Scaled Agile Framework (SAFe) Lean Portfolio Management Practice Exam

What is the effect of ineffective estimation on Lean Budgets?

1. Increased accountability

2. Wasted resources and potential delays

3. Enhanced team collaboration

4. Improved customer relationships

The correct answer is: Wasted resources and potential delays

Ineffective estimation in the context of Lean Budgets can lead to wasted resources and potential delays. When teams are unable to accurately predict the time, effort, and resources required for a project, it creates a ripple effect throughout the organization. First, if tasks are underestimated, teams may commit to deliverables that are unrealistic, which can result in rushed work or unmet deadlines. This adds strain on team resources and can lead to chaos in managing priorities and timelines. As resources are allocated to projects based on inaccurate estimations, some projects may consume more budget and time than anticipated, creating inefficiencies. Additionally, projects that are overestimated may lead to missed opportunities where resources could have been better utilized elsewhere. This misallocation not only impacts the specific project in question but can also affect overall portfolio performance as funds and personnel are tied up unnecessarily on projects that do not deliver value effectively. Effective estimation is crucial for optimizing Lean Budgets, enabling teams to make informed decisions regarding investments and resource allocation, ensuring that projects align with strategic goals while minimizing waste and delays.