The Best Practices of Team Capacity Planning in Scrum Teams

by Ivana Janakieva

9 min read·

What Is Team Capacity Planning in Agile?

Team capacity planning is what helps a company to decide what and when to prioritize.

By understanding the capacity scrum, no matter at what level, one can focus on the highest work priority and make staff adjustments that would ultimately align with the strategic goals. 

One of the most important benefits one gets from capacity planning is to be able to always know whether or not you have the people or the team needed to complete the work. 

So by prioritizing your resources by the highest value work, you will be able to keep all of the teams aligned with the strategy without having under-or overutilization problems because, in this way, you'll be completely minimizing them. 

How Is Team Capacity Different from Team Velocity?

The capacity and the velocity teams in ideal conditions work together in conjunction. Team velocity is measured while capacity is estimated and uses the velocity as a starting point. 

Team velocity in software development teams measures what the team can accomplish in a given period of time whereas capacity uses velocity and estimates what the team can get done in the next sprint.

How to Use Capacity and Velocity Together? 

The best way you can use them in tandem is to find the velocity from your last sprints, which would later be used to adjust just the average based on the expected current vantage point capacity.

And although many of the sprints very well may be above or below the average, the key here is to keep using the existing information and make sure the prediction is as accurate as it can get. 

Team Capacity Planning is precisely the thing that ends up helping teams understand what can be accomplished and how many story points within a sprint a team can handle.

Why Is Capacity Planning Different From Traditional Project Planning?

Almost all organizations in today's marketplace are in a so-called transition period where more and more workgroups are adopting some new ways of work. For example, for some companies, the mix of Agile and structured projects will work out great. 

Also, there are studies behind this that show how much Agile has helped companies manage their changing priorities and improved project visibility.

Furthermore, Agile has led to companies having greater work transparency. However, to have effective team capacity planning, the rapid adaptation of the company is vital.

Although some companies are keener to the hybrid model of work, more and more companies are beginning to acknowledge the power of team capacity planning.

Many companies started using it instead of conventional resource planning methods, mainly because the agile methodology is much flexible when it comes to producing changes to the product or process. The agility of the methodology allows team members to identify the need to explore or try something other than what was planned.

Besides this, the team members can easily see improvements from beginning to end. In building healthy working surroundings, that level of transparency plays a key role. Agile also enables constant feedback, which helps to obtain better results.

Team capacity planning has many advantages, and here we will mention some of them.

  • By working very closely with the team and project, customers get a strong sense of ownership.
  • The customer has frequent and early opportunities to see the work being done, make decisions and request changes throughout the development project.
  • If an application is a priority to be released on the market, Agile methodologies can produce a basic version of operational software to be completed in successive iterations.
  • User-centric development.

Steps of Capacity Planning

Here are the steps of an efficient and safe Team capacity planning process:

  1. Look at your current SLA levels.
  2. Analyze your company's existing capacity.
  3. Calculate the future needs.
  4. Identify if there is any opportunity that would strengthen the company.
  5. Make the capacity recommendations.
  6. Take action.

What Is the Difference Between Capacity Planning and Resource Planning?

To answer this question, we first must know what resource means in project management

In short, anything needed to complete a task or a project can be freely labeled as a resource. "Anything" can be money, materials, and also people. The strategic approach of managing those resources, more conveniently called assets, is called resource management. 

Both Resource planning and Capacity planning in Agile Scrum are processes that help businesses leverage the resources they have available to meet their organizational goals. 

Capacity Planning

Capacity planning strategies are the process in which the company's future business requirements are anticipated. Moreover, Agile capacity-based planning is vital to ensure that the resources and all the necessary skills are being available to the client and their business demands are met. 

Resource Planning

The efficient resource management needed for a task or a project to be completed is actually involved in the Resource planning. The main "job" of the resource managers is to take care of the existing conflicts and ensure that there will be no new conflicts on the rise over the project's life cycle.

The managers of the resources actually control everything, from task reallocation and deadline changes to taking all the measures necessary to ensure all the project goals have been met and the workers are being used correctly, i.e., not overutilized or underutilized. 

Best Practices and Approaches of Team Capacity Planning

Prioritize Work Based on Strategy

The first thing one needs to start when trying to achieve the on-strategy delivery is to align all the work with the corporate strategies and focus on the stuff that's prioritized. 

