1. In order to connect to SM you have to install 32 bit Oracle client because SM is 32 bit application. Otherwise, you won't be able to make the connection between SM and Oracle.
2. You have to create an environment variable which you have to point it to directory where the 32 bit client is installed. For example:
Variable name: TNS_ADMIN
Variable value: C:\app\orcl\product\(oracle version) \ (client directory)\NETWORK\ADMIN
After that the issue should be solved and the connection will be successful.
In addition the error message in this situation that you can find in the log should look like this:
"Unable to connect, SQLState=08004 [ORACLE] [ODBC] ORA-12154 TNS could not resolve the connect identifier specified"