I eventually got to the bottom of this. It was due to the vRA IaaS server being unable to talk to the DTC resource on my SQL cluster due to both components being in different domains.
If you're interested, I documented the workaround here:
I am also facing the same issue, i am not able to add business group. I changed the settings on Database server to No Authentication Required. However i am still facing this issue. After changing the setting i restarted DB server and IaaS Manager server. However no Luck.
Can you please guide if anything else needs to be done?
Sorry for the late reply, I've been away.
Is the error the same? Are your IaaS server and SQL server in two different domains?
Thanks for reply Mark. I think below configuration help me get away with the issue.
Initially Identity appliance did not have CA signed Certificate and it was using self signed certificate. All other components had CA signed certificate. I redeployed all components with CA signed certificates and then configured Tenants with required settings. This was the only change i did in the environment and did not face the issue again.