Which is NOT an acceptable approach to budgeting in the context of portfolio management?

Question

Options

• ABudgets are devolved to strategic business units for both business as usual (BAU) and change
• BBudgets are devolved to strategic business units for both BAU and change initiatives, with portfolio
• CBudgets are devolved to strategic business units for BAU, but budgets for change initiatives are
• DBudgets are devolved to strategic business units for BAU but budgets for change initiatives

• B
  3% (1)
• C
  94% (31)
• D
  3% (1)

Explanation

Option C describes devolving change initiative budgets to strategic business units (SBUs) without any portfolio-level oversight or control - this breaks a core principle of portfolio management. The whole point of managing a portfolio centrally is to prioritize and reallocate change investment across the organization to maximize strategic value; handing that control entirely to SBUs removes the portfolio function's ability to do so.

Options A and B are acceptable because they either retain some central portfolio influence or pair devolved budgets with portfolio-level visibility and governance. Option D is acceptable because while BAU is devolved (appropriate - SBUs know their operational needs), change initiative budgets remain under portfolio control, enabling strategic prioritization and reallocation.

Memory tip: Think of it this way - BAU belongs to the business, change belongs to the strategy. Portfolio management exists to govern change, so any approach that hands change budgets to SBUs with no strings attached defeats the purpose of having a portfolio function at all.

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