When the Portal and SQL Server are on the same machine, by default, the web application uses the ApplicationPoolIdentity when accessing SQL Server. (This is a system account which has been specifically created for IIS).
Therefore, we need to grant IIS APPPOOL\<virtual directory name> (which is the detail application pool of the Portal web application) access to the SQL Server. For example: IIS APPPOOL\SyncsortCapacityManagementPortal if you chose the default virtual directory name during installation.
Note: When adding this user to SQL Server do not click Search. If a search
is executed, it will resolve to an account of ServerName\AppPool
Name, which will not work.
For further information, see: https://learn.microsoft.com