When trying to retrieve update sets and testing the connection under 'update sources' from target to source, it fails with error "authentication to the remote instance failed".
Source instance is configured for SSO and SSO credentials can not be used for making web service calls between instances.
Customers can enable LDAP authentication in combination with allowing inbound network access for ServiceNow instances to authenticate using LDAP credentials. In this case mid server can not be used for LDAP authentication.
Please find the documentation below for setting up LDAP authentication.
Optionally, local credentials on an admin account can be used for the authentication.