Hi Raja
I am doing ABAP SPS upgrade using SUM tool and I am also getting the same error you got in the SUM phase PREP_INPUT/INSTANCELIST_PRE.
I have CI and one application instance. SUM tool keep on asking the sidadm password. I tried creating a local sidadm user on both servers with the same password. But it didn't work for me.
I created the local sidadm user as per below note
1715038 - <SID>adm user can not be verified in a distributed environment
Is there any special action when you create the local sidadm user and continuing the upgrade.
Regards
Bimal