To use the Business Data features such as Business Data Web Parts and Business Data columns in lists, you must define the metadata for the LobSystem object. The LobSystem object is the top-level container for metadata that describes a particular business application. In XML terms, it is the root node that contains all other metadata objects in an application definition.
After you define the metadata for a system and add the application definition to the Business Data Catalog, the entities become available to you in all the Business Data features. Entity Picker will show the entities in the system if you have appropriate permissions and have defined the metadata appropriately.