Microsoft unveiled the Model Context Protocol (MCP) servers for Dynamics 365 ERP and CRM business applications on 20 May 2025. This groundbreaking development enables secure, standardised communication between AI agents and enterprise systems, marking a significant advancement in business process automation.

Transforming Enterprise AI Integration

The introduction of MCP servers represents a major milestone in enterprise functionality, specifically designed to standardise AI agent interactions across Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems. Organisations can now directly connect AI agents to Dynamics 365 Finance, Supply Chain Management, and Customer Service platforms.

According to Microsoft’s announcement, “The Model Context Protocol is an open standard that facilitates the connection of AI agents to various systems, standardising how systems and applications provide context to large language models (LLMs) in agent platforms.” This innovation empowers organisations to build, deploy, and manage intelligent agents more effectively.

Technical Framework and Implementation

MCP operates as a lightweight, open protocol utilising JSON-RPC over HTTP, enabling seamless tool discovery and invocation. The protocol architecture comprises three key components: MCP Hosts, MCP Clients, and MCP Servers, each serving distinct roles in the ecosystem.

The protocol’s enterprise-grade security features ensure robust data protection while AI agents perform user-delegated tasks. This comprehensive approach addresses the growing demand for secure, standardised agentic computing in business environments.

Deployment and Availability

The public preview of MCP server capabilities for Dynamics 365 launched in May 2025, with general availability planned for October 2025. System administrators, developers, marketers, and analysts will receive automatic access to these features.

A significant advantage of the MCP server is its simplified integration of ERP business logic into AI agents. Through a single, standardised protocol, agents can orchestrate actions across multiple systems, including Microsoft Copilot Studio integration with Dynamics 365 finance and operations.

Future Implications and Industry Impact

The marketplace for pre-built, MCP-enabled connectors continues to expand, offering users access to ready-made integrations with various data sources and tools. This development significantly reduces implementation time and complexity.

Microsoft’s commitment to open standards and interoperability positions MCP as a fundamental component of future enterprise computing. The protocol’s flexibility and broad compatibility ensure seamless adoption across diverse IT environments.

As businesses increasingly embrace AI and automation, the Model Context Protocol stands to become an essential element of modern business application architecture, enabling enterprises of all sizes to harness AI capabilities effectively.

News Source: Microsoft Dynamics 365 Blog