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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Dynamics 365 ERP MCP (...
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Answered

Dynamics 365 ERP MCP (Preview) in F&O – Copilot Studio Agent

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Posted on by charanch 88
Hi All, 

I created an agent in Copilot Studio and added the plugin “Dynamics 365 ERP MCP (Preview)” as an MCP server in the Tools section.
Before publishing, I also enabled the Dynamics 365 ERP MCP (Preview) feature in Dynamics 365 Finance & Operations. After enabling it, a form named “Allowed MCP Clients” appeared under System administration → Setup, and my Copilot Studio application was automatically listed there with a client ID (I did not add it manually – it came by default).
After publishing the agent, the intention is that the MCP feature should allow Copilot to perform actions directly in F&O, such as creating purchase orders when a user requests it from the Copilot side panel inside F&O.
However, when I try a command like “Create a Purchase Order for vendor 1001”, Copilot does not execute the action. Instead, it only provides instructions / guidance on how to manually create the PO. This indicates that the MCP execution capability is not working as expected.

But when I test it in copilot studio itself before publish , it worked fine and create a purchase order with the vendor 1001. but it is not working in when i tried in F&O Environment.
 
 
Has anyone successfully enabled actual task execution (not just guidance) using this MCP preview feature?
 
Categories:
Dynamics 365 Finance
I have the same question (0)
  • Suggested answer
    André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 303,105 Super User 2026 Season 1 on at
    Hi charanch,
     
    In case you created a new agent, the Copilot Sidecar in Dynamics 365 F&O is not aware of it unless you extend the Copilot for finance and operations apps agent. 
     
    Anyway, the MCP server is officially not supported to be used within the sidecar, but I got it working. It is at this moment too slow for direct user interactions.
    You can read more about the MCP server setup and how to enable it in the sidecar on my blog. For the new MCP server, you most likely also need to provide instructions in the  Copilot for finance and operations apps.
     
     
     
     
  • charanch Profile Picture
    charanch 88 on at
    Hi @André Arnaud de Calavon , thanks for replying.

    I followed your blog on extending Copilot Studio MCP for finance and operations, but the agent is not performing the task as expected. Instead, it is only providing guidance. It has been one hour since I published the agent in Copilot Studio—does it take more time for the changes to take effect?

     

    I have also completed the required step in Dynamics 365: after publishing the agent, I allowed the connection with the MCP server by opening Connection Manager and entering my credentials. After this action, the MCP should be usable, but the issue still persists.


    https://dynamicspedia.com/2025/10/enable-model-context-protocol-mcp-in-the-dynamics-365-fo-sidecar/
  • Suggested answer
    André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 303,105 Super User 2026 Season 1 on at
    Hi charanch,

    As mentioned, Microsoft is not supporting the new MCP server in the sidecar. I got it working by changing 3 settings in the Copilot for finance and operations app agent.
     
    1. Set the Use generative AI orchestration for your agent's responses setting to Yes.
    2. Change the model to GPT-5 Auto
    3 Use the next details in the instructions:
     
    # Role
    Act as an autonomous data retrieval agent for queries from finance and operations apps.

    There are two types of tools for interacting with finance and operations apps: form tools and API tools.
    - Form tools enable interaction with finance and operations forms in the same way a user would through the UI.
    - API tools allow calling actions defined in custom X++ logic.

    # Objective
    Your objective is to respond to tasks provided by the user. First execute each step of the provided task workflow using your MCP tools. Check if you have achieved your objective after each tool call. If you have not achieved your objective then continue to execute the next step in the task workflow.

    # Form tool usage instructions
    - Typical flow for record creation operations is to find a menu item, open a form, click the New button, find and set values for relevant controls, and save the form.
    - You can use grid filtering to find relevant records for update, delete, or inquiry scenarios.
    - Do not ever ask for menu item types. The find_menu tool groups menu items by their type.

    # Form tool parameter filling instructions
    - Omit optional parameters if no value is provided as input.
    - For menu items, grid columns, controls, and tabs, use the object name (and not labels) when filling the object name in tool calls.
    - (lessThanDate(x:int)) is a valid value for a grid date column filter.

    # Extraction instructions
    - A tool call response can include up to 25 rows of data as form state. Generate a warning if the form state contains 25 rows of data.

    # Action tool usage instructions
    - Use the find_actions and invoke_action tools when prompted to use actions. Otherwise use form tools.
    - Omit optional parameters if no value is provided as input.

    # Reasoning instructions
    - Before each tool call, plan the action.
    - Do not stop reasoning until all tasks are complete or an error is observed that prevents continuation.
    - Do not stop reasoning to ask a user questions or ask for user input.
    - When answering questions about data DO NOT rely on your general knowledge. Use tools to find accurate and precise data.
  • charanch Profile Picture
    charanch 88 on at
    Hi @André Arnaud de Calavon ,

        As suggested, I have applied the following configurations to the Copilot for Finance and Operations agent:
    1. Set the Use generative AI orchestration for your agent's responses setting to Yes.
    2. Change the model to GPT-5 Auto
    3 Use the next details in the instructions:

    still not able to perform the action, is there any thing need to check related to 'billing' or 'roles' .

    Command used in the F&O Copilot side panel:
    Create a purchase order in USMF for vendor 1001 for item 1000 with quantity 10 

    Output I got in F&O

    The released product with item number 1000 is "Surface Pro 128 GB".
    Vendor 1001 is an approved vendor for item 1000.
    There is no existing purchase requisition for item 1000 and vendor 1001 in the system.
    You can proceed to create a new purchase order in USMF for vendor 1001 and item 1000 with a quantity of 10.
    you can create a purchase order with the above specified vendor and item and quantity in usmf
    ☑ Based on official sources
    The released product with item number 1000 is "Surface Pro 128 GB".
    Vendor 1001 is an approved vendor for item 1000.
    You can create a purchase order in USMF for vendor 1001 and item 1000 with a quantity of 10, regardless of whether a purchase requisition existsciteDynamics-365-ERP-MCP-findreleasedproductsciteDynamics-365-ERP-MCP-findapprovedvendors.
    AI-generated content may be incorrect


    Please suggest or guide me where i am lagging.

    Thanks in Advance.
     

  • André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 303,105 Super User 2026 Season 1 on at
    Hi Charanch,

    I tried your prompt which is working for me in my environment. Have you published the changes in Copilot Studio? Are you using the new (preview) MCP server or existing with 13 fixed tools?
  • charanch Profile Picture
    charanch 88 on at
    Hi @André Arnaud de Calavon , Thank you very much for your support .

       The below screenshots contains my custom MCP Agent, which I created in Copilot Studio, I published yesterday after making changes you said. Same prompt I tried in copilot studio itself there it working fine and new PO is created in USMF. Please guide me where I am missing this Agent extension to F&O.


     
  • Verified answer
    André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 303,105 Super User 2026 Season 1 on at
    Hi charanch,

    Thanks for sharing the screenshot. This is helpful. I'm able to see what is the culprit. You created a new agent instead of extending the agent called Copilot for finance and operations apps. This agent is interacting with the sidecar. All other agents you build are not recognized in the sidecar unless you add it as additional agent in the Copilot for finance and operations apps agent.
     
    You can also add the MCP as tool in the Copilot for finance and operations apps agent directly. Then you need to change the settings as I provided before, like the model and the instructions.
     
  • charanch Profile Picture
    charanch 88 on at
    Hi @André Arnaud de Calavon , Thank you v for your kind support.

      Now I am able to perform tasks in my F&O environment with the copilot.

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