Before the First Scrum: Velocity

Before an organisation goes Scrum, they're most likely to be following a waterfall paradigm and using Function Points, Lines of Code (LOC), Analogy, etc., for software estimation in hours per task. They'll probably also use Earned Value or Microsoft Project as a means to measure their progress and ultimately, their profitability. In Scrum, story points are generally used as the estimation mechanisms and Velocity is used to measure progress and, indirectly, profitability.

Velocity In Hours

If the Scrum development team chooses to use hours as their estimation mechanism then velocity is easily arrived at: (number of team members * effective hours/day) * number of days in sprint. Using hours has a certain appeal to teams unfamiliar with Scrum and story points but using hours implies a estimation precision that simply doesn't (and never did) exist. Another issue with using hours is the 'User Stories' can read more like the waterfall-ish requirements that preceded them and be of a technical nature. Although these may capture the basic functionality, they may fail to grasp the end users' point of view, give little or no hint of usability, and tend to read like development tasks; telling the development team how to implement the feature.

Unlike estimating in hours, story points are at best only an approximation of the effort required. The Scrum Master should steer the team toward using story points as soon as practical.

Velocity In Story Points

Prior to the first sprint, have the development team define a reference user story. A reference user story is one were the entire development team can reach an agreement on the effort involved in developing the feature, the complexity of developing it, and the risk inherent in it. This can be one of the user stories the product owner has written for the team or can be some small bit of previously implemented functionality that is familiar to the team. In either case, the reference story is usually something that can be completed by the whole team within a day or two. Once the reference user story is established, give this story 2 story points. All other user stories are estimated compared to this 2-point reference story. A story that is assigned a 4 should be twice as much as a 2-point reference user story. A story assigned 1 is one-half as much as the 2-point reference user story. The actual length of time eventually becomes unimportant. Planning Poker is probably the best estimation technique to use when estimating user stories.

All stories considered for the first sprint are estimated by comparison to the reference story. The team selects and estimates stories they believe can be completed to the satisfaction of the team's Definition of Done in the first sprint (see Definition of Done: How to Ensure Compliance). The total count of story points becomes the team's initial estimated velocity.

Velocity Is For The Scrum Team

Once the team has arrived at an estimated velocity, the Scrum Master can then begin using this as a KPI for the team. However, care should be taken to ensure that velocity is not used to compare between teams (see Velocity as a KPI in Scrum). The Scrum Master can track the team's velocity and over time, measure the team's performance (see  Increasing Velocity Vs Stable Velocity).

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Increasing Velocity vs. Stable Velocity

The question often comes up whether a Development Team can reach a point where their sprint velocity becomes stable. I think that velocity may tend to stabilize but it won't be stable until the Develop Team executes its sprint perfectly and nothing new exists for the team to experiment with. Here are some ideas that I believe can help the Scrum Team achieve a stable velocity.

If the Development Team is doing:

• Product Backlog grooming (stories and acceptance criteria are understood and broken down to an appropriate size),
• Small User Stories (each story taking 1 or 2 days depending on how many people work on it),
• Defining acceptance tests before the start of the sprint (understand the acceptance criteria, the scope of testing, and the most probable approach to testing),
• No "unplanned" work in the sprint (e.g. Support calls),
• No unnecessary "manual" work (identify and analyze manual work to see if it's cost effective to automate),
• Pair Programming and/or following a Coding Standard for code review,
• Test Driven Development (TDD),
• Acceptance Test Driven Development (ATDD),
• Continuous integration (new/modified tested code is integrated daily for automatic component/functional/system/regression testing),
• Code Refactoring (to improve the code quality and the overall design),
• Automated Unit Tests,
• Automated Integration/Component Tests,
• Automated Functional Tests,
• Automated User Story Acceptance Tests,
• Automatic Regression Tests (Team is probably not doing good regression testing unless these are automated).

And the Development Team is:

• Cross-functional (has the necessary expertise among its members to take a user story from its initial concept to a fully deployed and tested piece of software within one sprint),
• Working "normal" work hours (Development Team is working at a "sustainable" pace),
• Happy as individuals and as a team (no one "dreads" coming to work),
• Not interrupted or distracted by anyone or anything outside the team (Scrum Master stand guard if necessary),
• Identifying impediments to the Scrum Master quickly (hopefully before there's any impact),
• Not distracted by email (turn off the mail server),
• Not distracted by the phone (have a phone available to the team in a separate room),
• Not adding to its Technical Debt during sprints (adopt a zero introduced defects as part of the definition of done),
• A cohesive entity (has a shared view on the development objectives, the design ideas in the code and what makes for good code),
• Self-organizing (always on the lookout for ways to improve).

