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.
2. Update the SAPRFC.ini file to add the RFC Destination we have created
3. For this example I have created a simple RFC function module inside SE37 TCODE.
4. Created a sample BizTalk Orchestration which would accept the messages from above RFC Function module and sends the response back to SAP