Velocity variance

About this report

The Velocity Variance report shows the variance in velocity, that is, velocity of a sprint divided by the velocity of the previous sprint, for individual teams participating in a specified program. Velocity is calculated as the number of Level of Effort (LOE) story points completed by a team in a sprint. This report is generated by selecting a target program and team.

The report displays the data in the form of a line graph. The variance values display on the Y axis, with sprints on the X axis. You can choose to include data for the last 3, 5, or 10 sprints.

This report is designed to give a portfolio manager, scrum master, team leader, or release train engineer a high-level understanding of whether a team is on track and completing consistent amounts of work, thus maintaining a consistent velocity. It is beneficial to review the report with team members during pre- and post-PI meetings, general team meetings, and during sprint review meetings.

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Prerequisites

1. PI must exist in the system and be tied to a program. 
2. Sprints must be created and tied to a PI. 
3. Teams must be created and tied to a program. 
4. Stories must be created and tied to a sprint. 
5. Tasks must be created and tied to stories. 

How are report values calculated? 

• Variance = velocity of sprint divided by velocity of previous sprint
• Velocity = sum of all LOE points completed by a team in a sprint

How to interpret this report

The ideal variance is 1, noted by the horizontal green line in the center of the graph. For example, if the velocity for a current sprint is 40 LOE points, and the velocity of the previous sprint was also 40 LOE points, the variance value would be 1 (40 divided by 40 = 1).

The two yellow lines represent variance values of 1.2 and 0.8, and are less than optimal; the red lines represent variance values of 1.4 and 0.6, which indicate a warning that the variance is in the danger zone. For example, if the velocity for a current sprint is 40 LOE points, and the velocity of the previous sprint was 30 LOE points, the variance value would be 1.3 (40 divided by 30 = 1.3).

It is a common misconception that you want velocity to continually increase. The sign of a healthy, stable organization and team is that velocity stays steady. If you see many peaks and valleys in variance, this shows that you do not keep your teams stable (for example, you engage members in other work continuously), or that you do not estimate your work well (whether the stories are too large or estimates are wrong). Wide fluctuations indicate a poor level of predictability in scope of work that can be expected to be delivered. An ideal team velocity variance remains steady.