Story Points vs. Hours: A Practical Guide for Software Teams

You might constantly search for better ways to plan your work and achieve reliable outcomes. If you’re leading a software development team, you know that estimating effort accurately is crucial. Story points and hours are go-to metrics, and proponents of both claim each helps you get more accurate assessments (thus, create better plans). 

But do they?

In this article, you’ll understand the strengths and weaknesses of both approaches. You’ll also learn about a more thoughtful alternative that simplifies the sprint planning process while giving you more precise insights into your team’s performance.

This isn’t just another generic guide about Agile planning. It’s a deep dive into the tools and strategies that help you confidently tackle challenges. Let’s help you make informed choices and get closer to delivering value every sprint.

What Are Story Points?

Story points are a relative unit of measurement that helps you estimate the effort and complexity of a user story.

Instead of focusing on the actual time needed to complete a task, story points are said to have other benefits. Story point proponents say they allow your team to consider the complexity, the risks involved, and any uncertainties. This approach should shift the focus from rigid time estimates to a broader perspective to improve planning and decision-making.

Jeff Sutherland, one of the creators of Scrum, notes that story points can dramatically improve the estimation process. For example, he cites that using story points reduced estimation time by 80% for a CMMI Level 5 company. He also mentions a telecom company that used the planning poker estimation for story points. This led to a 48 times faster estimation than traditional waterfall methods, even if just as accurate.

However, we often see story points being misused in practice. And even if some teams can use them to their advantage, many others simply need better metrics.

Story Point Formula

There’s no universal formula for calculating story points. Instead, you and your team create your scale to measure the effort and complexity of tasks. Many teams use the Fibonacci sequence (1, 1, 2, 3, 5, 8, 13, and so on), which emphasizes the increasing uncertainty as tasks grow in size.

For instance, a 5-point task is relatively straightforward, while a 13-point task requires significantly more effort. The important thing is that your team agrees on the scale and uses it consistently.

How to Measure Story Points

You measure story points through team consensus during your sprint planning process. Techniques like the ones we mentioned above help you assign a story point value to each task based on its complexity, risks, and effort level.

Your team will discuss and compare estimates until everyone is aligned on a number. Over time, story point proponents claim, this collaborative process strengthens your team’s understanding of the amount of work and improves estimation accuracy for future sprints.

Dev teams started using story points instead of strict hours because they wanted a more flexible and scalable way to estimate tasks. They also wanted an effort metric that keeps them aligned and lets them adapt as needed.

What Is Time Estimation in DevOps?

Time estimation in DevOps helps you evaluate the time required to complete tasks. Story points aim to emphasize complexity and effort, while hours reflect actual amounts of time spent.

Despite story points’ noble ideals, many devs wonder how many hours a story point or three story points is.

We’ll also tackle that one in a second (spoiler alert: you may not like the answer).

For now, understanding the differences between story points and hours is key to improving how your team plans and executes work. 

Decide based on your team’s needs.

For example, you might combine throughput or historical data with story points estimation or hour estimates to make your planning process more accurate. Metrics such as cycle time and work item age can help you validate whether your initial story point estimates align with the progress.

Instead of focusing solely on predictive methods, you can improve your planning with actionable metrics showing trends over time. Using insights like these helps you better match team capacity to workloads and improve delivery over time.

How Many Hours Is a Story Point?

Story points are a relative measure of effort and complexity, not an absolute unit of time. Your team defines the scale, deciding what a 1-point task represents. There’s no universal formula, industry standard, or fixed reference.

While some claim that one story point equals 5-6 hours, this is misleading because story points don’t convert directly to time. Here’s why you should avoid translating story points into hours.

Story Points Are About Relative Effort, Not Exact Time

Story points should help your team estimate the complexity of tasks in relation to each other. For example, if a 1-point task feels simple, a 3-point task might take three times the effort. This method should allow the entire team, regardless of skill level, to agree on effort without focusing on hours.