And the Scrum Master and Product Owner are:

• Shielding the Development Team from "unplanned" work,
• Shielding the Development Team from outside distractions,
• Removing the Development Team's impediments in a timely manner,

If all the items above are being done then I would say that the Team's velocity will probably be fairly stable.

However, the Scrum Master is responsible for helping the Development Team to improve even when it appears that the Team is doing everything as efficiently as it can. From the Scrum Guide: “The Scrum Master encourages the Scrum Team to improve, within the Scrum process framework, its development process and practices to make it more effective and enjoyable for the next Sprint.” The point being that trying to improve the team's velocity should be the norm – not standing still. To achieve improvements, the Scrum Master should ask the question:  Is the Scrum Team trying new things every sprint to help improve themselves? The Scrum Team should be able to identify how it can improve its velocity by working smarter, not harder.

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Scrum Metrics

There are lots of metrics that could be collected to assess a software development team's competency, success, inventiveness, quality, and quantity of work. To get an idea of what metrics one could collect, take a look at the 185 practices in CMMI for Development. Agile, unlike CMMI, doesn't require "evidence" that engineering practices are being followed and therefore has few metrics that a Scrum Team may collect to measure the success of each sprint. Below are 9 metrics that a Scrum Team might consider using.

1. Actual Stories Completed vs. Committed Stories
2. Technical Debt Management
3. Team Velocity
4. Quality Delivered to Customer
5. Team Enthusiasm
6. Retrospective Process Improvement
7. Communication
8. Scrum Team's Adherence to Scrum Rules & Engineering Practices
9. Development Team's Understanding of Sprint Scope and Goal

To answer the question of who should be collecting metrics and measuring the Scrum Team's success, consider who in Scrum is responsible for the team's success. In describing the role of ScrumMaster, the Scrum Guide states, "The ScrumMaster teaches the Scrum Team by coaching and by leading it to be more productive and produce higher quality products." Clearly it's the responsibility of the ScrumMaster to measure the success of the team if only to increase the team's productivity and product quality. The ScrumMaster could use a spider chart as shown below to track the Scrum Team.

Using a spider chart is an easy way for the ScrumMaster to track and compare results from sprint to sprint.

Below are short descriptions of each metric, how it can be measured, and some of the issues that could lead to a low score. Any additional metrics or comments on these 9 would be most welcomed.

1.  Actual Stories Completed vs. Committed Stories

This metric is used to measure the development team's ability to know and understand their capabilities. The measure is taken by comparing the number of stories committed to in sprint planning and the number of stories identified in the sprint review as completed. A low score may indicate any of the following may need special attention:

• Team does not have a reference story to make relative estimates (see Team Velocity),
• Not every Team member understands the reference story (see Team Velocity),
• Product Owner isn't providing enough information to the development team (see Communication, Development Team's Understanding of Sprint Scope and Goal),
• Requirements scope creep (see Development Team's Understanding of Sprint Scope and Goal),
• Team is being disrupted (see Scrum Team's Adherence to Scrum Rules & Engineering Practices, Team Enthusiasm).

Even if the Team completes the stories they committed to, there are a few things the ScrumMaster should be looking for:

• Team under-commits and works at a slower than 'normal' pace (see Team Velocity),
• Team has one or more 'hero' (see Team Enthusiasm),
• Story commitment is met but the product is 'buggy' (see Technical Debt Management, Quality Delivered to Customer).

2.  Technical Debt Management

This metric measures the team's overall technical indebtedness; known problems and issues being delivered at the end of the sprint. This is usually counted using bugs but could also be deliverables such as training material, user documentation, delivery media, and others. A low score may indicate any of the following may need special attention:

• Customer is not considered during sprint (see Quality Delivered to Customer),
• Weak or no 'Definition of Done' which includes zero introduced bugs (see Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Management interfering with Team-forcing delivery before the Team is ready (see Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Team working multiple stories such that team compromises quality to complete stories as end of sprint nears (see Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Team is creating bugs that reflect their opinion on how things should work rather than listening to the Customer (see Scrum Team's Adherence to Scrum Rules & Engineering Practices, Quality Delivered to Customer).

