Agile Business Analysis Strategy and Initiative Horizons 3 — Questions and Answers
Question 1: An agile organization wants to balance innovation investment with core business maintenance. Which framework explicitly categorizes this balance as Horizon 1, 2, and 3?
- SAFe Portfolio Kanban
- McKinsey Three Horizons of Growth (Correct answer)
- Cynefin Framework
- PESTLE Analysis
Correct answer: McKinsey Three Horizons of Growth
McKinsey's Three Horizons of Growth explicitly categorizes investments into core maintenance, emerging growth, and future options.
Question 2: When an initiative's business case is reviewed and found to have a negative NPV but high strategic alignment, what should the business analyst recommend?
- Reject it immediately based on NPV alone
- Escalate for executive decision, highlighting the strategic value beyond financial return (Correct answer)
- Approve it without further analysis
- Convert it to a maintenance initiative
Correct answer: Escalate for executive decision, highlighting the strategic value beyond financial return
Strategic value can justify investments with negative NPV, but the decision requires executive judgment with full transparency about trade-offs.
Question 3: In SAFe, what is the primary purpose of the Portfolio Vision?
- To assign story points to epics
- To articulate the future state the portfolio is working toward and guide investment decisions (Correct answer)
- To document team velocity targets
- To define sprint goals for each ART
Correct answer: To articulate the future state the portfolio is working toward and guide investment decisions
The Portfolio Vision describes the intended future state and aligns investment decisions across the portfolio with organizational strategy.
Question 4: A BA is facilitating a capability gap analysis. What is the MAIN output of this analysis?
- A list of completed initiatives
- Identification of current vs. desired capabilities and the gaps that initiatives must close (Correct answer)
- A release schedule for the next quarter
- A backlog of technical debt items
Correct answer: Identification of current vs. desired capabilities and the gaps that initiatives must close
Capability gap analysis compares current state capabilities to the desired future state, revealing which gaps initiatives must address.
Question 5: Which metric BEST indicates whether a portfolio's strategic initiative mix is appropriately balanced across time horizons?
- Team velocity
- Percentage of budget allocated to Horizon 1 vs. 2 vs. 3 initiatives (Correct answer)
- Number of epics completed per quarter
- Customer NPS score
Correct answer: Percentage of budget allocated to Horizon 1 vs. 2 vs. 3 initiatives
Tracking budget allocation across horizons directly shows whether the organization is over-indexed on core operations or under-investing in future growth.
Question 6: An enterprise strategy calls for entering a new market within 18 months. What horizon does this initiative most likely occupy?
- Horizon 1
- Horizon 2 (Correct answer)
- Horizon 3
- Horizon 0
Correct answer: Horizon 2
Horizon 2 covers initiatives that are emerging, typically 1–3 years out, requiring significant investment before generating reliable returns.
Question 7: A business analyst uses a rolling wave planning approach for a long-horizon initiative. What is the PRIMARY benefit?
- It eliminates the need for a business case
- It allows detailed planning for near-term work while keeping future plans at a higher level until more is known (Correct answer)
- It fixes the scope of the initiative upfront
- It removes the need for stakeholder engagement
Correct answer: It allows detailed planning for near-term work while keeping future plans at a higher level until more is known
Rolling wave planning progressively elaborates details as uncertainty reduces, avoiding premature commitment to uncertain future details.
Agile Business Analysis Strategy and Initiative Horizons 3
An agile organization wants to balance innovation investment with core business maintenance.
Which framework explicitly categorizes this balance as Horizon 1, 2, and 3?