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There's indeed a lot of debate in choosing between ideal hours or story points when it comes to Agile Planning. Even though each procedure has its own merits and demerits, it's certainly not possible to follow both methods at the same time. Therefore, in case you're wondering which one would be the optimal technique for your Agile Planning, then you've definitely arrived at the correct juncture.

What do you mean by Story Points?

Story points can be defined as the units of measurement that assist in estimating the overall amount of effort required to develop a certain feature. It should be realized that each point should be assigned to a certain relative value and these values will help in providing the entire size of the User Story. Once the User Story size has been calculated, you can divide the same using the team's velocity, which will help you obtain the number of iterations the project will require. In that way, you'll be able to determine the overall length that a project might require to be completed.

Generally, numbers from the Fibonacci series (1, 2, 3, 5, 8, and so on) are used for the estimations. In the beginning, the team will be using their first impressions & intuition to perform the estimate. Then the team members with the lowest & highest scores have to justify their scores. Then after the second estimation round, the highest score is taken into account.

Story Points estimation include:

• The overall amount of work that needs to be done.
• The overall complexity of the project or work that is to be done.
• The uncertainty or risk that might be involved in doing the work or project.

Example of Story Points

Project Manager: Let's add this cart icon to the main webpage. Team, are you ready for estimations? Go!

Paul: 2

Jennifer: 3

Scarlett: 5

Amber: 8

Facilitator: Paul, why did you give it a 2? And Amber, why did you give it an 8?

Paul: It's just a cart icon. It's easy to do.

Amber: The cart icon needs to be added to all the webpages.

Facilitator: Okay. One more time for your estimations. Go!

Paul: 2

Jennifer: 3

Scarlett: 2

Amber: 3

Facilitator: Okay. Looks like we are settling between 2 and 3. Is everyone okay with giving 3? Great. 3 is the final size.

What do you mean by Ideal Hours?

Alternatively, ideal hours is a similar concept that is utilized especially when estimates are made, that are time-based, to develop work items. It refers to the time that would be taken to complete a certain given project or task assuming there are no unplanned problems or zero interruptions.

Since this technique makes some assumptions that are grossly optimistic, the overall accuracy of ideal hours is oftentimes inversely proportional to the duration estimate.

However, the variability is a lot less because time is the same everywhere on Planet Earth. Moreover, the overall functionality cost and expected ROI (Return on Investment) becomes a lot easier to predict for the Project Manager.

Ideal Hours estimation include:

• Measuring the amount of work that can be completed by a single team member within an hour.  
• Measuring the amount of time that might be required for testing.
• Combining the work & testing hours together for a total estimate.

Example of Ideal Hours:

Project Manager: We need to add this cart icon to the main webpage. How long would it take?

 Dev Team: Close to two hours.

 Project Manager: What about the testing process?

 Dev Team: One hour.

 Project Manager: So, the total is three hours, right?

 Dev Team: Yes.

Estimation, be it ideal hours or story points, is extremely vital and if often overlooked in Agile Development Environments. Planning is necessary to estimate the effort scope required in a project, which is essential to set expectations regarding how long the project might take to be completed.

The following are some of the ways how estimation by using methods such as ideal hours and story points can help the team:

1.Chance to learn

When the estimation procedure takes place, the whole team will get involved in course correction, which will be beyond their skill sets. The members of the team will naturally come forward to defend their overall story estimates, thereby challenging the estimations made by the other members of the team. As a result, a constructive debate will arise. Each team member will get valuable inputs from one another and therefore the chance to learn something new.

2.Chance to identify alternatives

There's no doubt that estimations will give rise to alternatives because all the members of the team will be brainstorming for ways to justify their given estimations. More alternatives mean the chance to try out more solutions or different approaches to reach the end goal. This will lead to flexibility and versatility within the entire team, while also the chance to think out-of-the-box sometimes.