Now, what should you begin with? 

Start with the broader missions, goals, and strategies while slowly working your way down to the more granular tactics levels.

Please, keep in mind that in Capacity planning strategies, the strategic themes are the provider of the proper mechanisms that align all the business strategies and, in the end, make them all work.  

Analyze Your Current Capacity

One of the most challenging aspects of capacity planning is the simple goal of getting a realistic view of your team's capacity.

Now, what is truly interesting is that if we'd done things within the traditional methodologies margins, the capacity would be understood through having a look at the individual's working hours minus the time-off and unplanned work or some common interruptions and administrative activities that all of us can undertake. 

Contrary to the traditional methodologies, Capacity planning in Agile scrum seems to simplify this by using velocity.

So, as we've mentioned before, velocity is actually how much work the team is delivering, which is usually measured in story points.

Of course, we'd naturally be considering all the day-to-day interruptions and absences in this way. However, the managers and the teams would have to have in mind some seasonal activities, as well as some long-term personal time off that the individual might take, just like holidays, pregnancy leaves, and so on. 

This analysis approach's goal is to understand the Capacity scrum in more than one term - long term, medium term, and short term so that you'd be able to create a more accurate plan and be sure that you'd be able to meet all current and future requirements. 

Watch for Distractions

It's vital to monitor the process just to make sure that there are non-related tasks that can sneak in and make a mess by distracting your team from what actually is important. By monitoring this loss of focus and distraction from the higher value, you'd be able to help your team to continue working at the right pace. 

Capacity Planning Is an Ongoing Process

Safe team capacity planning isn't a one-time process but an ongoing one. You have to understand that teams and individuals are living forms and are shifting just as your projects are also shifting. That's why it's important to make your team capacity planning an ongoing process and keep everything at its place while the Capacity planning strategies will be helping you out to get the maximum of your team. 

Conclusion

To sum up, the process of determining the amount every work team fulfilled in a given sprint and regarding the finalization of the product backlog items is called team capacity planning for sprints. Here are the main points.

  • The Capacity planning in Agile scrum is the maximum value every work team can provide in a specific sprint. The Safe team capacity planning process will avoid the over usage and the under usage of the personal and bring in the game optimal and efficient delivery. 
  • The main goal of team capacity planning is to maintain the balance between the story points done in the sprint and the team capacity. Although team capacity planning will never be perfect, the important thing is that you can ensure that your company is getting the most in terms of value from the team. 
  • Agile team capacity planning plays a huge role in decision-making. No matter what the work methodology is, we are just balancing out the capacity and demand in light of constant change.

The most important thing one needs to take on from this post is that Capacity planning in Agile scrum is an ongoing process involving constant monitoring of the company's existing capacity and comparing it to what would be the company's future requirements.

Also, the short-term (3-4 months) roadmap linked to the company's KPIs will support capacity planning and keep the company secure. 

The digital transformation caused a break in the paradigm of labor. New profiles that require qualified and flexible professionals with continuous education are being developed more and more. Undoubtedly, to ignore these new jobs means to fall short of the strategy and lack the competitive advantage of human capital.

FAQs

Q: What is capacity planning?
Capacity planning aims to optimize all the resource constraints and get a hold of all gaps to maximize investment decisions' value. The goal is to use the right resources and teams in the right way and do all the work that has to be done to get the max of the value delivery and productivity.
Q: What is team capacity and velocity?
Team capacity is a measure of the total workload a team can sustain over time. This is not about how fast they work, but rather how much they can do in a given time period. Team velocity is a measure of how much work a team can accomplish in one time period (usually one week). Velocity should be higher than capacity for sustainable productivity improvement.
Q: How is capacity planning different from resource planning?
Capacity planning and resource planning are two important functions in IT. While they both involve a similar goal—tracking and organizing the availability of the necessary resources in an IT system—they have their own set of advantages. Capacity planning is used to make sure that there are enough resources to meet the demands of a business. Resource planning, on the other hand, allows you to plan for future demands such as new hardware or software.
Ivana Janakieva
Ivana Janakieva
Agile Technical Writer

Ivana is a Project Manager who is passionate about Agile. She excels at understanding that every project is different and each requires unique care and expertise to deliver maximum value and satisfaction.

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