Open SharePoint designer 2010 and connect to your site
In the Navigation area select “External Content Type”
From the top menu select “External Content Type” to create a new one
In External Content Type information specify the needed information
Click on “Click here to discover external data sources…”
Click “Add connection” and select “SQL Server”
Fill Database Server Name and the database name then click “Ok”
In Data Source explorer, you should see your database
Now select an object from your database that you want to use it as external source (in this example we will select table)
Right click on the table and select “Create All Operations”
In the wizard page select your table identifier
And click Next then finish
In the external Content type operations you should see a result like the image below
Now you are done and you need to create your external list, to do that
Create External List
Click on “Create Lists & Forms” in the top ribbon
Click yes to save your external content type
Type List Name, select “Create InfoPath Form” check box and click “Ok”
And the SharePoint designer will create your list with full operations
When you browse the new external list you might face the following error:
“Access Denied by Business Data Connectivity”, if you face this error don’t be panic and read the below solution
Solution: Permissions on the BCS Entity
To fix this problem all what you need is to go to Central Administrator -> Application Management -> Manage Service Applications -> Business Data Connectivity Service -> [Your External Content Type] -> Set Permissions
Now you can configure your entity permission by giving the right user the right permission as giving the administrator a full permission (Edit, Execute, selectable in Clients and set permission).
You should be able now to browse to the new list and use it as if it is totally impeded in the SharePoint.