I had some trouble with understanding what are story points in Scrum and I couldn't find using Google easy to understand explanation so now that I have some more knowledge about it I will try to explain in myself.
When people use Scrum than effort is estimated in either story point or ideal days. I found some blog posts where people prefer story points for Product Backlog Items and hours for Tasks but in this article I will just focus on explaining Story Points.
Typical issue with measuring effort in days is that it depends on the developer. It might take 2h for Senior developer or 10h for Junior Developer, it is quite big difference which doesn't help with estimating time or cost of projects.
The solution is to use relative effort and let me explain that using examples:
Let's say developer is asked to import some data. Junior developer says it will take 10h and Senior developer says it will take 2h.
Developer is asked to import data but this time it is more complex. Junior developer says it will take 5 days, Senior developer says it will take 1 day.
Notice the pattern. Junior developer needs x5 more time to complete the work but that is actually irrelevant as we want to measure effort in relative units so to do that we change easy task to 1 point and complex one to 4 points. For Junior developer 1 point is approximately 10h and for Senior 2h. Finally Junior & Senior developer can agree on effort :)
Now you can estimate (or measure) how many points a senior or junior developer can burn within one week (on average). So let's say your Senior Developer can burn 25 points on average a week and Junior Developer can burn 5 points.
With this knowledge you can estimate either length of Sprint or Number of Story Points you can burn during one sprint.
You have 60 points you need to burn. How long should be the sprint if you have Senior and Junior Developer working on it?
I did simple math and the answer is 2 weeks (25 + 5 = 30 a week x2 = 60 Points)
Let's say you do 3 weeks sprints during your project (generally you should stick with similar length of Sprints) so you need to calculate how many story points you can burn.
Again let's do simple math and the answer is 90 points (25 + 5 = 30 points x3 weeks = 90 points)
I hope you now have more knowledge about story points and see benefits of using it for estimating how many long it will take to completer either sprint or even the entire projects! which does help to calculate team cost. After writing this article I finally understood TFS Scrum book that gave an example of team that would use word calories instead of story points and would say "We can burn 500 calories during this Sprint"
NOTE: Tasks are different and using Story Points (or calories) might not be such a good idea and my reason behind that is that tasks are actually assigned for specific developer so you do know effort in hours and additionally you can refine it in this more granual level so it makes your estimations more accurate but again story points should be used to translate to hours first and then minor refinements should be applied.