AI agents are reshaping retail, but an agent is only as powerful as the systems it can reach. Connecting agents to commerce often means building custom integrations for every data source and channel, an approach that is brittle, slow, and challenging to scale. The Model Context Protocol (MCP) changes this. MCP is an open standard that lets a platform expose its capabilities once, enabling supported AI agents across multiple surfaces to call them in real time.

At NRF 2026, we introduced the Dynamics 365 Commerce MCP server as the foundation for agentic commerce. Adding to the MCP framework established by the Dynamics 365 ERP MCP server, the Dynamics 365 Commerce MCP server brings retail-specific business logic into the agentic ecosystem: product discovery, inventory availability, pricing, discounts, checkout, store operations etc.

Dynamics 365 Commerce MCP server now in Public Preview

Retailers and partners can now build agents that support the entire commerce lifecycle, operate across the full commerce value chain, and deliver secure, governed, context-aware, and consistent experiences.. Early feedback has been encouraging, with customers and partners expressing strong interest in AI-driven commerce capabilities.

Michael Hill, one of Australia’s leading jewelry retailers, has already been exploring the potential of the Dynamics 365 Commerce MCP server.

 “Our early experience with  testing Dynamics 365 Commerce MCP server has been promising. Having access to this type of tooling creates a practical way to introduce AI-driven innovation at the pace retail demands, simply by layering intelligence over existing commerce platforms.”

 — Shaun Morley, Group Retail and Omnichannel Systems Manager, Michael Hill

AMICIS Solutions is a Microsoft Solutions Partner specializing in commerce solutions for retail, hospitality, convenience, and aviation. Their early adoption of the Dynamics 365 Commerce MCP server reflects their commitment to building the next generation of agentic commerce experiences.

“Getting early access to the Dynamics Commerce MCP server has been a fantastic experience for us as a Microsoft partner. We used it to build a voice-driven commerce agent that puts natural-language intelligence right on top of Dynamics 365 Store Commerce, so store associates can search the catalog, manage carts, look up customers, and handle everyday POS tasks just by talking.”

— Gudni Vilmundarson, Director, Amicis Solutions

The opportunity: Commerce anywhere, powered by AI agents

Retail is at an inflection point. Consumer expectations have moved beyond omnichannel. Shoppers increasingly expect seamless, connected interactions where they move effortlessly from social-commerce discovery to mobile checkout, in-store pickup, curbside fulfillment, or voice-activated reordering. At the same time, retailers face sustained margin pressure, volatile demand, and labor constraints requiring making decisions and executing more continuously.

Retail Frontier Firms are responding by adopting an operating model where AI agents work alongside people, sensing, deciding, and acting across the retail value chain. The Dynamics 365 Commerce MCP server is the foundation that makes this possible.

Conversational commerce experiences

Commerce is increasingly incorporating conversational experiences. Customers want to text, talk, or chat their way to a purchase through messaging apps, voice assistants, social platforms, or GenAI interfaces like ChatGPT and Copilot. This shift demands a commerce engine that compatible agents, on any surface, can call in real time. The Dynamics 365 Commerce MCP server addresses this demand by giving every AI agent standardized access to the full commerce stack, from product discovery and pricing to cart, checkout, and order management, reducing the need for custom connectors in many scenarios or point-to-point wiring. Build once and extend across multiple channels.

Store operations reinvented

Store associates today can spend significant time navigating complex systems and not enough time with customers. The Dynamics 365 Commerce MCP server changes this by giving AI agents real-time access to commerce operations, so associates interact with store systems through natural language instead of memorized workflows. With Dynamics 365 Commerce MCP server-powered agents, associates can complete returns, exchanges, and order lookups using voice without stepping through multi-screen POS flows. Clienteling agents bring together purchase history, preferences, and loyalty data for personalized service. Receiving, fulfillment, and replenishment tasks become simple spoken requests. The result: faster onboarding, fewer errors, higher associate productivity, and more time on the floor where it matters most.

Autonomous agents that act across the commerce value chain

Beyond assisting humans in real time, the Dynamics 365 Commerce MCP server enables a new class of autonomous agents that can operate with configurable automation and approval workflows when a customer or associate initiates an action. Agents can spot restocking needs from B2B distributor demand and sales signals, notify teams in advance, and recommend or trigger reorder actions based on configured rules and approvals. They can detect when prices drop and reach out to a customer with a personalized offer. They monitor inventory levels across locations and reposition stock based on predicted demand before a shortage occurs. Subscription and replenishment agents maintain cadence without manual intervention, adjusting quantities and timing based on actual usage. For retailers, this means enabling more proactive and automated commerce operations: orders placed, customers retained, and inventory optimized with minimal disruption to your workers.

