Scaled Agile Framework (SAFe) Lean Portfolio Management Practice Exam

Which aspect is critical when establishing a Lean budget?

1. Evaluating customer satisfaction metrics

2. Monitoring resources allocated to Agile Teams

3. Determining the budget based on previous performance

4. Ensuring flexibility in budget allocations

The correct answer is: Ensuring flexibility in budget allocations

Ensuring flexibility in budget allocations is critical when establishing a Lean budget because Lean budgeting principles emphasize adaptability and responsiveness to change. In a Lean-Agile environment, the focus is not only on fixed budgets but on aligning expenditures with current value delivery and strategic objectives. This flexibility allows organizations to adjust funding based on evolving priorities, emerging opportunities, or unforeseen challenges, facilitating better resource allocation and maximizing the Value Stream's effectiveness. Implementing a flexible budget approach encourages teams to continuously evaluate their performance, pivot as necessary, and embrace innovation without being constrained by rigid financial plans. This adaptability is especially vital in environments where market conditions and customer needs can change rapidly, enabling organizations to maintain a competitive advantage while ensuring alignment with strategic goals.