Tel: +4 9-24 I -$07632, email: joeresse8ert. rwth-aachen. deDue to the advances in VLSI technology complete digital communication systems can today be implemented on single application specific VLSI circuits. The optimum choice of implementation parameters, such as signal wordlengths, is a critical design task since poor parameter choices can lead to costly designs. On the other hand, the high number of parameters to be selected span a large search space that is very difficult to handle. We present a new systematic approach to parameter selection in this paper and apply this approach to the design optimization of a decoding system for a concatenated coding scheme. Two convolutional codes are concatenated and both are decoded by soft decision decoding. This is facilitated by means of soft output decoding of the inner code. The performance of the scheme is better than that of the well known standard code with 64 states for moderate BER at equivalent implementation cost. The proposed coding scheme is thus an attractive alternative whenever high bit error rate performance is a prerequisite, e.g. for digital HDTV transmission.