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Software is an increasing and important part of many products and systems. Software, hardware, and system level components have been developed and produced following separate processes. However, in order to improve the quality of the final complex product, requirements and prospects for an automatic integrated process support are called for. Product data management (PDM) has focused on hardware products, while software configuration management (SCM) has aimed to support software development. Several attempts to integrate tools from these domains exist, but they all show small visible success. The reason for this is that integration goes far beyond tool issues only. According to our experiences, three main factors play a crucial role for a successful integration: tools and technologies, processes, and people. This paper analyses the main characteristics of PDM and SCM, describes the three integration factors, identifies a model for the integration process, and pin-points the main challenges to achieve a successful integration of hardware and software development. The complexity of the problems is shown through several case studies.