help your team focus on solving problems rather than measuring hours worked.

Story points also account for non-project activities such as meetings and interruptions. However, they are not perfect. Managers frequently misuse them by treating them as a measure of productivity or trying to compare team velocities.

Remember: We don’t advocate using story points because historical throughput offers a more transparent, actionable picture of your team’s performance.

We’ll explore this metric further in the following sections.

Scrum, Story Points, and Conversations

In a Scrum environment, story points are about more than assigning numbers. They spark essential conversations between your scrum team members and product owners.

These discussions can improve your understanding of product backlog items and align everyone on acceptance criteria. The result is better collaboration and more accurate story point estimates.

Why rely on guesswork? Historical throughput allows your DevOps team to make decisions based on accurate data and achieve more consistent and meaningful outcomes.

Why Story Points Gained Popularity?

Story points gained popularity in Agile project management because they help you tackle uncertainty in software estimation. 

Although we don’t encourage story points, we admit they have one significant benefit: unlike traditional time-based estimates, story points shift the focus to effort-based evaluations.

This allows you to plan better without the stress of tying estimates to exact hours or days. Story points let your team map tasks in a way that reflects real-world challenges by accounting for complexity, risk, and effort.

Story points can improve collaboration during sprint planning meetings. Conversations about tasks help build a shared understanding of goals and ensure alignment across your team. Planning Poker sessions, for instance, engages these discussions by breaking larger tasks into manageable pieces and setting reference stories as baselines.

How to Calculate Story Points

To calculate story points, you assess the effort needed to complete a user story or product backlog item. This involves three key factors: the amount of work, complexity, and risk or uncertainty.

For instance, a straightforward task with minimal risk may earn one point, while a complex task with high uncertainty might receive five or eight points. These values help you map effort without relying on exact hours so that your team stays aligned during sprint planning.

Another popular method for assigning points we have mentioned twice so far is Planning Poker. In a Planning Poker session, your team reviews a backlog item and discusses it briefly. Each member independently assigns a value using a story point sequence. Once everyone reveals their estimate, the team discusses discrepancies, aligns on a value, and moves forward. 

Atlassian, for example, likes this approach because it improves collaboration, but it’s also highly subjective.

Next, we’ll discuss the challenges and limitations of using story points in modern development.

The Limitations of Story Points in Modern Development

Story points have been a staple in Agile methodology, but they aren’t without challenges. As your projects become more and more complex, you may notice how inconsistencies and misuses can derail your team’s productivity. Let’s check out the key limitations of story points.

Subjectivity and Variability

You’ve likely experienced how teams handle story point estimation differently. One team may assign five points to a task that another team labels as two. This variability makes cross-team alignment challenging, especially when trying to scale efforts across departments or organizations.

The concept of story points hinges on subjective judgment, which typically varies based on individual skill levels and group dynamics. Estimation meetings can be influenced by biases, such as an overconfident developer pushing for a lower estimate or groupthink-swaying decisions. These inconsistencies lead to unpredictable sprint outcomes.

Misuse in Practice

Story points are meant to estimate effort, but they’re typically misunderstood as a measure of productivity. Managers may mistakenly equate higher story point completion with better performance and put unnecessary pressure on your team.

This misuse changes the focus from delivering value to chasing numbers, and it will leave you frustrated. Emotional attachment to story point values can further complicate matters. When deadlines get tied to points, they stop representing effort and start dictating pace.

Let’s see an example.

Skype also went all-in on Scrum. The company used processes such as story points and regular sprints to speed up delivery. While it helped ship features faster, it also added unnecessary complexity that slowed them down.

Meanwhile, WhatsApp kept things simple with a lightweight approach that focuses on building a solid messaging experience. That flexibility allowed them to move faster and eventually leave Skype in the dust. This shows that rigid frameworks can hold you back in competitive markets.

Side note: According to the 16th Annual State of Agile Report, nearly 90% of respondents report actively using Scrum in their Agile practices. Scrum is a valid framework from our perspective, but its rigid structure—such as the reliance on story points and fixed sprints—may not always be the best fit to outmaneuver competitors and focus on delivering core value.

Ignoring Unplanned Work

Your sprints rarely go as planned. Unforeseen tasks frequently disrupt workflows, such as addressing a sudden bug or managing external dependencies. Story points don’t account for this emergent work, which can lead to inaccurate predictions.

Essentially, you might plan for an entire sprint only to find half the work derailed by unplanned activities. This disconnect between planned effort and actual development leaves you struggling to meet sprint goals.

Story Points: Do They Still Work in Large or Distributed Teams?

Story points are less effective in large or distributed teams due to inconsistencies in interpretation, increased communication overhead, and misleading velocity comparisons. In these settings, focusing on more consistent and outcome-driven metrics is a better approach.

Let's talk more about that for a second.

Enterprise Challenges

Scaling story points across multiple teams is no small task. You’ve probably noticed how each team has its own interpretation of story points that are shaped by unique workflows and skill levels. This lack of standardization makes aligning story-point scales across teams a constant headache.

When you try to consolidate story points at the enterprise level, misalignment creeps in and leads to inconsistent estimates. The communication overhead to maintain uniformity only adds to the challenge.

Instead of focusing on your actual work, you find yourself bogged down in meetings to clarify what a “5-point task” means for each team. These issues make the concept of story points less practical in large-scale settings.

The Case Against Velocity Comparisons

Using velocity to compare team performance is equally problematic. You might think tracking the number of points teams complete per sprint offers valuable insights, but this approach typically backfires.