Even if technical debt didn't increase, here are a few things the ScrumMaster should be looking for:

• Team is not documenting problems found or fixed (see Communication, Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Team is not engaging with Customer/Product Owner during user acceptance testing (see Communication, Scrum Team's Adherence to Scrum Rules & Engineering Practices)

3.  Team Velocity

The velocity metric measures the consistency of the team's estimates from sprint to sprint. Feature story estimates are made relative to estimates of other feature stories, usually using story points. The measure is made by comparing story points completed in this sprint with points completed in the previous sprint, +/- 10% (the Nokia Test uses +/- 10%). A low score may indicate any of the following may need special attention:

• Product Owner isn't providing enough information to the development team (see Communication, Development Team's Understanding of Sprint Scope and Goal),
• Team size is changing between sprints (generally, the core team must be consistent; allowances should be made for absences e.g. vacation, sick),
• Team doesn't understand the scope of work at the start of the sprint (see Development Team's Understanding of Sprint Scope and Goal, Communication, Actual Stories Completed vs. Committed Stories),
• Team is being disrupted (see Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Team's reference feature stories are not applicable to the current release  (see Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Team is doing very short release cycles (< 3 sprints) or doing maintenance work (the Team might consider Kanban or XP over Scrum under these circumstances).

Even if the Team seems to have a consistent velocity, there are a few things the ScrumMaster should be looking for:

• Team under-commits and works at a slower than 'normal' pace (see Actual Stories Completed vs. Committed Stories),
• Team has one or more 'hero' (see Team Enthusiasm),
• Velocity is consistent but the product is 'buggy' (see Technical Debt Management, Quality Delivered to Customer).

4.  Quality Delivered to Customer

In most companies, delivering a quality product to the customer and keeping the customer happy is your only reason for being. Scrum attempts to have the outcome of every sprint provide value to the customer i.e. a 'potentially releasable piece of the product'. This is not necessarily a product that is released but a product that can be shown to the customers as a work in progress, to solicit the customers' comments, opinions, and suggestions i.e. are we building the product the customer needs. This can be best measured by surveying the customers and stakeholders. Below shows a spider chart survey of customers made after the Sprint Review.

The ScrumMaster can document all customer or stakeholder opinions using an easy to read spider chart.

A low score may indicate any of the following may need special attention:

• Product Owner doesn't really understand what the customer wants and needs (see Communication),
• The Product Owner is not adequately communicating the customer needs to the development team (see Communication, Development team's Understanding of Sprint
• Scope and Goal),
• Customers are not involved in the development of stories (see Communication),
• Customer is not involved with defining story acceptance criteria (see Communication)
• Bugs are delivered with the product (see Technical Debt Management).

Even if the customer is satisfied with the sprint product, there are a couple things the ScrumMaster should be looking for:

• The product is 'buggy' (see Technical Debt Management),
• Not all customers and stakeholders are invited, show up, or participate in the sprint review (see Scrum Team Adherence to Scrum Rules & Engineering Practices, Communication).

5.  Team Enthusiasm

Enthusiasm is a major component for a successful Scrum Team. If they don’t have it, no process or methodology is going to help. There are many early warnings signs that left unchecked, can lead to loss of 'enthusiasm'. It's up to the ScrumMaster to recognize these symptoms and take appropriate action for each particular circumstance if the ScrumMaster is to keep the Team productive and happy. Measuring team enthusiasm can be very subjective and is best accomplished through observations during the various sprint meetings; planning, review and daily stand-up. However, the simplest approach is to ask the direct question of the Scrum Team, "Do you feel happy?" and "How motivated do you feel?" A low score may indicate any of the following may need special attention:

• ScrumMaster is taking too long to remove impediments,
• The number of impediments during the sprint was high,
• The team is being interrupted by managers or the Product Owner (see Actual Stories Completed vs. Committed Stories),
• Some team members can't contribute in certain product areas i.e. lack of cross-functional training,
• Team members are working long hours i.e. not working at a sustainable pace (see Actual Stories Completed vs. Committed Stories),
• Internal conflicts between Product Owner and Team,
• Internal conflicts between Team members,
• Team is repeating same mistakes (see Retrospective Process Improvement),
• Team is continually grumbling, complaining, or bickering,
• Team member(s) don't have passion for their work,
• The Team is not being creative or innovative.

