To add an Office 365 SharePoint site as the destination, simply use the following procedure:
Right-click the root SharePoint Server and select Add New SharePoint Site.
Enter the project name and site address.
Click 'Find Site Collection' to enumerate the complete site collections.
Now provide the Office 365 SharePoint site in the 'Central Admin URL' and provide admin login credentials.
Note: It will enlist all the web application URLs present on the selected server.
When not using 'Find Site Collection' option, then simply add project name and provide the URL of Office 365 site in the Site Address textbox.
This is how you can add Office 365 SharePoint site in the destination pane.