Scaled Agile Framework (SAFe) Lean Portfolio Management Practice Exam

How does a strategic portfolio review contribute to decision-making?

1. It helps to eliminate unnecessary project costs

2. It clarifies the alignment of initiatives with strategic goals

3. It primarily focuses on resource allocation

4. It assesses team performance across departments

The correct answer is: It clarifies the alignment of initiatives with strategic goals

A strategic portfolio review plays a crucial role in decision-making by clarifying how various initiatives align with the organization's strategic goals. This alignment is essential because it ensures that the projects and programs being pursued contribute to the overall mission and vision of the organization. During a strategic portfolio review, stakeholders evaluate whether the current portfolio of initiatives is effectively supporting strategic objectives. By understanding how each initiative fits within the broader strategy, organizations can prioritize investments, allocate resources more effectively, and make informed decisions about where to direct their efforts. This systematic evaluation enables informed adjustments or reallocations to maintain alignment with evolving strategic priorities, ultimately fostering greater organizational agility and responsiveness to market changes. While other aspects such as eliminating unnecessary costs, focusing on resource allocation, and assessing team performance are important, they are not the primary contributions of a strategic portfolio review. Instead, the core function aligns initiatives with strategic goals, enabling better outcomes and ensuring that the portfolio serves the long-term objectives of the organization.