ITIL4F Key Concepts of ITIL 4 Practice Question
A small accounting firm decides to subscribe to a cloud-based tax preparation service instead of building and maintaining its own tax software. The firm's partners agree that using this service will reduce the need to hire additional IT staff and lower the risk of software failures during peak tax season. Which ITIL 4 concept does this scenario best illustrate?
⚠ Common exam trap
It's easy for candidates to confuse the transfer of costs and risks with value co-creation; the scenario emphasizes what the consumer avoids, not joint activities.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Transfer of costs and risks from consumer to provider
By subscribing to the cloud service, the accounting firm avoids hiring IT staff and reduces the risk of software failures during peak season. This demonstrates the ITIL 4 concept that service consumption transfers certain costs and risks from the consumer to the provider, allowing the consumer to focus on core activities.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Service level agreement (SLA) management
Why it's wrong here
SLA management involves defining, monitoring, and reporting on service levels. The scenario does not mention any SLA or specific service level targets; it focuses on the decision to use a service to reduce costs and risks. While an SLA likely exists, it is not the central concept being illustrated. The key ITIL 4 concept is the transfer of costs and risks through service consumption.
- ✗
Value co-creation through service consumption
Why it's wrong here
Value co-creation occurs when the provider and consumer collaborate to create value. In this scenario, the firm is primarily consuming a pre-built service to reduce costs and risks; there is no explicit co-creation activity described. While value is realized, the scenario highlights the benefit of transferring costs and risks, which is a specific aspect of service consumption, not the broader concept of co-creation.
- ✓
Transfer of costs and risks from consumer to provider
Why this is correct
ITIL 4 describes that using a service shifts certain costs and risks from the consumer to the provider. The firm avoids hiring IT staff (cost) and reduces the risk of software failures by relying on the cloud provider. This is a classic example of how service consumption removes or transfers costs and risks, allowing the consumer to focus on its core business.
- ✗
Service relationship management
Why it's wrong here
Service relationship management involves jointly managing activities and resources between provider and consumer to ensure value co-creation. While the firm has a relationship with the cloud provider, the scenario emphasizes the reduction of costs and risks through service consumption, not the ongoing joint management of the relationship. The core idea illustrated is the transfer of costs and risks from consumer to provider.
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Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official PeopleCert exam blueprint
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