Hi,
the hardware based failover is based on a serial cable (limited in length).
So it is very likely you will prefer the network failover configuration.
Since TMOS v11 you will need to configure self IPs per unit for heartbeat, mirroring and config sync.
These self IPs should belong to a dedicated VLAN and have to be in port lockdown "allow default" mode, as they open up services for intra device-group communication.
As a backup for the heartbeat the management IPs (system -> platform) can be used.
After providing the required local self IPs in the device settings you will establish device trust and configure a device-group of type sync-failover with network failover enabled.
Join both units to the new device-group, run initial sync. Mostly done ...
Before you get into this make sure your hostnames are set properly (system -> platform) and you have configured unique device certificates (system > device certificates). Both units should be in sync with NTP.
Cheers, Stephan