Commerce + ERP: One MCP foundation for the retail value chain

The full power of MCP emerges when Dynamics 365 Commerce and Dynamics 365 ERP MCP servers work together. The Dynamics 365 Commerce MCP server handles the selling side: product discovery, pricing, checkout, and order management. The Dynamics 365 ERP MCP server handles what comes before and after: merchandising, demand planning, procurement, inventory allocation, fulfillment, and financials. Pricing agents can read trade agreements, cost structures, and margin targets from the Dynamics 365 ERP MCP server to dynamically set and adjust prices across channels without manual intervention. Inventory agents monitor real-time stock levels across warehouses and stores, initiate replenishment when inventory falls below defined thresholds, and deliver accurate availability promises to customers at the point of sale. Post-purchase, agents track fulfillment, process returns with automatic ledger updates, and reconcile payments across both systems. Together, they give agents access to the entire value chain from planning to selling to settlement.

Architecture: How the Dynamics 365 Commerce MCP server works

The Dynamics 365 Commerce MCP server delivers Microsoft-managed commerce tools for storefronts, point-of-sale, and other clients. Built-in security and governance let retailers create unique commerce experiences without managing MCP infrastructure.

We’ve designed the Dynamics 365 Commerce MCP server tools around customer intent, not APIs. Instead of exposing individual APIs, the MCP server provides purposeful tools for complete retail scenarios. Agents can discover products, check availability, apply discounts, build carts, and select fulfillment options seamlessly.

Dynamics 365 Commerce MCP server is a first-party MCP server that runs as a Microsoft managed endpoint on the Dynamics 365 Commerce Scale Unit (CSU), the same headless commerce engine powering Dynamics 365 Commerce storefronts, point-of-sale, and other clients. With enterprise-grade security, governance, and lifecycle management built in, teams can focus on delivering differentiated commerce experiences without building and maintaining their own MCP infrastructure.

The Dynamics 365 Commerce MCP server exposes tools designed around customer intent, not APIs. Instead of exposing individual APIs, the MCP server provides purpose-built tools for retail scenarios. Agents can discover products, check availability, apply discounts, build carts, and select fulfillment options in a single interaction.

MCP tools for shopping, checkout, and order lookup

The Dynamics 365 Commerce MCP server exposes commerce capabilities as AI tools that support end-to-end retail journeys. Each tool targets a business scenario, enabling agents to fulfill user intent through a single interaction.

The tools available today support core shopping journey scenarios from product discovery through checkout. Shoppers can browse the catalog, search for products, and view detailed product information including pricing, active discounts, and real time inventory availability. From there, agents can add items to cart, apply promotions, and complete checkout using Pay by Link. This works for both guest and authenticated users. Returning customers can also retrieve their full order history and order details, including status, line items, and fulfillment tracking. Authenticated consumer experiences are supported by agent hosts that support C2 authentication.

With this tool set, retailers can enable conversational discovery and selling experiences wherever their customers are: ecommerce sites, WhatsApp, GenAI platforms, and any channel that supports agent interactions. The same tools power the experience regardless of surface, giving retailers one investment that works across supported channels.

The following tools are available today in Public Preview

Beyond Public Preview, future capabilities are outlined in the official Dynamics 365 release plans. Please refer to the release plans for the most up-to-date information. You can see what is up next for Dynamics 365 Commerce in our release plans here: Microsoft Dynamics 365 – Release Plans

Quality and Evaluation

Shipping MCP tools to production demands more than functional correctness. It requires confidence that AI agents will behave reliably across diverse real-world scenarios. The Dynamics 365 Commerce MCP server has undergone rigorous testing and evaluation across key dimensions including: tool selection accuracy, parameter precision, grounding fidelity, end to end scenario completion, multi turn task success, latency and efficiency, error handling and failure recovery, edge case robustness, and response helpfulness. These evaluations run continuously across tool updates and model changes, catching regressions before they reach customers. The result is designed to meet enterprise requirements for reliability and performance. Quality assurance isn’t an afterthought, it’s a foundational investment baked into every release.

Getting Started

Dynamics 365 Commerce MCP server is delivered as a managed endpoint on your Commerce Scale Unit 10.0.48 release. Once the endpoint is enabled, any MCP-aware host such as Microsoft Copilot Studio, ChatGPT, or your own orchestrator can connect to it, sign in via Microsoft Entra ID, and start calling tools.

The following prerequisites are needed to get started:

• Commerce Scale Unit on version 10.0.48 or later, with at least one active online channel published.
• MCP endpoint enabled on the CSU. Administrators can enable or disable this in a self-service manner from the Commerce Scale Unit details page in LCS.
•  Microsoft Entra ID tenant for agent authentication. For authenticated shopper scenarios (order history, saved addresses), the shopper signs in through your configured identity provider.
•  Any MCP-compatible agent host such as Microsoft Copilot Studio, ChatGPT, or other MCP clients.
•  Endpoint URL from the Commerce Scale Unit in LCS once the endpoint is enabled.