You lose this relativity if you assign a fixed number of hours to a point. A senior developer might complete a 1-point task in 2 hours, while a junior developer might need 8 hours. Fixing a time value disrupts alignment and leads to confusion.

Abstract Nature Encourages Team Collaboration

Story points are intentionally abstract. The scrum teams that use them want to focus on task complexity instead of time. They’re looking for a metric that fosters meaningful discussions during planning.

If you force a time-based estimate, the abstraction disappears. Your team members might estimate hours first and then convert them into points, which defeats the purpose of story points entirely.

Time and Points Don’t Have a Fixed Relationship

The time it takes to complete a 1-point task varies based on team composition, skills, and task type. Using a fixed conversion, like 1 point = 5 hours, creates an illusion of accuracy that doesn’t match reality.

Instead, focus on metrics like velocity, which reflect your team’s progress over time. For example, if your team completes 20 items in a sprint, you can estimate the timeline for a 5-item task without translating points into hours.

Story Points vs. Hours: PROS and CONS

When estimating work in Agile projects, you typically need to decide between using story points or hours. We don’t favor story points or hours, but we’ll discuss throughput below. 

However, understanding their pros and cons can help you choose the right approach for your team. Below, we’ll objectively break down the benefits and drawbacks of both, with examples to show how they apply in real-world scenarios.

Pros of Story Points

This section acknowledges that story points have some advantages – or at least they do in ideal scenarios, according to their proponents. Let’s see why some teams want to use this metric:

1. The Need for Focus on Complexity, Not Time

Story points aim to prioritize the complexity, effort, and risk of tasks rather than the time they take to complete. This allows you and your team to evaluate work based on difficulty, not individual speed. For example, if one task is a 2-point story and another is a 5-point story, the 5-point task is more challenging, regardless of who completes it.

2. The Need to Account for Team Dynamics

Story points are said to adapt to your team’s specific composition and skills. The relative effort should remain consistent whether your team comprises senior developers or junior members. Using a metric that accounts for team dynamics encourages collaboration across the entire team instead of focusing on individual productivity.

3. The Need to Reduce Emotional Attachment to Deadlines

Time-based estimates can carry emotional weight, especially when deadlines are tight. Story points want to remove this pressure by focusing on the overall measure of complexity, which can lead to more realistic planning and less stress for your team.

4. The Need to Encourage Collaboration

Story points require team discussions to reach a consensus during sprint planning. For example, your team might debate whether a task is a 3-point or 5-point story. Some teams like this process because it ensures everyone understands the work and commits to the plan. The bigger end goal, though, is to build collaboration.

Cons of Story Points

Here’s why we don’t encourage teams to use story points despite the good intentions behind them.

1. Subjectivity

Story points are inherently subjective. Different team members might interpret what a 3-point story represents differently, especially if your team is new to Agile. It takes time and practice to align on consistent story point estimation. Even so, it’s not always as accurate as throughput, for example.

2. Can’t Measure Productivity Accurately

Story points aren’t designed to track productivity or output. For instance, completing 20 story points in one sprint doesn’t guarantee the same amount of work was completed as the last sprint. This can frustrate stakeholders who prefer concrete data like hours or the number of finished tasks.

3. Risk of Misuse

Focusing too heavily on velocity (the number of points completed per sprint) can lead to manipulating the system. Teams might inflate story point values to appear more productive, undermining the method’s purpose.

Pros of Hours

Now, let’s assess the advantages of following a more straightforward time-based metric.

1. Objective and Easy to Understand

Hours provide a clear and universal metric. Stakeholders, especially non-technical ones, find it easier to grasp time-based estimates. For example, saying a task will take 8 hours is more straightforward than assigning it 5 story points. 

2. Real-Time Tracking

Tracking hours gives you an exact picture of how long tasks take and helps you stay on schedule. This can be especially useful when creating detailed project timelines for stakeholders or clients.

