Velocity is a method of measuring our product team’s pace of product development. It’s a simple calculation:
Total number of story points completed over the prior 3* sprints / 3 sprints = velocity.
*Typically, 2 - 4 sprints is the optimal window for calculating a product team’s velocity.
Simply put, velocity is the average number of story points the product team can complete each sprint.
Velocity, therefore, is a valuable number to use in sprint and release planning. It informs decisions to make on what should or shouldn’t be included in a sprint or release. It assists the product team with understanding where they are at in a sprint. It can help peg estimated release dates and estimates for long-term releases.
Velocity is not a metric of a product team’s success or failure — completing the “sprint goal” is, as well as identifying if the team is properly iterating to support feedback from users of the product. It serves the product team as a valuable tool to help make the most efficient and effective decisions of the team’s time, moving forward.