Focusing on velocity comparisons can lead to losing sight of what really matters: delivering quality outcomes. Pursuing higher numbers can lead to inflated estimates, rushed work, and increased technical debt over time. Instead of improving teamwork, it can push teams to prioritize point completion over meaningful progress.

Story points may have worked for smaller, localized teams. However, their limitations typically outweigh their benefits in large or distributed environments. 

This can leave you searching for better ways to manage Agile projects. We’ll help you with that in the next section.

Better Alternatives to Story Points

You can try out qualitative and quantitative approaches focusing more on outcomes and team alignment than arbitrary numbers. Let’s look at practical alternatives that help you deliver real value.

Qualitative Approaches

Lightweight methodologies such as Shape Up and Amazon’s Working Backwards model give you a fresh perspective. Instead of obsessing over precise estimates for every Agile story, you focus on value delivery.

Shape Up breaks work into cycles and encourages teams to define clear boundaries so that you finish meaningful work without overcommitting.

Similarly, Amazon’s Working Backwards model starts with your desired outcome, such as a customer need, and maps tasks backward to meet that goal.

These approaches reduce time spent on abstract measures, such as mapping stories into units of measure, and direct your energy toward actionable results. Shifting your mindset from granular planning to broader impact helps you save time and empower your team to focus on delivering customer value.

Quantitative Approaches

On the data-driven side, engineering intelligence tools like Axify give you an edge. Instead of relying on an estimation method prone to bias, you can track actual developer activity. Axify measures critical metrics like DORA, cycle time, throughput – and more. These insights allow you to identify bottlenecks and fine-tune your processes for upcoming sprints and beyond.

Real-world examples prove the effectiveness of this quantitative approach. Using Axify’s tools, two teams at the Development Bank of Canada reduced time spent in pre-development by up to 74% and quality control by up to 81%. Even better, they increased overall delivery speed by up to 2X. 

A key driver behind this transformation was better story slicing—breaking down Product Backlog Items (PBIs) into smaller, manageable work items. This allowed teams to deliver value more frequently and maintain momentum. Combined with initiatives like shifting QA earlier in the process, training internal champions, and limiting work in progress (WIP), these efforts resulted in a 51% faster delivery time overall.

If you want to get similar—or even better—results, keep reading the next section.

Axify Helps You Move Past Story Points

If you’ve felt frustrated with the limitations of story points, Axify offers a more reliable way forward. Instead of relying on abstract measures, you can focus on real metrics that show how your team is performing. Axify lets you get insights to improve productivity, streamline workflows, and prioritize outcomes.

Better Metrics

Axify lets you track developer productivity in ways that truly matter. Metrics such as pull request (PR) time, throughput, cycle time, and velocity replace guesswork with clarity.

Use our dashboard to see how long tasks take from start to finish and pinpoint where delays happen. This real-time data lets you identify bottlenecks before they disrupt your typical two-week sprint or future sprint goals.

This doesn't mean that you should only focus on units of time. You should try to understand your team’s workflow at every level. Axify transforms how you approach project planning by showing you what’s slowing your progress and where you can improve.

Focus on Outcomes, Not Estimates

Instead of worrying about consistent estimations or whether a baseline story is accurate, Axify shifts your focus to what truly counts. Delivery quality, team morale, and workflow efficiency are far more impactful than debating story point practices. Axify provides insights that help you support your team while achieving real outcomes.

When using Axify, you move past story points and leverage a system that prioritizes collaboration, productivity, and meaningful progress every sprint. You’re no longer guessing but building better processes that adapt to your team’s needs.

Are Story Points the Problem or the Symptom?

Story points aren’t the root cause of Agile teams' problems. Instead, they’re a symptom of deeper cultural and organizational challenges. While story points can offer value as a unit of measure for effort, their misuse typically highlights broader problems in how teams operate and communicate.

A Cultural Problem in Agile

The misuse of story points is caused by organizational pressures to deliver quickly—without understanding the nuances of Agile practices. Managers may use story points to track productivity or impose rigid expectations, which leads to distorted results and frustration.

Successful Agile teams, such as those at big tech companies, don’t rely on traditional story points and other project management practices. Instead, they build processes that emphasize collaboration and value delivery.

You may find that comparing average velocity across teams or striving for consistent story point completion only creates more common challenges. These practices typically ignore the dynamic nature of software development and your team's evolving needs over time.

Reframing the Discussion

Instead of focusing on achieving an accurate estimate or refining your base story, you should shift the conversation to what truly matters: collaboration and continuous improvement.

Discuss the underlying goals of each mapping story and align on shared outcomes. This shift removes the pressure to produce perfect Agile estimates and instead creates an environment where you can adapt, experiment, and learn.

Moving away from rigid story point practices and toward flexible, people-focused processes is how you empower your team to thrive without unnecessary constraints.

The Verdict: Should You Ditch Story Points?

Story points can work for small, co-located teams with strong alignment and projects with low variability and predictable tasks. They provide a shared understanding in environments where the work is consistent and straightforward. However, they typically fall short for distributed teams, large-scale projects, or high-pressure environments with frequent scope changes.

For your team, consider experimenting with lightweight Agile methods or tools that focus on real-time data. Shifting to data-driven approaches improves efficiency and reduces reliance on subjective estimates. You should build processes that adapt to your team’s unique needs and focus on collaboration and outcomes over effort estimation.

Axify helps you overcome the limitations of story points by offering actionable insights into team performance. Book a demo today to see how to improve workflows and communication and achieve better results.