6.  Retrospective Process Improvement

The Retrospective Process Improvement metric measures the Scrum Team's ability to revise, within the Scrum process framework and practices, its development process to make it more effective and enjoyable for the next sprint. From the Scrum Guide, "The purpose of the [Sprint] Retrospective is to inspect how the last Sprint went in regards to people, relationships, process and tools. The inspection should identify and prioritize the major items that went well and those items that-if done differently-could make things even better. These include Scrum Team composition, meeting arrangements, tools, definition of 'done,' methods of communication, and processes for turning Product Backlog items into something 'done.'" This can be measured using the count of retrospective items identified, the number of retrospective items the Team had committed to addressing in the sprint, and the number of items worked/resolved by the end of the sprint. A low score may indicate any of the following:

• Team doesn't identify any items for improvement due to feeling there's nothing they can do or it's out of their control i.e. Team not self-organizing and managing,
• During sprint, Product Owner, ScrumMaster, or management discourages work on self-improvement at the expense of feature stories,
• During the sprint, the Team discourages work on self-improvement at the expense of feature stories,
• Team doesn't look inward at their own performance and environment during the retrospective,
• Team is not acknowledging or addressing repeated mistakes (see Team Enthusiasm).

7.  Communication

The Communication metric is a subjective measure of how well the Team, Product Owner, ScrumMaster, Customers, and stakeholders are conducting open and honest communications. The ScrumMaster, while observing and listening to the Team, Product Owner, Customers, and other stakeholders throughout the sprint, will get indications and clues as to how well everyone is communicating. A low score may indicate any of the following:

• The Customer is not actively involved with feature story development (see Quality Delivered  to Customer),
• The Customer is not providing acceptance criteria for stories (see Quality Delivered  to Customer, Technical Debt Management),
• The Team is not providing the acceptance tests to the Customer for review and comment (see Quality Delivered  to Customer, Technical Debt Management),
• The Team and Customer are not running acceptance tests together (see Quality Delivered  to Customer, Technical Debt Management),
• The Customer(s) and other stakeholders are not invited/present at the Sprint Review (see Quality Delivered  to Customer),
• The ScrumMaster isn't ensuring Customers are surveyed after each Sprint Review (see Quality Delivered  to Customer),
• The Product Owner isn't available some portion of each day for scrum team for collaboration (see Scrum Team Adherence to Scrum Rules & Engineering Practices),
• The Product Owner stories do not address features from the Customers' perspective e.g. stories are implementation specific  (see Scrum Team Adherence to Scrum Rules & Engineering Practices, Quality Delivered  to Customer),
• Product Owner isn't providing information on the Customer 'pain' or needs to the Team (see Actual Stories Completed vs. Committed Stories),
• Team is not documenting problems found or fixed (see Technical Debt Management),
• Product Owner doesn't really understand what the customer wants and needs (see Quality Delivered  to Customer),
• The Product Owner is not adequately communicating the customer needs to the development team  (see Quality Delivered  to Customer, Actual Stories Completed vs. Committed Stories)
• Team is not conducting daily meeting  (see Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Scrum Team is not conducting release planning   (see Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Scrum Team is not conducting sprint planning  (see Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Scrum Team is not conducting a sprint review  (see Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Scrum Team is not conducting a retrospective  (see Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Scrum Team is not visibly displaying release burndown chart  (see Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Scrum Team is not visibly displaying sprint burndown chart  (see Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Scrum Team is not visibly displaying stories and acceptance criteria  (see Scrum Team's Adherence to Scrum Rules & Engineering Practices),
• Scrum Team is not visibly displaying non-function requirements that apply to entire sprint or release  (see Scrum Team's Adherence to Scrum Rules & Engineering Practices).

8.  Scrum Team's Adherence to Scrum Rules & Engineering Practices

The rules for scrum are defined in the Scrum Guide by Ken Schwaber and Jeff Sutherland. Although scrum doesn't prescribe engineering practices as does XP, most companies will have several of these defined for software engineering projects. The ScrumMaster is responsible for holding the Scrum Team accountable to these rules and any engineering practices defined. This metric can be measured by counting the infractions that occur during each sprint. A low score may indicate any of the following:

• Management or Product Owner interfering with Team-forcing delivery before the Team is ready (see Technical Debt Management),
• Weak or no 'Definition of Done' which includes zero introduced bugs (see Technical Debt Management),
• Customer is not considered during sprint (see Technical Debt Management),
• Team is creating bugs that reflect their opinion on how things should work rather than listening to the Customer (see Technical Debt Management),
• Team is not documenting problems found or fixed (see Technical Debt Management)
• Team is not engaging with Customer/Product Owner during user acceptance testing (see Technical Debt Management),
• Team is being disrupted (see Actual Stories Completed vs. Committed Stories, Team Velocity),
• ScrumMaster is not protecting Team from disruptions,
• Team's reference feature stories are not applicable to the current release (see Team Velocity)
• Not all customers and stakeholders are invited, show up, or participate in the sprint review (see Quality Delivered to Customer),
• ScrumMaster is not ensuring that the Scrum Team adheres to Scrum values, practices, and rules,
• ScrumMaster is not ensuring that the Scrum Team adheres to company, departmental, and Scrum Team engineering rules and practices,
• ScrumMaster is not teaching the Scrum Team by coaching and by leading it to be more productive and produce higher quality products,
• ScrumMaster is not helping the Scrum Team understand and use self-organization and cross-functionality,
• ScrumMaster is not ensuring the Scrum Team has a workable 'Definition of Done' for stories,
• ScrumMaster is not ensuring the Team has a daily meeting,
• ScrumMaster is not ensuring the Team has the release burndown chart is prominently displayed,
• ScrumMaster is not ensuring the Team has the sprint burndown chart is prominently displayed,
• ScrumMaster is not ensuring the Team has the sprint stories and acceptance criteria are prominently displayed,
• ScrumMaster is not ensuring sprint planning meeting is held,
• ScrumMaster is not ensuring the sprint review meeting is held,
• ScrumMaster is not ensuring the sprint retrospective meeting is held.

9.  Development Team's Understanding of Sprint Scope and Goal

The Team Understanding of Sprint Scope and Goal metric is a subjective measure of how well the Customer, Product Owner, and Team interact, understand, and focus on the sprint stories and goal. The sprint goal is broad and states the general intention of the sprint. The goal is usually an abstraction and is not testable as such but is aligned with the intended value to be delivered to the Customer at the end of the sprint. The sprint scope or objective is defined in the acceptance criteria of the stories. The stories and acceptance criteria are 'placeholders for a conversation' and will not be incredibly detailed. The Product Owner and Customer define the acceptance criteria but the Product Owner alone defines the sprint goal. The ScrumMaster can use the scoring from "Actual Stories Completed vs. Committed Stories" and "Team Velocity" as indications of problem understanding the stories and goal but is best determined through day-to-day contact and interaction with the Scrum Team. A low score may indicate any of the following:

• Product Owner isn't providing enough information to the development team i.e. needs of the Customer (see Actual Stories Completed vs. Committed Stories, Team Velocity, Communication),
• Product Owner is not writing a sprint goal,
• Product Owner doesn't understand what an incremental development approach means,
• Requirements scope creep: Product Owner is adding to the scope of the stories or adding additional acceptance criteria that were not agreed to during planning (see Actual Stories Completed vs. Committed Stories, Team Velocity, Communication),
• Team doesn't understand the scope of work at the start of the sprint (see Team Velocity, Communication).

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Velocity as A KPI In Scrum

A key performance indicator (KPI) is a measure of performance. Such measures are commonly used to help a teams or organizations define and evaluate how successful they are, typically in terms of making progress towards its long-term goals. Velocity for a Scrum team is a key planning tool and describes the quantity of work a team can be expected to deliver at the end of a sprint. From this velocity, the product owner can do release planning to predict when a feature or multiple features can be delivered to within, say, a month. Jeff Sutherland said in his blog, "Story Points: Why are they better than hours?":

"The management metric for project delivery needs to be a unit of production. ... The metric of important is the number of story points the team can deliver per unit of calendar time. The points per sprint is the velocity."

It makes sense that a product owner would use velocity as a means to predict the amount of work a team can deliver in a sprint, assuming the measure (i.e. story point) remains constant and core development team doesn't change. However, velocity is not and should not be the only metric used to measure success of a Scrum team. Some other measures might include:

• Cycle Time (or Lead Time) - The time from when a customer request comes into a process to a time when it has actually delivered to a customer. Good way to measure the whole process, not only development efficiency. With this, you can check how good your flow is.
• Rework - Things which are coming back to the process after they have declared done and delivered i.e. was reviewed during sprint review. Because those things are defects like bugs and misunderstandings in customer requirements, this is a measurement for quality and communication.
• Customer Satisfaction - This may be from the company's customer satisfaction surveys but should also include internal sources e.g. Product Support, Sales, Marketing, and Product Management.