To create an agent with Microsoft Copilot Studio, add the Dynamics 365 Commerce MCP server as a tool source by pointing it at your endpoint URL, configure Entra ID authentication, and publish to any supported channel including your commerce website, Teams, Microsoft 365 Copilot, or Messenger. The agent automatically discovers available tools offered with the Dynamics 365 Commerce MCP server, so you can test full shopper journeys from product discovery through checkout, then tune with brand voice, guardrails, and knowledge sources before going live.

To enable the Dynamics 365 Commerce MCP server on ChatGPT, register it as a connector by pointing it at your endpoint URL and configure OAuth with Microsoft Entra ID so authenticated flows (order history, saved addresses) run under the shopper’s context while anonymous flows (discovery, cart, checkout) work without sign-in. Validate the experience with sample shopping prompts, then keep the connector for internal use or submit it through ChatGPT’s app review for broader distribution.

For more details on available tools, and how to get started with the Dynamics 365 Commerce MCP server, refer to Microsoft Learn.

Partner Ecosystem

Our partner ecosystem is building on the Dynamics 365 Commerce MCP server to deliver on scenarios across key retail operations:

Amicis Store Commerce Agent — Voice-first assistant for in-store returns, exchanges, and order lookups using natural voice commands against live Commerce data.

Sunrise Commerce Companion — Retail agents simplifying inventory, fulfillment, purchasing, and store processes through natural language.

Argano Retail Clienteling Agent — Personalized, brand-aligned selling powered by customer insights and product data, turning in-store appointments into high-value moments.

Visionet FashionGPT Agent — Turns natural-language shopping intent into real-time execution across product, pricing, inventory, and promotions.

Evenica B2B Licensee Product Request Agent — Conversational AI with image recognition for product discovery and automated intake requests when items aren’t in catalog.

As we expand the public preview release, we look forward to sharing more customer stories and partner AI agents.

Conclusion

As the agentic ecosystem evolves, so will the capabilities exposed by the Dynamics 365 Commerce MCP server, giving retailers and partners continuously evolving capabilities to build on. Whether you are creating shopping assistants, automating store operations, or reimagining the checkout experience, the Dynamics 365 Commerce MCP server provides the connective layer between AI and the commerce logic and data that runs your business.

We invite retailers, partners, and developers to explore the Dynamics 365 Commerce MCP server in Public Preview, build your first agent, and help shape the future of agentic commerce.

The post Dynamics 365 Commerce introduces agentic capabilities with Model Context Protocol (MCP) appeared first on Microsoft Dynamics 365 Blog.

Unifying service activity into a continuous, connected experience

Service work rarely happens in isolation. What looks like a single repair or maintenance visit is usually one step in a broader process that spans both service execution and financial tracking.

In many organizations, those two halves stay disconnected: work orders are completed in the field, while costs, revenue, and progress are tracked separately. The result is limited visibility into the true financial impact of service work as it happens and reconciliation after the fact instead of managing operational and financial data together in a single, continuous process.

Enabling a unified financial model for service work

At the end of January 2026, we introduced interoperability between Microsoft Dynamics 365 Field Service and Microsoft Dynamics 365 Project Operations generally available (GA), enabling service organizations to manage execution and financial outcomes as part of a single, connected model.

Within this model, work orders are no longer isolated, one-off transactions. They become part of a broader financial and operational framework that connects service activity over time. Organizations can maintain a continuous view of work performed across assets, contracts, or long-running service engagements while improving financial visibility, operational traceability, and billing accuracy.

For more information about the GA release, see the release plan documentation:

• Connect Field Service to finance and operations
• Link work orders to projects for unified financials
• Enable serialized inventory tracking between Field Service and finance and operations

Contoso scenario: managing parts usage across a project

Consider Contoso Energy Services, a provider that installs and maintains industrial refrigeration systems for large grocery chains. Their work often involves multi-week preventive maintenance, complex repairs, and large-scale equipment installations, scenarios where coordinating service execution and financial tracking is critical.

In this example, Northwind Grocers engages Contoso to replace refrigeration equipment across multiple store locations. Contoso structures the engagement under a project contract, with contract lines defining how parts used during installation and maintenance are priced and billed

Contoso creates a project representing the overall equipment replacement program. This project serves as the financial structure for the engagement, tracking service activity across multiple locations and work orders within a single, governed view.

Contoso then executes individual store visits through work orders linked to this structure. For example:

• Work order – replace refrigeration parts at Store #102
• Work order – replace refrigeration parts at Store #118

Planning material usage before execution

Before technicians arrive on site, the team captures the parts they expect to use as estimates on the work order. For Store #102, this includes two refrigeration compressors and four refrigerant valves.

Once entered, these estimated quantities automatically flow from the work order into Project Operations, where they appear as material estimates on the associated project.