3.Chance to improve the estimation capability

Not every team member will have the ability to make the correct estimations. But, there is always a room for improvement. When a project estimation is done, everyone should agree on the same. And if someone doesn't, then that person should have to explain their reasons behind the same. Once that person explains the reasons, the whole team will provide their feedback (either for or against), which will help in enhancing the estimation capability of that specific team member.

Story Points Vs Ideal Hours Which One Is Better?

Why are story points better?

Story Points Merits

1. Story points always play to the strengths of humans. Usually, when it comes to estimations, human beings are really bad at estimating values. But, when it comes to looking at relative values, their estimation power increases. For instance, if you ask a person the price of a mobile phone, he or she might not be able to tell. But, if you ask that same person to tell the costlier one between two mobile phones, he or she will likely be correct.
2. When the story points of a project are to be determined, high-level discussions take place between every member of the team. Such a kind of discussion helps in fostering a better team atmosphere and better collaboration.
3. Story points help in accounting for the differences in experience between the team members. Moreover, there is a lack of stress involved with time-ticking.
4. Story points can be described as something abstract because they are generally used for the measurement of relative size. This will help team members to estimate the project in a much more accurate manner.

Even though the overall amount of time taken may differ from one team member to another, the entire size of the task will remain the same across all the team members. Therefore, by performing a size estimation, any variations in the team's productivity can be avoided or ignored.

Story Point Demerits

• If the team is entirely new to the concept of story points, they might not be comfortable performing any estimation for the project. Over time that might change, but for the initial moments, things can go less effortlessly. 
• When developers are being pushed or crunched to accomplish more objectives continuously, they will be working at their maximum capacity. As a result, the team members may try to inflate the story points in the subsequent projects, which may lead to a deceitful environment.
• It can be difficult for people who are not involved in the project to make story point comparisons with the timed reality. Therefore, it can become challenging to understand for managers, clients, investors, and the like.

Why are the ideal hours better? 

Ideal Hours Merits

• When ideal hours are utilized, stakeholders and managers of the company will have a better idea of the time estimation. Therefore, a higher understanding and communication will be involved between all the parties, which can lead to a higher success rate for the project.
• During the first few team meetings for the project, the team members might not be comfortable using story points for estimation. Using ideal hours will seem much more intuitive, which can make the team members comfortable when making time estimations according to the scope of the project.

Ideal Hours Demerits

1. When performing estimation using ideal hours, most teams out there forget to factor in the overall team's experience with that specific technology or project. For example, if a project takes the team five days to complete in the beginning, the same time would not be required later down the line once the team gets comfortable with the task. As a result, the effort taken will be lesser and therefore the estimation will become inaccurate.
2. The team can easily underestimate or overestimate the time that might be taken to complete, especially for bigger tasks. This is because problems or issues might crop up in-between the project period, which can mess up the estimation.
3. There's always the stress of ticking time and if the task isn't completed within time, it can lead to disorganization within the whole team.
4. Not every team member will have the same level of productivity. One team member can complete the task within five hours while another can complete the same task within three hours. Such discrepancy complicates the ideal hour calculations. Moreover, this is also why ideal hours don't promote the same level of collaboration and teamwork as story point estimation.

Conclusion

After going through the above-mentioned pros and cons for ideal hours and story points, we believe that story points would be a better choice. Story points provide a relative measurement of the overall size of the project, thereby providing a better and more effective measurement. Furthermore, with story points you can expect to foster a team-based environment because it accounts for the differences in individual productivity, thereby taking the pressure off the overall estimation process. Although ideal hours are better for communication and intuitiveness, story points are the clear winner when it comes to the Agile development process.

References:

1.https://www.scrum.org/resources/blog/story-point-vs-ideal-hour-it-generation-gap-issue

2.https://rubygarage.org/blog/3-reasons-to-estimate-with-story-points

3.https://softwarebrothers.co/blog/story-point-vs-hours/#time-effort-estimations