Planning using effective velocity

We have been following agile and Scrum in particular for about 2 years in CDC Software.In these two years, we have learnt a few things that are not mentioned in any of the books on agile.

 

All the books say that one needs to look at velocity of a team to figure out how much of a team can complete and plan accordingly. Experience shows that it is not easy. What we need to consider is effective velocity.

 

I believe, even in stories there are two kinds –

• one that is useful to the customer – ex:- fixing defects or providing enhancements. 
• Required to be done but not useful to customer ex:- update sandbox, technical spike,integration testing etc.

 

The velocity of the team in one of the releases read like this – 72,80,102,89 for a total of 343 points. 

If we consider only US that are useful to the customer, our velocity reads like this – 64,58,64,43 for a total of 229 points.

If we take a useful stories as a percentage – 229/343*100 = 66.7%

This lets me define a new terminology – Useful Story Points Percentage or USPP. Sounds like a real term that is widely used in the industry no?

I verified the figures for two previous cadences and the USPP varied between 66 and 75%. Overall we found that the percentage increases if we use a 3 week sprint and reduces when we use a 2 week sprint.

Now, coming to planning,Velocity of a team is supposed to be used by the product owner to plan a cadence. If the team’s velocity is 50 points per sprint, they should be able to finish approximately 50* 4= 200 points worth of user stories in 4 sprints. However, when a product owner creates a backlog, he/she puts in only user stories that are useful to the customer, i.e only enhancements and defects. Hence the team should consider the USPP and take effective velocity into consideration while planning. So, a team can finish only 200 * 0.75 (Velocity * USPP) in a cadence.

So, product owners should take into consideration Effective Velocity of a team while planning for a cadence. I calculated the effective velocity of our team in the last two releases and found that they were very consistent at 57 and 58 points per sprint.Do you know your team’s USPP and Effective velocity?

What do you think about my analysis? Please please do comment