Mike Lyons breaks down velocity and capacity in agile work. Velocity is what your team actually delivered last sprint, measured in points. Capacity is your guess for next sprint, which might be 40 points but often lands lower once holidays and absences hit.
Sometimes capacity can be confused with velocity so let me, let me provide some clarity there. Velocity is an empirical piece of data based on the actual points we've delivered. Capacity is a guess to what we think we can deliver in the next sprint. We base it on velocity. Sure if we have a 40 point velocity over the last three sprints on average 40 points our capacity should be 40 going forward. We think that's what we can accomplish if there's no holidays people are all going to be here the full team will be working on our program then our capacity is probably the same as our last velocity but it's something we're predicting we're going to do. It's a best guess and we'll load up story points until we hit that capacity now at the end of the sprint when we deliver now that becomes velocity. So maybe our capacity was 40 but we delivered only 30 points. Well that impacts our true velocity because velocity is based on what we did.
