Product:
IBM Cognos TM1 10.2 server (version 10.2.5000.367-0)
IBM Cognos TM1 package connector (version 10.2.5000.14-0)
IBM Cognos BI 10.2.1 Fix Pack 1 (version 10.2.5001.156-0)
IBM Cognos BI 10.2.1 Fix Pack 2 (version 10.2.5002.78-0)
Windows 2008 R2 server

Symptom:
After installation of TM1 Package Connector (tm1pc_10.1.1_bi_10.2.1_win_ml.tar) on the same computer where you have TM1 Architect and Framework Manager installed, the option inside TI Turbo Integrator dialog for “IBM Cognos Package” is greyed out and not select-able.

You only get this issue on the Developer computer where you have also installed frame work manager for Cognos BI 10.2.1 fix pack 1.
If there is only TM1 installed or there is not a Cognos BI fix pack installed, it will work.

Solution:
Uninstall TM1 package connector from your computer.
Leave the Framework Manager and other software still installed.
Run installation of TM1 Package Connector again, but
Select a new folder, like:
C:\program files (x86)\ibm\cognos\c10pack
And also remember to set a new shortcut folder name to “IBM Cognos 10 Package Connector”
Finish the installation.
Then go to start menu and open Cognos configuration from “IBM Cognos 10 Package Connector”.
Update the environment tab with values for you Cognos Gateway server;
http://BIgatewayname.domain.com:80/ibmcognos/cgi-bin/cognosisapi.dll
And for you Dispatcher URI for external applications set it to;
http://BIservername.domain.com:9300/p2pd/servlet/dispatch
Save the settings.
Exit Cognos Configuration.
Start TM1 Architect
Click on a TM1 application to login.
Inside a TM1 application right click on “processes” and select “create new process”
Try to click on “IBM Cognos Package” – if it works, then you have succeeded.

TM1 architect use the windows variable TM1_PACKAGE_CONNECTOR to find the installation files its needs, so this variable should be a system variable. You can type SET in the command prompt on the server to check its current value, it should be
TM1_PACKAGE_CONNECTOR=c:\program files (x86)\ibm\cognos\c10pack\bin

You need to replace the URL/PATHS with the correct values for your servers.

Note: This will only work with 32 bit version of TM1 Architect.

And you must REBOOT the server after installation of the Package Connector.