In Project Operations and Dynamics 365 Finance deployments, those material estimates also generate demand forecast lines.

Converting parts usage into financial transactions

Technicians record the parts they use directly on the work order as they complete the work. Through the interoperability, this usage is translated into financial records within the project. Material usage is processed through standard approval workflows and recorded as project actuals, representing the financial impact of materials consumed during service execution.

Tracking project profitability

As work orders progress across multi-month installations, the financial impact becomes continuously visible throughout execution. This gives organizations an ongoing view of profitability, so they can track performance as work progresses spot trends early, such as parts consumption running ahead of estimate, cost overruns, or margin erosion, while the engagement is still in flight.

Posting transactions to finance

After approval, the system creates project actuals linked to the appropriate contract line accurately reflecting the financial impact of the completed work. From here, the invoicing and posting process depends on the organization’s deployment model.

Project Operations Core deployments: Contoso uses actuals to generate a draft pro forma invoice within Project Operations. This invoice previews what will be billed, and users can review and finalize it directly in Project Operations.

Project Operations and Dynamics 365 Finance deployments: Approved actuals are transferred to Dynamics 365 Finance through the Project Operations Integration Journal. Finance users can review and post these transactions, then handle invoicing within Finance.

Organizations working with other ERP systems can apply a similar pattern to transfer approved financial data for downstream invoicing and posting.

Once processed, transactions flow into the project subledger and then into the general ledger.

Capabilities enabled by the Field Service and Project Operations interoperability

These capabilities connect planning, execution, and financial processing within a single operating model.

Service work no longer generates disconnected operational records that require downstream reconciliation. Instead, execution flows through a unified financial lifecycle, from estimates and forecasts to actuals, invoicing, and revenue recognition.

Deployment models and modern architecture alignment

The Field Service and Project Operations interoperability supports multiple deployment models, allowing organizations to align with their broader operational and financial landscape.

Organizations can choose how they structure financial management and system ownership within Dynamics 365 or other ERP systems while maintaining a consistent operating model for service execution.

Project Operations Core: In this model, Project Operations manages project financials and invoicing, while Field Service remains the system of record for inventory.

Project Operations and Finance deployments: In this model, Finance and Supply Chain Management become the system of record for inventory and accounting. Finance processes financial postings and final invoicing, while Field Service and Project Operations manage operational execution and track project financials.

Both deployment models rely on the modern Project Operations architecture, which introduces a structured financial hierarchy designed for service-centric operations.

PMA guidance and manufacturing deployments

The Field Service and Project Operations interoperability relies on the modern Project Operations architecture, where PMA projects are largely read-only and limited to financial activities. As a result, transactions post only to modern Project Operations projects, not PMA projects. Use modern projects for service-based scenarios and keep PMA projects for reference or limited financial activities.

Learn more: Move to the modern architecture

Ready to get started?

Please visit our learn more documentation: Set up Field Service interoperation with Project Operations. For detailed licensing guidance, see the Dynamics 365 licensing documentation.

The post Managing Complex Service Work with Financial Clarity appeared first on Microsoft Dynamics 365 Blog.

Manufacturing leaders today are under constant pressure: volatile demand, fragile supply networks, inventory risk, and zero tolerance for missed customer commitments. Plants must protect margins and maintain uptime while responding to disruption with incomplete or delayed information. 

To lead in this environment, manufacturers need decision-making that surfaces risk earlier, absorb supply shocks faster, and replans quickly, so production stays aligned to demand and customer commitments. 

Microsoft Dynamics 365 is your agentic enterprise resource planning (ERP) foundation

Dynamics 365 gives manufacturers a connected foundation where signals from demand, supply, capacity, and cost can drive action. As part of the Microsoft platform, it brings together data, analytics, automation, and collaboration across the business. 

Imagine a manufacturing stack where every part of the business is connected, where data isn’t fragmented across systems but unified into a shared understanding of operations, and where insights don’t sit in dashboards but show up in context, in the flow of work. Where your teams can build AI agents and adapt processes in real time rather than reengineering them months later. Where every person operates with the full context of the business, demand, supply, capacity, and commitments, every decision drives aligned action across the company. This is what it means to close the gap between knowing and doing. 

At Hannover Messe 2026, Microsoft is showcasing how agentic ERP with Copilot, agents and Dynamics 365 supports these operational decisions amid constant change, helping manufacturers replan faster, make better production tradeoffs, and meet or exceed customer service SLAs.   

From sensing demand shifts to mitigating supplier delays, production constraints, and equipment downtime, these signals must translate into real-time fulfillment and order promise decisions. Agentic ERP can connect planning, sourcing, production, fulfillment and service commerce to execute these decisions across the manufacturing value chain. 

