Answer1:
It should be legacy data to SAP. What it means is you want to transfer all the customer and materials and all other information from Older (legacy system) to new SAP system. You can do it using many tools, most noticeably MDMs.
Answer2:
Before installation of SAP, Data maintained by Company is called Legacy Data. At the time of instalation, it is required to transfer Data from Legacy to SAP like Masters (Material/Customer, etc). It can be done in various ways like BDC, LSMW, etc.
What is meant by transfer of data from legacy code
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