Microsoft MCP Server Fully Exposes Dynamics 365 to AI Without Middleware, Integration Work

Welcome to this Cloud Wars Agent and Copilot Update. In these discussions, I’ll be analyzing opportunities, impact, and outcomes possible with AI; today’s focus is Microsoft’s Model Context Protocol (MCP) Server for Dynamics 365.

Highlights

00:41 — The MCP Server provides a structured map of the ERP system, eliminating the need for hard-coded connectors or API calls, enabling AI models to interact with ERP data programmatically. The initial limited preview exposes only a small set of predefined tools, primarily around vendors, purchase orders, and master data items.

01:56 — The new version of the MCP server is dynamic and can automatically discover the entire OData surface in finance and operation. It can identify and expose OData entities, including custom entities, securely to AI agents, allowing them to call these entities using natural language. This new functionality unlocks thousands of ERP operations, eliminating the need for manual setup of connectors, filter strings, JSON parsing, and trial-and-error to find the correct entity. Example: it can handle a query for open purchase orders, building queries, executing them, and returning clean, structured data governed by existing security roles and permissions.

03:24 — The new server works across various platforms, including Copilot Studio, Teams, Power Apps, and the Copilot sidebar inside Finance and Operations (F&O). The MCP-based experience fully exposes Dynamics 365 ERP to AI without middleware, removing layers integration complexity and making F&O an AI-ready platform.

04:13 — The new MCP-based experience requires the latest preview build, version 10.0.46 of Dynamics 365 Finance and Operations. Users need to be on the first release program to try out the new features, but the general availability is expected by the end of December.

More MCP Insights:

• Microsoft Unleashes AI Capabilities in Dynamics 365 MCP Server
• How Protocol Update Strengthens MCP Security
• Cisco Secures MCP Servers With Multiple Scanning Engines
• Microsoft Deepens MCP Support With New Power Apps and Dataverse Servers
• Why MCP Is Becoming the Universal Interface to Enterprise Data

AI Agent & Copilot Summit is an AI-first event to define opportunities, impact, and outcomes with Microsoft Copilot and agents. Building on its 2025 success, the 2026 event takes place March 17-19 in San Diego. Get more details.