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SAP Basis - Remote Function Call
What is RFC?
To communicate between SAP systems, there is a need to define a mechanism. One of the most common ways is to define Remote Function Call (RFC Connection) between two systems. By creating a trusted RFC connection between two systems, it allows you to create trusted-trusting relationship between systems wherein, you can communicate and exchange information and data.
There are different types of trusted RFC connections.
Type 3 Connection
This connection type is used to specify connection between ABAP systems. Here, you need to mention the host name and IP address of source system and also the logon information. This is applicable for both type of RFCs, between ABAP systems and external calls to ABAP systems.

Type I Connection
This connection type is used to specify ABAP systems connected to the same data base as the current system. Let us take an example entry name — ws0015_K18_24
ws0015=host name
K18=system name (data base name)
24=TCP-service name
Type T Connection
This connection type helps connect destinations to external programs that use the RFC API to receive RFCs. This can be activated using start or registration.