Agentic demand planning can sense shifts earlier  

Demand planning can help you forecast demand, applying a structured phase in/phase out with external signals to account for market dynamics. Copilot accelerates this data analysis, scenario modeling, and incorporates market intelligence. For structured planning, Demand Planning in Dynamics 365 Supply Chain Management provides an agentic collaborative demand planning solution, powered by best-in-class forecasting algorithms and models, an immersive user experience with AI, intelligent segmentation and signal analysis, and analytics.  

“Now, we can see the item-level details and the solution populates Dynamics 365 with that information for master planning. That’s a big step forward because now we essentially have a planned budget and we can easily produce the next production cycle’s budget without manually exporting the data.” 

Patrick Keller, Head of ERP, Poloplast | Read more about how Poloplast modernizes manufacturing and streamlines forecasting and planning with Dynamics 365

Agent evaluates supplier disruption impact enabling operational resilience 

A delayed component or supplier exception is not a paperwork problem. It is a production and operational risk. Today, Microsoft announced the Procurement Agent in Dynamics 365 Supply Chain Management is available in public preview. The Procurement Agent helps teams respond faster to supply disruption by decoding supplier communications and identifying which production orders, inventory positions, and customer commitments are at risk, while keeping humans in control. Beyond triaging supplier communications, the Procurement Agent performs impact analysis so teams can assess downstream effects and act before a supplier issue turns into an on time, in full (OTIF) failure.

“Across the team, Dynamics 365 will save us a total of 20 hours weekly. The big benefit in time savings is that the agent has read the email, found the order, found the lines affected, decoded what the vendor is trying to say, and recommended actions.”

Sean Barrett, Inventory and Analytics Manager, Farmlands Cooperative | Read more about Farmlands Cooperative: Sowing the seeds of innovation with autonomous agents in Dynamics 365

Agent mitigates production constraints 

For the shop floor, Copilot, connected to Dynamics 365 Supply Chain Management via Dynamics 365 MCP Server (Model Context Protocol), can provide AI-generated insights to schedules, inventory, and orders. Copilot can also surface quality-related alerts and can suggest targeted inspections to prevent recurring recalibration issues enabling supervisors to proactively mitigate resource constraints and shortages before they impact production schedules, triggering downstream inventory repositioning and order promise adjustments across fulfillment and customer commitments. 

Dynamics 365 Supply Chain Management provides near real-time visibility to the production floor; with agentic experiences, supervisors can spend less time gathering data and more time on proactive exception management. This translates to higher Overall Equipment Effectiveness (OEE), fewer unplanned stops, and better on-time delivery to customers. 

Agent protects production uptime 

Equipment uptime and asset health are critical inputs to manufacturing performance. Unplanned downtime, delayed service, or poorly coordinated technician schedules can quickly cascade into constrained capacity and missed production targets. The Scheduling Operations Agent in Dynamics 365 Field Service can help maintain equipment availability for constrained production schedules by dynamically coordinating technician assignments based on geography, skills, certification requirements, capacity, travel time, and SLA commitments.  

Today, Microsoft announced Researcher in Microsoft 365 Copilot is available in public preview within Dynamics 365 Field Service. With Microsoft 365 Copilot in Dynamics 365 Field Service, manufacturers can use Researcher to quickly view operational information across work orders, asset and service history, and parts availability. Researcher surfaces relevant context from Field Service data and Microsoft 365 signals to help teams understand situations as they arise.

“The field technicians understand that AI can be a benefit for them. It’s really about trying to improve their overall experience as well as the customer’s”

Matthew Hashenberger, Head of Service Excellence, Siemens Smart Infrastructure (U.S.) | Learn how Siemens elevates field service operations with Microsoft Dynamics 365

Agentic warehouse management can fulfill demand faster  

As finished goods hit the warehouse, intelligent inventory on-hand balancing in Dynamics 365 Supply Chain Management warehouse management updates slotting to align demand with pick zones. When inbound put-away happens, workers are directed to the best locations based on the intelligent inventory balancing, keeping the warehouse organized dynamically. On the outbound side, optimized pick routes shorten travel distance. The combined outcome is higher throughput with the same labor—faster fulfillment, lower picking cost.  

With Dynamics 365, we trust the system. It’s easy to retrieve information and know it’s correct; people can just drive the forklift over. All the considerations we have for our picking, packing, and customer details, the system is doing it for us. 

Niclas Strand, Warehouse Manager, KåKå, Orkla Food | Read more about why Orkla Food Ingredients’ Dynamics 365 transformation is a sweet upgrade

Agentic B2B Commerce aligns customer orders to production reality 

As manufacturers and industrial distributors modernize how they sell, serve, and scale, digital ordering is becoming a core capability of the ERP rather than a standalone channel. Dynamics 365 Commerce enables manufacturers to support complex buying and selling models including business-to-business (B2B), business-to-business-to-business (B2B2B), and multioutlet ordering across direct customers, distributors, and dealer networks. 

