Estimate inflation

Definition

Estimate inflation is when the estimate assigned to a product backlog item (usually a user story) increases over time. For example, today the team estimates something will take five points but previously they would have called it three points.

There are a few possible causes of estimate inflation. One of the most common, though, is excessive pressure on the team to improve or deliver more points per sprint. This often comes from bosses or possibly stakeholders outside the team who are pushing the team. Velocity becomes a really tempting (but bad) metric in these cases and teams are pushed to demonstrate that they’re going faster by increasing velocity.

When a team is under pressure to increase velocity, team members will often start to round estimates up during story point estimate meetings (often done with Planning Poker). For example, consider a team that is debating whether a particular story is three or five points. They’re having a legitimate debate about this.

At some time during that discussion, one or more people will remember the team is under pressure to increase velocity. And some might shift in favor of calling the story five points instead of three.

How to Prevent Estimate Inflation

The best way to prevent estimate inflation from occurring is to always compare the item being estimated against two (or more) previously estimated product backlog items.

So, when a team thinks about estimating a story as five points, they would first compare that story to two other stories--ideally one smaller and one larger. In deciding if a story should be estimated as five points, they would compare the story to a three-point story and think, Will the effort to do this new story be a little more than this three-pointer?

They would next compare that story against an eight-point story. And they’d want to see if the story felt appropriately sized as five in comparison to one of those. When an item being estimated is compared to two or more previously estimated items, it helps ensure the internal consistency of the estimates.

Comparing prevents estimate inflation because the use of two comparisons helps point out when estimates are beginning to inflate.

To see this, consider the team that is trying to decide between estimating a story as either three or five. Remembering they are under pressure to increase velocity, they decide to call it a five. And it may legitimately seem just a bit bigger than some other three-point stories.

But, when the team triangulates that story against another five or an eight, they’ll most likely realize that the story is not really a five.