What is the difference between velocity and capacity in Agile Development?

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What is the difference between velocity and capacity in Agile Development?

In Agile Development, velocity and capacity are two important metrics used to measure the progress and predictability of a team's work. While they are related, they have distinct meanings and purposes.

Velocity refers to the amount of work a team can complete within a specific time frame, typically measured in story points or user story units. It is a measure of the team's historical performance and is calculated by summing up the story points of all the user stories completed in a sprint or iteration. Velocity helps the team understand how much work they can realistically accomplish in future sprints, enabling them to plan and forecast their delivery.

On the other hand, capacity refers to the team's availability or the amount of work they can take on in a given sprint. It takes into account factors such as team size, individual team member's availability, planned leave, and any other non-project-related activities. Capacity is usually measured in hours or days and helps the team determine how much work they can commit to in a sprint without overloading themselves.

The key difference between velocity and capacity lies in their focus and purpose. Velocity is retrospective and focuses on past performance, providing insights into the team's productivity and efficiency. It helps the team understand their average speed of delivery and serves as a baseline for future planning. Capacity, on the other hand, is forward-looking and focuses on the team's available resources and constraints. It helps the team make realistic commitments for the upcoming sprint based on their capacity to take on work.

While velocity is a team-level metric, capacity is more individual-focused. Each team member's capacity contributes to the overall team capacity, and it is crucial to consider individual availability and workload when planning and assigning tasks.

In summary, velocity measures the team's historical performance and helps in forecasting future work, while capacity focuses on the team's available resources and helps in making realistic commitments for each sprint. Both metrics are essential in Agile Development as they provide valuable insights for effective planning, tracking, and improving the team's performance.