Agentic B2B commerce can help automate routine ordering, replenishment, and quote-to-order processes while remaining tightly connected to pricing, inventory, warehousing, and production planning. This can allow manufacturers and distributors to accelerate order cycles, strengthen partner collaboration, and scale indirect growth with accuracy and control. 

Partner agents to empower manufacturers and solve unmet needs 

Frontier Manufacturing Firms can extend ERP embedded‑operational decisioning using Copilot and agents built with the Dynamics 365 ERP MCP Server. Microsoft’s partners are building agents to solve high friction manufacturing workflows, including engineering change impact analysis, product recalls, and configure-price‑quote‑ processes, enabling manufacturers to execute operational decisions across sourcing, production, and fulfillment within the systems they use to run their business. 

“With the Experlogix CPQ MCP Server and Dynamics 365 ERP manufacturers can turn Copilot into a revenue agent that understands complex configurations, validates engineering rules and constraints, and generates accurate quotes instantly. This accelerates sales cycles, with many customers reducing time to quote by well over 90%.”

Louis-Philippe Perras, CTO, Experlogix 

“Cegeka’s Quality Impact Recall Agent turns disruptive recall events into a controlled, orchestrated process for manufacturers reliant on end-to-end traceability. Running inside Dynamics 365 Supply Chain Management, companies handling batch- or serial-controlled products can identify affected materials across plants and distribution channels in minutes, trigger automated communication flows, and accelerate quality-investigation cycles. This approach supports manufacturers in maintaining continuity, reducing risk, and protecting both customers and brand reputation.” 

Stijn Geeroms, VP Business Solutions, Cegeka

“The most expensive moment in manufacturing isn’t when something breaks. It’s when an engineering change gets approved without anyone understanding the impact. Manufacturers don’t need another disconnected AI tool to fix that. They need intelligence embedded where they already work. That’s why we built the Staedean ECM+ Impact Agent natively on Copilot inside Dynamics 365 – your rules, your data, your answer – without asking teams to leave the system they run their business in.”

Michiel Toppers, Chief Product Officer, Staedean

These agents extend ERP-embedded decision execution into engineering, quality, and configure-to-order workflows that directly impact production scheduling and customer commitments. 

Become a Frontier Manufacturing Firm 

The manufacturers that lead this next era will be the ones who can respond to demand shifts, supplier delays, and equipment constraints by coordinating planning, production, fulfillment, and customer commitments across the value chain in real time. 

Microsoft is committed to helping manufacturers make that transition, combining a connected Dynamics 365 foundation with Copilot and agents embedded in everyday workflows plus a partner ecosystem that brings manufacturing expertise to the front line. Join us and become Frontier.  

Join us in person at Hannover Messe 2026: 

• Return on Intelligence: The Next Frontier of Manufacturing, Dev Cupp, Yitshak Kesselman, Monday, April 20, 2026, 2:00 – 2:30, Hall 25, Center Stage
• From Insight to Action: The Rise of Agentic Supply Chains in Manufacturing, Sam Schotte, Monday, April 20, 2026, 3:30 – 3:50, Hall 17, Stand G06 

Register to watch a series of executive conversations recorded at Hannover Messe 2026: Executive Insights: Unlock the Future of Industrial Intelligence 

The post Becoming a Frontier Manufacturing Firm: Agentic decisions across the manufacturing value chain appeared first on Microsoft Dynamics 365 Blog.

Growth is exciting—but it introduces complexity. 

As small and midsize businesses scale, finance and operations become harder to manage. Transactions increase, reporting requirements expand, and disconnected systems start to strain visibility and margins. What once worked becomes a constraint. 

A newly published Forrester Total Economic Impact™ (TEI) study helps quantify what many organizations are already experiencing: modernizing on Microsoft Dynamics 365 Business Central delivers measurable financial impact.

Microsoft commissioned Forrester Consulting to evaluate the potential return on investment organizations may realize by deploying Business Central. Based on interviews with four business decision makers, which were aggregated to model a fictitious composite organization¹, the study projected that the composite organization could potentially realize: 

• More than 200% return on investment (ROI) over three years 

• An estimated $460K net present value (NPV) over three years 

• Potential payback in six months 

Across finance productivity, enterprise resource planning (ERP) consolidation, improved profitability, and reporting efficiency, the composite organization modeled by Forrester realized more than $680K in three‑year, risk‑adjusted present value benefits. 

These outcomes reflect the potential impact of modernizing finance and operations on a single, integrated cloud ERP platform—while also establishing the foundation for AI‑powered experiences like Microsoft 365 Copilot and intelligent agents. 

Where the value comes from

The Forrester TEI study highlights several areas where organizations can potentially realize tangible, risk‑adjusted benefits when using Business Central. 

Support faster, more efficient finance operations

Manual processes often slow growing organizations. Interviewed customers reported meaningful efficiency gains across accounts payable (AP), accounts receivable (AR), billing, and financial close. 

