Information technology service management (ITSM) has become the prevalent management approach to the provision of IT services worldwide. Researchers and practitioners, however, still lack an understanding regarding through which mechanisms and in which strategic contexts an ITSM capability contributes most to information systems (IS) effectiveness. Grounded in a service-dominant logic, we hypothesize that ITSM capability contributes to IS effectiveness through sustaining the alignment of the IS function with the business and contingent upon organizational IS strategic conservativeness. Data collected from 256 organizations confirms that direct effects from ITSM capability are mediated by IS-business alignment and strengthened by IS strategic conservativeness. Our findings provide evidence for a co-occurrence of value co-creation and value facilitation mechanisms in internal IT service relationships and for a greater value of ITSM capability in stable strategic contexts. Overall, our results contribute a novel understanding to the service literature of the distinct mechanisms and the facilitating contextual contingencies of value creation in IT service relationships.
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