The software update can only be done from the center console USB port, I believe.
If the file is not being recognized, try verifying the format of the USB drive. I don't believe that BMW supports NTFS -- it has to be FAT (FAT32 might work also).
2015 X3 xdrive28d
Black Sapphire Metallic/Black Nevada/xLine, Cold Weather, DHP, DA, DA+ w/ACC, Lighting, Premium, NAV, HK Audio, Parking Assistant, Enhanced BT
Previous BMWs: 2000 528i, 2003 540i, 2007 335i Sedan, 2009 335i Sedan, 2012 X3 xDrive35i