What does 'Velocity' measure in PRINCE2 Agile?

In the context of PRINCE2 Agile, 'Velocity' specifically measures the amount of work a team can complete during a sprint, typically quantified in story points, work items, or any applicable unit of measure related to the work being done. This metric is fundamental in Agile methodologies as it helps teams understand their capacity for future sprints and enables better planning and forecasting.

When teams track their velocity, they can assess how much work was completed in past iterations, which informs their planning for upcoming sprints by providing a realistic gauge of what can be achieved based on historical performance. This not only enhances predictability but also helps in managing stakeholder expectations around the delivery of project features.

Understanding velocity allows teams to make informed decisions about adjusting the scope of future work, thereby improving overall project efficiency and effectiveness. It’s a key metric for Agile teams, as it serves to highlight both productivity and the team's capacity for output, leading to better project management and delivery practices.