By year three, the composite organization was projected to potentially achieve: 

• Up to 30% reduction in monthly close time 

• Up to 50% time savings for AP, AR, and billing activities 

These improvements translated to more than $215K in present value over three years in finance productivity alone for the composite organization—allowing teams to shift focus from reconciliation to higher‑value analysis. 

Standardizing data and workflows in Business Central also creates the conditions necessary for AI‑enabled automation. While AI benefits were not independently quantified in this study, interviewees noted that unified processes accelerate the adoption of Copilot‑supported approvals, variance analysis, and exception handling. 

Lower total cost of ownership through ERP consolidation

Interviewees reported operating aging on‑premises ERP systems alongside spreadsheets and disconnected point solutions. Consolidating onto Business Central reduced infrastructure complexity and IT overhead. 

The study projected the following potential benefits for the composite organization over three years: 

• More than 10% reduction in total cost of ownership (TCO) 

• More than $170K in present value savings from retired systems and reduced maintenance 

Beyond direct savings, simplification can reduce operational risk and improved scalability—allowing organizations to grow without layering on new systems to compensate for gaps. 

Enable improved profitability through better visibility

Unified, real‑time visibility across finance and operations enables faster, more informed decisions. 

By year three, the composite organization was modeled to potentially experience: 

• Up to 3% improvement in net profit margins 

• More than $245K in present value from improved profitability 

Better insight into costs, projects, and performance enables earlier course correction. AI‑powered experiences such as Copilot can further assist by surfacing cost variances, project overruns, or unbilled work sooner. While AI alone does not drive margin improvement, modern ERP data and standardized processes strengthen an organization’s ability to act with precision. 

Fast reporting and audit readiness

Business Central’s integrated data model and native Microsoft Power BI capabilities streamlined reporting and audit preparation. 

Based on modeling by Forrester, by year three, the composite organization was projected to potentially reduce: 

• Audit preparation time by up to 30% 

• Time spent creating internal and executive reports 

These projected improvements were valued at nearly $50K in present value, while also enabling increased confidence in data accuracy and consistency. 

Beyond the numbers: Building an AI-ready foundation

In addition to quantified financial outcomes, interviewees highlighted broader operational improvements, including enhanced customer experience, reduced days sales outstanding (DSO), better warehouse management, and a more intuitive user experience. 

Just as importantly, Business Central provides an AI‑ready ERP foundation. 

By unifying finance and operations data and aligning processes to best practices, organizations are better positioned to leverage Copilot, Power BI, and intelligent agents to: 

• Help reduce time-to-insight—not just report creation
• Surface anomalies and trends quickly 
• Enable more proactive, data‑driven decision‑making 

While AI‑driven outcomes were not directly measured in this TEI, the study reinforces a critical principle: realizing AI value at scale depends on clean data, integrated systems, and standardized processes. Business Central delivers that foundation. 

Read the full study

For SMB‑focused organizations and partners evaluating ERP modernization, the full Forrester TEI study provides a detailed financial framework to help quantify potential projected value—grounded in customer interviews and risk‑adjusted modeling. 

Join us at Directions North America 2026

The Forrester TEI study highlights the potential value organizations may realize with Business Central—from faster financial processes to improved profitability and lower total cost of ownership. 

We’ll continue these conversations at Directions North America 2026, where partners, Microsoft engineering, and product leaders come together to discuss what’s next for the Business Central ecosystem and the future of AI-powered ERP. 

Join me for the keynote, where I’ll explore how Business Central is evolving into an AI-powered system of action with Copilot and intelligent agents. 

Attendees will: 

• Gain insight into the Business Central roadmap 
• Prepare for upcoming AI-powered capabilities 
• Connect directly with Microsoft engineering and product experts 
• Engage with partners across the Business Central community 

1. Composite organization assumption: Results are based on a Forrester modeled composite organization derived from customer interviews, with $50M in annual revenue, 300 employees, 15 core finance and accounting users, and 100 light users, using Dynamics 365 Business Central in a cloud deployment. All quantified benefits represent the three-year, risk-adjusted present value for the composite organization.

The post Enable accelerated growth with confidence: A Forrester TEI study projects more than 200% ROI over three years and six-month payback using Dynamics 365 Business Central appeared first on Microsoft Dynamics 365 Blog.

We’re entering a new era of AI-powered business applications, and today we’re excited to publish the 2026 release wave 1 plans for Microsoft Dynamics 365, Microsoft Power Platform, and role-based agents in Microsoft 365 Copilot, outlining a broad set of capabilities slated for release between April 2026 and September 2026. These updates reflect our ongoing commitment to making AI an essential partner in how organizations operate, innovate, and grow.

