Although manufacturing firms support economic development, wealth creation and poverty alleviation, a dismal performance has been reported. In Kenya, the share of gross domestic product (GDP) from manufacturing sector has remained below 10 per cent while its growth rate remained at about 5 percent in the last 10 years. This has been attributed to low innovation and technology diffusion. This study examined the effects of IT capability on firm performance. The study was anchored on Resource Based View, and Dynamic Capability Theory. Positivism philosophical approach, descriptive and explanatory research design were adopted. Using stratified and random sampling techniques, a sample of 222 manufacturing firms from Nairobi City County, was obtained. A semi-structured questionnaire was prepared and used for data collection. To ascertain reliability, Cronbach’s alpha coefficient measure of 0.875 was obtained. Research experts confirmed validity of the study instrument. The data was analysed through descriptive statistics to condense the survey data. To test hypotheses, inferential statistics was used. The results showed a positive significant effect of IT infrastructure capability (B=0.247, p=0.005 < 0.05), IT personnel capability (B=0.226, p=0.044 < 0.05), IT management capability (B=0.187, p=0.018 < 0.05) and IT reconfiguration capability (B=0.291, p=0.001 < 0.05) on performance. The study findings also exhibited a 49.2 per cent explanatory power of IT capability on firm performance. Study findings provide a framework for improving firm performance. Subsequently, firm managers should create interventions on IT capability to enhance and sustain superior firm performance.

Manufacturing firms have reported dismal performance even after heavily investing in information technology (IT). Notably, this sector plays an important role in driving economic development by stimulating and sustaining high productive growth boosting employment opportunities for semi-skilled labour and building the country's' competitiveness. The manufacturing sector, respond to the surrounding conditions through deployment of appropriate strategic capabilities to overcome challenges, enhance their competitive position and sustain higher performance. Firms respond to the surrounding conditions by adjusting their purpose and shape through deployment of appropriate strategic capabilities to overcome the challenges enhance competitiveness and sustain superior performance. Several firms have made a huge investment in information technology (IT) to obtain economic value and to cope up with the ever-changing business environment. However, the economic value has not been attributed to IT personnel capability although IT personnel capability is one of the main drivers of sustainable firm performance. This paper applied cross sectional survey in collecting data from IT managers/ Chief Information Officers/ ICT directors drawn from manufacturing firms within Nairobi City County. The researcher used multistage sampling to identify regions where manufacturing firms are concentrated. A questionnaire was administered to 222 firms. A total of 140 valid responses were obtained.