Iteration Planning

Stay committed to your decisions but stay flexible in your approach.

—Tony Robbins

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What is Iteration Planning?

Iteration planning is the first event of the iteration. During planning, the team defines, organizes, and commits to the work for the next iteration. The iteration planning meeting is timeboxed to approximately 90 minutes for a two-week iteration. The team’s backlog has been partially identified and planned during PI Planning. In addition, the teams have feedback—not only from their prior iterations but also from the System Demo, stakeholders, and others. This context informs the iteration planning event, shaping the plan for the upcoming iteration.

What is the purpose of Iteration Planning?

The Agile Team members use the Iteration Planning event to commit to a set of iteration goals for the upcoming timebox. They plan a set of stories they feel they can complete to achieve these goals. 

The business, often represented by the Product Owner or key stakeholders, is involved to validate that the work the team intends to do will move the team and the business in the intended direction.

How does Iteration Planning connect with the SAFe Principles?

SAFe Principle #1: Take an economic view: In every iteration, the Agile Team should decide on the most appropriate work to maximize value for the business, rather than blindly following a predefined sequence. The team is problem-solving, and problem-solving often requires adapting plans as the true nature of the problem becomes clear through working on it.

SAFe Principle #8: Unlock the intrinsic motivation of knowledge workers: The people doing the work are the best equipped to determine how to do it and how much they can complete. The Agile Team members determine how to do the work they face and share with the business and other Agile Teams how much work they can do within the fixed iteration timebox

What is the outcome of Iteration Planning?

The primary outcome is the mutual commitment between the Agile Team and the business to the iteration goals. The team commits to achieving the goals, and the business commits to keeping the goals stable for the duration of the timebox. This event also results in a shared understanding of all necessary internal and external collaborations.

What are the inputs and outputs?

Inputs to iteration planning include:

• Iteration goals are a high-level summary of the business and technical goals that an Agile Team agrees to accomplish in an iteration. These are typically derived from the PI Objectives created during PI Planning, but may also include local insights from the team. While the Product Owner is accountable for ensuring that the iteration goals exist, determining them is typically a collaborative effort.
• Stories are drawn from the team backlog to satisfy the iteration goal. The Product Owner is accountable for ensuring a prioritized backlog of stories. Creating and prioritizing the stories is a collaborative effort among stakeholders and the Agile Team. Stories will include those from the team’s PI plan, identified during PI Planning and tentatively assigned to iterations; new stories that have been identified; and other items from the team’s local context, including defects, refactors, maintenance, and technical debt. Feedback from the System Demos and prior iterations, including any stories that did not meet the definition of done (DoD), will also be considered.
• Capacity is an understanding of how much plannable work the Agile Team can undertake in the Iteration being planned. The team estimates their upcoming capacity using a known historical velocity, based on the average number of story points an Agile Team has successfully completed in previous iterations. This metric serves as a reliable, data-driven starting point for forecasting the team’s capacity and informing the commitment for the upcoming Iteration Planning. They adjust this starting point to account for iteration-specific data, such as public holidays or time off.
  

A successful iteration planning event delivers the following outputs:

• Iteration Goals have been updated to reflect what the Agile Team has committed to as a result of the negotiations that occurred during Iteration Planning.
• Stories, including enablers, have been updated to reflect the team’s intentions as a result of the negotiations during Iteration Planning.  Dependencies with other teams are planned, with stories in each team’s backlog to account for them. Some of these will have emerged through PI Planning. Each has defined acceptance criteria and an estimate, and is recorded in the iteration backlog.

How does the Agile Team prepare for Iteration Planning?

The teams prepare for the event as follows:

• Backlog refinement. Teams usually approach iteration planning with a pre-elaborated team backlog from the backlog refinement sessions held during the previous iteration.
• Close out the previous iteration. The team confirms the stories in the last iteration were completed and accepted. If any remain, they are moved to the team backlog and reprioritized.
• Initial iteration goals. The Product Owner (PO) may prepare some initial iteration goals based on the team’s progress in the PI.

How to run Iteration Planning?

The PO typically starts the event by presenting high-priority stories from the team backlog and the initial iteration goals (if applicable). Many of these stories originated from PI planning, while others are from the team’s local context. The acceptance criteria are then elaborated through conversation and collaboration with the Product Owner and other stakeholders. Next, they estimate the effort to complete each item using relative story points. Based on estimates and value to the business, the Product Owner may reorder the stories.

