Business Purpose
A logical system definition is needed for communication between systems. Once the logical system is defined, it will be used for system identification, data distribution, and cross-system communication. For example, when you create a sourcing project, you will add a logical system when providing information about company codes and plants. This information will be later used in central contract creation and a local contract will be created in chosen system.
Technical Explanation
Creation of a logical system is necessary for cross-system communication. First, you need to verify the logical name in transaction SCC4 and copy the entry in transaction BD54 for logical system definition.