In the 1990s, enterprise resource planning (ERP) was the top IT investment priority in the manufacturing sector. Now IT vendors sense that product lifecycle management (PLM) will be the next bonanza.

PLM is an umbrella concept that covers the creation and documentation of product designs and specifications, their manufacturing processes, and in-service modification until disposal. IT vendors promise it will be essential to industrial users of IT in a connected, digital economy.

However, while users have a short-term interest in, and plans to invest in, PLM, the most interesting developments are likely to occur after this investment has been rolled out. The current focus is on enterprise-wide applications, but users will see they need a new range of industry-wide applications to help optimise the industry network, to provide goods and services more effectively.

Vendors realise that they can win big if they dominate a category. SAP and Siebel Systems may dominate ERP and customer relationship management (CRM) respectively, but the emerging PLM sector is up for grabs. As the field embraces everything from computer-aided design to supply chain management (SCM) and the planning and manufacturing functions enshrined in ERP, there are plenty of contenders.

ERP and SCM vendors position PLM as an add-on module to their core category. Leading ERP vendors, SAP and Baan, have offered PLM modules for several years. In January, Oracle introduced a new collaboration tool. In 1999, i2 acquired Aspect Development, the leader in parts rationalisation. As yet, Manugistics and PeopleSoft have not shown their hand, but the latter has said it is on the acquisition trail.

Even middleware vendors such as the software division of IBM, BEA and Microsoft are getting in on the act, providing infrastructure for workflow and connectivity. "Microsoft is committed to working with partners to deploy Microsoft .Net technology in the PLM market. We currently have several engagements with automotive OEMs," said Chris Ray, Microsoft's global industry director, at the recent National Manufacturing Week in Chicago.

The most active proponents of PLM are the former Cad vendors. IBM created its PLM group to address this market. EDS PLM, formed last year by the merger of UGS and SDRC, two big US-based Cad vendors, offers a focus on services that build solutions based on experience of users such as GM, Ford and Pratt & Whitney.

In February, PTC, another of the big US-based companies in the sector, launched a campaign that aims to establish its leadership in PLM. It presents PLM as "the combination of systems for create, collaborate and control, just as ERP is the combination of systems for finance, manufacturing and distribution," as Bill Berutti, PTC's senior vice-president for business development, puts it.

At Merrill Lynch's recent PLM industry panel, Buzz Cross of Autodesk, the US company best known for its Autocad Cad system, pointed out that there is a huge PLM opportunity in smaller companies. Autodesk wants to do for PLM what it has done for design, and produce point solutions at commodity pricing. The first of these was announced at National Manufacturing Week. It will deliver electronic work instructions to assembly work stations.

In this fluid situation, with several companies from various sides of the manufacturing IT scene vying for leadership, boundaries could become blurred and some software categories might lose their separate identities. The most intriguing suggestion comes from Bernard Charlečs, head of leading French-based PLM vendor, Dassault Systemes. He suggests that, in discrete manufacturing, "SCM will vanish into PLM and ERP."

We can follow the logic. In the process industries you can optimise the supply network without product information. Salt is salt. However, in aerospace, a bolt fastening the engines to a wing has geometry, tolerances, materials strength and a host of other properties that must be taken into account before some one in the supply chain substitutes an alternative bolt.

Whichever company or companies emerge at the top of the PLM heap, there is little doubt that industry is outsourcing more and more design and manufacturing. Successful companies focus on doing what they know best, and finding others who know best for everything else.

As each specialist enterprise in the network gains critical mass, it learns more and drives down costs. However, in the industry network, one enterprise's actions may adversely affect another's, and sub-optimisation is a serious danger.

Research by Cambashi, to be in unveiled on April 23 at its annual seminar in Gaydon, Oxfordshire, will provide a focus for discussions on how the enterprise applications market might develop.

Cambashi sees a future with applications mainly synchronising interactions between enterprises. Possible candidates are: Product marketing: Decision support extracting information about demand from customers and prospects of the network, and synchronising this with information about design possibilities and material costs. Optimisation of resources and processes (ORP): Synchronisation of plans for demand, production, material acquisition, human resources and product distribution throughout the industry network for the product line. Programme management: Monitoring and controlling the acquisition and deployment of resources such as staff, indirect materials, services, capital and plant to implement plans to introduce new products and processes. Management by objectives: Synchronisation of the efforts of the labour force across different industry network partners to act consistently on issues as diverse as business change and projection of brand values.

Of course, those of us who use a desktop PC, a laptop and a palm top, know that synchronisation is not yet an "out of the bag" package. The transition from enterprise-centric applications to industry-centric applications will take a considerable time! Mike Evans is senior partner at Cambashi, the UK-based IT consultancy.