The Story Point Conundrum
Estimating Software Projects is a Conundrum.
co·nun·drum
/kəˈnəndrəm/
noun — a confusing and difficult problem or question.
The problem to solve is this: when you work at a company that has a Program Management Office (PMO) and/or is highly regulated, the business partners that sponsor and regulate projects expect accurate estimates for the work you are going to do. They also expect evidence that you are delivering on those estimates.
At the same time, large projects tend to take a long time. It may not take long to deliver working software into production if your team is good, but to "finish" a project — such as a re-platform or a large scope of work — can take months if not years to complete. And over the course of that time, things change. Business priorities change. Technologies change. Your budget will change. The people on your project team will change. The longer a project needs to run, the bigger the challenge with estimating and delivering the software that was promised within that estimate.
How I Approach It
When I run my own teams, I use story points leveraging the Fibonacci sequence: 0, 1, 2, 3, 5, 8, 13, 21. I also tell the team that 1 story point is equivalent to 1 ideal day. An ideal day is a day where there are no interruptions, you are not sick, you are not distracted — a day where you can dedicate yourself fully to working software for eight straight working hours.
That approach is consistent with Ron Jeffries' original intent for story points and, in my most humble opinion, it gives the team a solid and intuitive foundation to work from when doing story point estimation.
The next thing I tell my teams is that ideal days are impossible, and we all know it. There are always meetings. There are always interruptions. So I ask them to estimate based on what they think they can realistically dedicate to the work in a given day. For example, if they think they can get something done in one ideal day but they typically spend half their day in meetings and helping others, they should estimate 2 story points for that story. The math is honest, and the estimates become more useful because of it.
For more on story point estimating, see: The Genesis of Story Points by the Inventor of Story Points - Ron Jeffries