Any identity management system used in an environment where there are tens of thousands of users must be able to scale to support the volumes of data and peak transaction rates.
The following answers are incorrect:
Increasing number of points of failures.
This is actually a potential negative impact of not implementing an identity management solution. Identity management is meant to decrease cost and inefficiencies that organizations struggle with so that failures can be managed more efficiently.
Users will no longer be able to "recycle" their password for different applications.
This is actually a function of an effective password management system. Consistency and efficiency are maintained by minimizing unique user authentication requirements.
Costs increase as identity management technologies require significant resources.
On the contrary, "When users access multiple systems, they may be presented with multiple log-in IDs, multiple passwords, and multiple sign-on screens. This complexity is burdensome to users, who consequently have problems accessing systems and incur productivity and support costs
The following reference(s) were/was used to create this question:
ISC2 Official Guide to the CISSP CBK 2007, pg 173
"Key management challenges regarding identity management solutions are:" [consistency, efficiency, usability, reliabliity and scalability.] "Scalability: Enterprises manage user profile data for large numbers of people. There are typically tens of thousands of internal users, and hundreds or thousands of partners or clients."