3. Versatility

You have different time-based metrics to measure different tasks or parts of your SDLC. For example, cycle time measures how long it takes to complete a task from the moment you actually start it. Lead time also includes the backlog period. You can also use issue-type time investment to measure how much time you spend on each issue (i.e., stories, tasks, bugs) and how long it takes to complete them on average.

Cons of Hours

Some teams move away from time-based metrics for a reason. Here’s their logic:

1. Doesn’t Account for Complexity

Hours focus solely on the duration of tasks and ignore their difficulty or risks. For instance, two tasks estimated at 4 hours might have vastly different complexity levels, making time-based estimates less flexible for Agile projects.

2. Ignores Team Dynamics

Time-based estimates don’t factor in individual skills or team capacity. A senior developer might complete a task in half the time of a junior developer. This creates inconsistencies in your estimations.

3. Encourages Overcommitment

Estimating hours typically leads to rigid deadlines, which can result in burnout if unexpected challenges arise. Your team might overcommit to meet these deadlines and sacrifice quality in the process.

While story points and hours both have their place, they aren’t always enough. So, let’s take a look at a better alternative.

Story Points vs. Hours: The Axify Alternative

At Axify, we believe there’s a better way to approach estimation – one that’s simpler, faster, and more reliable. Instead of relying on story points or hours alone, we focus on throughput or the actual number of items completed in conjunction with time-based metrics.

Throughput removes the guesswork of story points and avoids the rigidity of using just time-based estimates. It provides a more practical and lightweight approach to planning.

Why Throughput Works Better

As Alexandre Walsh, VP of Engineering at Axify, explains:

Throughput focuses on what your team accomplishes. This allows you to predict future performance without requiring them to spend time estimating every task.

For example, suppose your team typically completes 20 product backlog items per sprint. In that case, you can use that data to plan upcoming sprints instead of debating task complexity or assigning story point values.

How Axify Makes Throughput Actionable

With Axify’s throughput graph, you can easily track the number of items completed over a given period. The graph displays trends, averages, and variations, which helps you identify stable delivery patterns and areas for improvement. Whether planning by sprint or week, throughput gives you a clear, objective view of your team’s progress.

Besides, we translate the impact of better throughput into added FTE (full-time employee) equivalent.

Focusing on throughput allows you to simplify your estimation process, reduce planning overhead, and make data-driven decisions with confidence – all while keeping your team focused on delivering value.

Story Points vs. Hours: When to Use Them?

Both story points and hours can serve a purpose, but when should you rely on them? According to Alexandre Walsh, story points can still be helpful for product discovery.

When your team debates whether a task is a 3-point or 8-point story, it reveals gaps in understanding. This process helps you and your team define clearer acceptance criteria and align on what’s expected before starting the work.

However, story points or hours may not be the best choice for capacity planning. Throughput offers a faster and more accurate alternative.

Analyzing the number of items your team typically completes in a sprint or week lets you make reliable predictions about how much work can realistically get done. This avoids the extra estimating effort and allows your team to focus on delivering value.

Using the right method for the situation simplifies planning and improves team collaboration.

Hours vs Story Points: Which Will You Pick?

Story points and hours have their strengths, but neither is perfect for every situation. Story points want to account for task complexity and foster collaboration, while hours provide concrete time estimates for stakeholders. Still, both methods have flaws, mainly when used as standalone metrics for productivity tracking or capacity planning.

With Axify, you don’t have to rely on limiting traditional approaches. Focusing on throughput in conjunction with other DORA and flow metrics helps you get a more accurate, effortless way to plan and track your progress. For example, cycle time and delivery trends in Axify give you a complete picture of your team’s performance.

Don’t waste time debating story points or estimating hours when there’s a better way. Let Axify simplify your planning and help your team deliver more value with less overhead. 

Ready to see it in action? Book a demo today and transform how your team works!