Here are the list of steps to be followed to setup a RFC connection from SAP ERP system to BizTalk server.
1. Setup a RFC destination of Type T using transaction code SM59. Under the technical settings use Registered Server Program radio button.
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2. Update the SAPRFC.ini file to add the RFC Destination we have created
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3. For this example I have created a simple RFC function module inside SE37 TCODE.
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4. Created a sample BizTalk Orchestration which would accept the messages from above RFC Function module and sends the response back to SAP