Scaled Agile Framework (SAFe) Lean Portfolio Management Practice Exam

What is an advantage of Lean Portfolio Management over traditional budgeting processes?

1. Increases ability to budget the deliverables in the portfolio roadmap

2. Provides effective control transparency of budgetary spending

3. Provides effective financial control over investments with less overhead

4. Increases ability to adjust the portfolio's annual budget

The correct answer is: Increases ability to budget the deliverables in the portfolio roadmap

The advantage of Lean Portfolio Management over traditional budgeting processes primarily lies in its ability to provide effective financial control over investments with less overhead. Lean Portfolio Management emphasizes continuous value delivery and prioritization based on the actual progress and changing conditions within the portfolio, rather than relying on static budgets that may become outdated quickly. By streamlining the approach to managing financial resources, Lean Portfolio Management facilitates a more agile response to changes in market demands or project performance. This involves employing techniques such as ongoing funding and decentralized decision-making, which not only reduces the bureaucratic overhead commonly found in traditional budgeting but also enhances alignment with strategic objectives. This approach fosters a more dynamic interaction between budgeting and project execution, allowing organizations to prioritize investments based on real-time data and value delivery. Consequently, financial control is maintained effectively without the cumbersome processes typically associated with traditional budgeting methods.