During planning, the team discusses implementation options, technical issues, nonfunctional requirements (NFRs), and dependencies. Next, the PO and team select the candidate stories based on their available capacity for the iteration. Some teams decompose stories into tasks (optional) and forecast them in hours to confirm they have the capacity and skills to complete them. Near the end of iteration planning, the team sets iteration goals, commits to the plan, and records the backlog on a visible physical or digital Kanban board.

Who attends Iteration Planning?

Attendees of the Iteration Planning event include:

• The Product Owner (PO)
• The Scrum Master/Team Coach
• All additional Agile Team members
• Any subject matter experts, as needed
• Any other stakeholders required, including representatives from other Agile Teams or ARTs.

The Scrum Master/Team Coach typically facilitates Iteration Planning for the team, ensuring the participants stay within the agreed agenda and event timebox.

What is a usual agenda for Iteration Planning?

An example agenda for iteration planning follows (Figure 1), including a description of each item.

During planning, the PO defines the ‘what,’ the team determines the ‘how,’ and ‘how much,’ as follows:

1. Establish capacity – The team calculates its capacity for the upcoming iteration using adjusted historical velocity.
2. Story analysis and estimation – In conversation with the PO, the team selects and estimates the most valuable stories to meet their PI Objectives, addressing local concerns and dependencies, where applicable.
3. Tasking stories (optional) – Some teams break stories down into tasks to further align on the work to be done. This can help the team better understand how stories connect with each other and how they would like to implement them together.
4. Develop iteration Goals – This process repeats until the team is out of capacity. Next, the teams summarize the plan as a set of iteration goals. (Note: Some teams work the other way around; they start with iteration goals and then work on capacity, story analysis, and estimation to support those goals.)
5. Commit to iteration goals – At the end of planning, the Product Owner and team agree on the final list of selected stories, and they revisit and restate the iteration goals. Everyone commits to the iteration goals and the known scope of the stories.

Iteration goals provide clarity, commitment, and information. The commitment to the iteration goals is reciprocal (Figure 2) and serves the following purposes:

• Aligns team members to a set of shared objectives for the iteration
• Focuses teams on meeting their PI objectives and managing dependencies with other teams
• Provides transparency and management information as needed

How are stories estimated?

Relative Estimation of Stories for Planning

Agile Teams use story points to estimate stories relative to each other [2, 3]. The size (effort) for each item is compared to other stories. For example, an eight-point story should be four times the effort of a two-point story. (Note: Refer to the Story article to learn how to write and estimate stories, including practices for whole team estimation and how to split large stories so they can be completed within an iteration.)

Forecasting Team Capacity

The team forecasts its capacity for an upcoming iteration by using its historical velocity as a starting point. The team’s average velocity (completed story points per iteration) becomes more reliable and predictable as they work together. Predictable velocity helps with planning and limits Work in Process (WIP).

Starting Capacity for New Teams

When the team is new, and a historical average velocity is unknown, one method for initially forecasting the team’s capacity is as follows:

1. Give the team 8 points for every team member (developers, testers, etc.)
2. Subtract one point for every team member’s vacation day, holiday, or other non-working days in the iteration.

Figure 3 provides an example of forecasting capacity for a new seven-person team.

Can story estimation be aligned across Agile Teams?

Story points can be aligned (approximately normalized) by teams across the ART, providing a shared basis for capacity forecasting and economic decision-making.

One approach is as follows:

1. Each team finds a small story that would take a day to develop, test, and validate. Call it a ‘one.’
2. Estimate every other story relative to that ‘one.’

Moreover, aligning story points enables a reasonable estimate of costs for features and epics requiring multiple teams’ support.

AI-Empowered Iteration Planning

• AI-Generated Stories and Intent Validation: Use AI agents to generate initial stories and acceptance criteria, shifting the team’s focus to critically validating and refining the output for alignment.
• Predictive and Proactive Capacity Planning: Employ AI to analyze complex factors beyond historical velocity, like non-working days and potential risks, for a more accurate capacity commitment.
• AI-Powered Backlog Prioritization: Implement AI tools to analyze historical data and business goals to suggest an optimal prioritization, allowing the team to focus planning time on implementation rather than manual ordering.
• AI-Drafted Iteration Goals: Leverage an AI agent to draft initial, high-fidelity iteration goals that link the prioritized stories to the PI objectives.

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References

[1] Knaster, Richard, and Dean Leffingwell. SAFe 5.0 Distilled: Achieving Business Agility with the Scaled Agile Framework. Addison-Wesley, 2020.

[2] Leffingwell, Dean. Agile Software Requirements: Lean Requirements Practices for Teams, Programs, and the Enterprise. Addison-Wesley, 2011.

[3] Cohn, Mike. Agile Estimating and Planning. Robert C. Martin Series. Prentice-Hall, 2000