ITIL4F Key Concepts of ITIL 4 Practice Question
Which TWO of the following are examples of costs that a service consumer may transfer to a service provider?
⚠ Common exam trap
Many candidates confuse 'cost transfer' with 'cost reduction' or 'outsourcing of all costs,' mistakenly selecting employee salaries (Option E) as transferable, when ITIL 4 specifically distinguishes between transferred costs (direct service components) and retained costs (consumer's own operational expenses).
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
✓
Hardware procurement costs
Hardware procurement costs are a direct expense that a service consumer can transfer to a service provider through a service agreement, where the provider procures and manages the hardware as part of the service. Option D is correct because software licensing costs included in the service represent a cost that the consumer avoids paying directly, as the provider bundles the license into the service fee. This aligns with ITIL 4's concept of cost transparency, where the consumer shifts capital expenditure (CAPEX) to operational expenditure (OPEX) via the provider.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Marketing costs for the consumer's products
Why it's wrong here
This option is incorrect because marketing costs associated with the consumer's own products or services are distinct operational expenses of the consumer's core business. An IT service provider delivers IT capabilities to support the consumer's business, but does not typically assume responsibility for the consumer's direct market-facing expenditures. These costs remain with the consumer as part of their sales and business development budget, entirely separate from the IT service agreement.
- ✗
Office rent for the consumer's premises
Why it's wrong here
This option is incorrect because the consumer's office rent represents a fundamental overhead cost for their physical operational presence, not an expense typically transferred to an IT service provider. While IT services might be delivered to these premises, the service provider does not generally absorb the consumer's real estate costs. Unless the IT service explicitly includes comprehensive facilities management for the consumer's physical infrastructure, these remain a direct cost to the consumer.
- ✓
Hardware procurement costs
Why this is correct
This option is correct because a service provider frequently procures, owns, and maintains the necessary hardware infrastructure (e.g., servers, storage, networking equipment, or even end-user devices) required to deliver an IT service. These capital expenditures are then bundled into the service charges, effectively transferring the hardware acquisition and lifecycle management costs from the consumer to the provider. This approach allows the consumer to avoid large upfront investments and focus on outcomes.
- ✓
Software licensing costs included in the service
Why this is correct
This option is correct because service providers commonly manage and pay for the software licenses essential for delivering their IT services, such as operating system licenses, database licenses, or application-specific licenses. By including these costs within the service fee, the provider simplifies software asset management and ensures compliance for the consumer. This transfers the burden of license procurement, renewal, and auditing from the consumer to the service provider, offering a predictable operational expense.
- ✗
Employee salaries for consumer's internal IT team
Why it's wrong here
This option is incorrect because the salaries of a consumer's internal IT staff are direct operational costs borne by the consumer for their own workforce. Even if an external IT service provider is engaged, the consumer's decision to maintain an internal IT team means they retain the financial responsibility for those employees. These costs are not typically absorbed or reimbursed by an external service provider, as the internal team's existence represents a deliberate choice by the consumer regarding their IT operating model.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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