Starting Off With Velocity

When a new Scrum team first starts working together or when a seasoned Scrum team begins a new project, velocity will most likely oscillate, sometimes wildly. This can be traced to the many 'unknowns' that exist. For a new Scrum team, team members will take some time to acclimate themselves to Scrum, user stories, understanding each other, new technologies, and accepting the reality that they can't do nor are they expected to do precision estimates. For an experienced Scrum team on a new project, the unknowns are usually related to technology and the vagueness of the customer requirements. In either of these cases, using velocity as an indicator of when the team becomes 'predictable' can be very useful, especially to the product owner but also to the team when it comes time to commit doing specific user stories in a sprint.

After a few sprints the team's velocity should stabilize and trend upward over time. But what if it doesn't stabilize? Is is because the user stories are 'bad'? The team members are changing? Or is there some other 'smell' getting in the way? If the velocity of the Scrum team is fluctuating beyond that expected for the particular team, I would suggest no more than 15% after 3-5 sprints, the team should use their sprint retrospective to do some analysis to figure out the root cause and identify actionable improvement measures that it can implement in the next sprint.

I would think a flat velocity is better than one trending down but unless there’s no room for improvement, i.e. the team is perfect in every way possible, then I think the velocity trend should be up over time and this is propably how the velocity KPI should be implemented.

The Scrum team should be managing their velocity to ensure its accuracy throughout the project. The Scrum team, product owner, developers, testers, scrum master, might use Mike Cohn's Velocity Calculator Tool which calculates a confidence interval around the median using the Binomial distribution to determine a 90% confidence interval for 'n' sprint velocity values. The target a Scrum team may wish to grow toward is to have the deviation from the mean, average, sprint velocity not to exceed 10%. This is well in line with question 6 of the Nokia Test: Estimate error < 10%.


Resistance to using velocity as a KPI

As with any changes to the development team and product owners, expect some resistance to having Scrum team KPIs including one on velocity. Team members may feel having a KPI that is based on team and not individual performance puts their current situation at risk. The scrum master and managers need to ensure the Scrum team understands that the team as a whole is greater than the sum of its parts and team KPIs measure the strength of the team. Some things that can help the Scrum team accept Team KPIs and a velocity KPI in particular are:

• Allow the Scrum team to set the velocity goals. Usually no specific target velocity is mentioned although there may be words to the effect that the velocity will gradually increase over time. By allowing the Scrum team to set a velocity goal, they'll feel more empowered and in control. For example, a Scrum team doing 18 +/- 10% story points per sprint may target 20 story points per sprint.
• Allow the Scrum team to remove early sprint velocities. When a team first begins using Scrum or when a new project is introduced to the team, sprint velocities may fluctuate greatly. The Scrum team should have the opportunity to remove aberrations to help 'smooth' out their velocity chart.
• Make it clear to each Scrum team that velocities are not comparable between teams. Velocity is very much a localized measure to a specific Scrum team. In addition to different team members with different team 'personalities', projects typically possess unique characteristics in terms of estimating techniques, detail process, technology, customer involvement, etc. As a result, this can make organization-wide analysis very inaccurate.

When is using velocity as a team KPI not advised?

You might want to reconsider using velocity as a KPI in the following circumstances:

• XP: Unlike Extreme Programing (XP), Scrum teams do not allow changes into their sprints; XP welcomes changes to the current iteration which makes using velocity as a team KPI in XP impractical. XP teams would use velocity at the project or release level but not as a metric from iteration to iteration.
• When the Scrum team is doing maintenance work (bug fixing): Unless the Scrum team is quite small, the team will rarely work one bug at a time. Teams doing full time maintenance work should probably look at Kanban rather than Scrum although the daily stand-up meeting should still happen.
• When dissimilar projects are very short: If the Scrum team is working on disimilar projects, i.e. projects where technology or product domain are not related, and are only 1 - 3 sprints long, it's not likely that the velocity would ever stabilize or the the velocity established on the previous project would be applicable. However, very short projects might indicate that the product owner or company doesn't have any long term objectives, especially in highly volatile markets. If this is the case, maybe XP or even Kanban is a better choice.
• When not everyone in the Scrum team is measured: If the scrum master, product owner, developers and testers all on one team are not measured the same then this can lead to either perceived or real conflicts of interest. Product owners write the user stories, developers and testers implement and test against the Scrum teams definition of done, and the scrum master is responsible to teach the Scrum team by coaching and by leading it to be more productive and produce higher quality products. All these factors affect velocity and these people need to be equally accountable.

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