Scaled Agile Framework (SAFe) Lean Portfolio Management Practice Exam

What is an advantage of funding by Value Stream?

1. It is easier to get budget approvals if a Feature takes longer than expected

2. It is easier to calculate resource utilization planning for a PI

3. It is easier to track costs at the project level

4. It is easier to forecast expenses for a PI

The correct answer is: It is easier to get budget approvals if a Feature takes longer than expected

Funding by Value Stream offers several advantages that align the budget more closely with the flow of value through the organization. When a funding model is designed around Value Streams, it emphasizes the importance of delivering value over merely completing projects or initiatives on time. By funding by Value Stream, it becomes easier to manage budget approvals in cases where a feature takes longer than anticipated. This approach allows teams to adapt funding based on the current needs and progress of delivering value. If a feature requires more time or resources due to unforeseen challenges, the funding structure supports this by reflecting the real value being produced, rather than adhering to rigid project timelines or fixed budgets that may not account for necessary adjustments. This leads to greater flexibility and responsiveness to customer needs and market conditions. Understanding this context highlights how this approach enables more informed budgeting conversations that focus on value delivery rather than merely on costs. By fostering a funding mechanism that matches the flow of work, organizations can enhance their ability to ensure that resources are used effectively, ultimately driving better outcomes for both the business and its customers.