New Community Contribution: Improving Portfolio Outcomes with Real Options

By Rebecca Davis

“Never test the depth of the river with both feet.” This saying reminds us of the power of approaching uncertainty through smaller steps of progress, discovery, and adjustments. This idea is integral to SAFe and can be a key tactic to seize opportunities for innovation and growth while decreasing investment risks.

Advancing Business Agility requires engagement from all business segments, including HR, Finance, Marketing, etc. Emerging capabilities are needed in finance to enable financing Value Streams and pivot or preserve decisions while developing large initiatives that require a strong ROI (Return On Investment). This new community contribution, “Improving Portfolio Outcomes with Real Options,” describes how this can be achieved using an established financial evaluation calculation called Real Options. 

Integrating Real Options and the Scaled Agile Framework (SAFe) introduces a powerful approach to decision-making that offers a dynamic perspective on value-driven development. Real Options enables organizations to make more informed, adaptive, and financially sound choices by recognizing the inherent uncertainty and volatility in today’s rapidly changing business environments. In the context of SAFe, this approach provides a strategic advantage by offering the flexibility to pivot, invest, or divest in initiatives as market conditions evolve, fostering a responsive and market-driven approach to achieving Business Agility.

Authors Joe Vallone and Claus Hirzmann introduce the ability for finance teams to partner closely to bring clarity to the financial progression of Epic MVPs, enabling learning through uncertainty to be an advantage rather than a deterrent. Our hope is that this community contribution continues to create partnerships that accelerate innovation in today’s rapidly changing world.

Build your future!

– Claus Hirzmann, Joe Vallone, and the Framework Team