Scaled Agile Framework (SAFe) Lean Portfolio Management Practice Exam

What is an output of enterprise strategy formulation?

1. Portfolio plans

2. Portfolio budgets

3. Investment proposals

4. Performance metrics

The correct answer is: Portfolio budgets

The output of enterprise strategy formulation includes defining the direction and focus for resource allocation within the organization, and one of the primary outcomes of this process is the establishment of portfolio budgets. These budgets are crucial as they outline the financial resources allocated to various initiatives and projects that align with the enterprise strategy. By establishing portfolio budgets, organizations can ensure that their financial investments support strategic objectives and prioritize initiatives that provide the most value. This process considers the strategic goals of the enterprise and translates them into actionable financial plans that guide decision-making across portfolios. Other elements, such as portfolio plans, investment proposals, and performance metrics, are also related outcomes, but they derive from the established budgets and strategies rather than being direct outputs of the formulation stage. Thus, while all these components play a role in executing the enterprise strategy, the portfolio budget specifically reflects the choices made during the strategy formulation, making it a critical output of that process.