Integration of heterogeneous systems in a package (SiP) allows smaller, smarter and more energy efficient products for many applications. Through SiPs, even small or medium-sized enterprises could gain access to the development of technologically advanced, miniaturized products. However, to date, the lack of appropriate design methodologies and flows hinders the efficient development of SiPs. PARSIMO aims at enabling first time right design of heterogeneous SiP, which can contain sensors, MEMS, RF or other parts beside the micro- and nano-electronics. In order to handle complex systems, models and modelling methods will be developed which improve the modelling accuracy of sensitive SiP parts while reducing simulation time by orders of magnitude. In addition, partitioning algorithms will be investigated to enable cost, performance and power optimisation at early design stages. Furthermore, procedures for the direct data exchange to packaging tools will be developed, so that a complete design flow can be established as basis for automated, fast and cost-efficient manufacturing of SiP based products. PARSIMO aims at initiating standardization, which will open the application of SiP technology for innovative products of European SME and industry. The developed design methodology will reduce design time by several months and significantly save development costs. Eight industry-driven demonstrators from the automotive, aviation and wireless communication domains emphasize the relevance of SiP technology for future products and the need for the design methodology addressed in PARSIMO.