Dynamics 365 leads this wave with AI-powered, agentic innovations across sales, service, finance, supply chain, human resources (HR), and commerce—helping organizations unify data, automate processes, and elevate customer and employee experiences. Microsoft Power Platform continues to expand modern app development, intelligent automation, and enterprise-grade governance to empower makers and developers to innovate with confidence. Role-based agents in Microsoft 365 Copilot further evolve into intelligent daily command centers, helping to deliver richer, data-grounded insights and extensibility that help teams work smarter across every role.

To help you stay current on the most important and innovative capabilities, we’re moving beyond bi-annual launch events to lighter, more frequent business applications updates, featuring expert insights and demonstrations from Microsoft product leaders and engineers.

• Watch on demand: Dynamics 365 Business Applications Update
• Register for the Power Platform and Copilot Studio update April 15 at 9 AM PDT

Be sure to stay updated on the latest features and create your personalized release plan using the release planner.

Highlights from Dynamics 365

2026 release wave 1 updates for Dynamics 365 deliver AI-powered, agentic experiences across sales, service, finance, supply chain, commerce, HR, projects, sustainability, and enterprise resource planning (ERP)—bringing deeper Copilot integration, intelligent automation, unified customer and operational data, and enhanced cross-app capabilities to help organizations drive efficiency, elevate customer and employee experiences, and operate with greater agility and confidence.

Dynamics 365 Sales

Dynamics 365 Sales brings the power of AI to help sellers build their pipeline, enrich opportunities, and accelerate deal closure, while helping sellers easily access accurate, up-to-date information and recommending high-impact actions that sellers can take. Copilot experiences in Dynamics 365 Sales can draw on data spanning customer relationship management (CRM) and Microsoft 365 signals, like email and meeting recaps, to deliver actionable insights across Dynamics 365 and Microsoft 365 experiences.

Dynamics 365 Customer Service

Dynamics 365 Customer Service will continue to enhance agentic capabilities across case management, email, customer intent, quality evaluation, and knowledge management. AI-infused admin and supervisor help to provide more transparency and quicker time-to-value. These investments strengthen end-to-end service orchestration, from helping identify customer intent to driving autonomous workflows that elevate service quality and responsiveness.

Dynamics 365 Contact Center

Dynamics 365 Contact Center advances the agentic contact center in 2026 release wave 1 with new AI-powered capabilities that improve self-service, support accelerate assisted service, and help organizations run contact center operations more intelligently in 2026 release wave 1. It expands to include emerging channels, supervisor insights, and extensibility, giving organizations a unified, AI-powered system to elevate the customer experience.

Dynamics 365 Field Service

Dynamics 365 Field Service strengthens service execution across technician productivity, resource scheduling, and work order management. Investments focus on mobile usability and reliability, intelligent scheduling through the Scheduling Operations Agent, and end‑to‑end execution across assets, projects, and financial operations in this release wave. Together, these updates help organizations manage service complexity and deliver consistent service outcomes.

Dynamics 365 Sustainability

Dynamics 365 Sustainability introduces more intuitive reporting navigation, advanced calculation versioning, and granular data‑locking to reinforce governance and regulatory confidence in this wave. Expanded finance integration, streamlined workflows, and updated templates and factor libraries will further empower organizations to make informed decisions and support progress toward their sustainability goals.

Dynamics 365 Finance

Dynamics 365 Finance delivers continued global scale enhancements that drive greater financial automation, strengthen global regulatory compliance posture, and enhance financial planning and analytics—helping organizations operate more efficiently and achieve their financial and operational goals with confidence.

Dynamics 365 Supply Chain Management

Dynamics 365 Supply Chain Management’s 2026 wave 1 enhances supply and demand planning with price-demand correlation and capacity-to-promise (CTP) date protection. Supplier communication and engagement are streamlined, while warehousing gains AI-powered picking, inventory rebalancing, and hands-free scanning—driving supply chain efficiency.

Dynamics 365 Project Operations

Dynamics 365 Project Operations brings rich capabilities in 2026 release wave 1—from change order support and smarter project planning to smoother quoting, budgeting, and contract workflows. New enhancements streamline item consumption, mobile expense management, subscription billing, and modern-architecture migration—delivering connected project experience.

Dynamics 365 Commerce

Dynamics 365 Commerce strengthens business-to-business (B2B) with multi-outlet ordering, unified sign-in, outlet-specific catalogs, and built-in credit management to help reduce friction and protect cash flow. It modernizes order management and assisted-selling workflows in retail stores, helping to improve associate productivity, and customer experiences across channels. It also enables cross-legal-entity inventory lookup and flexible, attribute-based pricing to help accelerate mass updates and help drive higher sales.

Dynamics 365 Human Resources

Dynamics 365 Human Resources continues to advance in areas such as recruitment, onboarding, reporting, and integrated workforce management. By merging enhanced user experiences with broader ecosystem integration and expanding regional payroll collaborations, the platform enables organizations to optimize employee engagement, support operational accuracy, and confidently achieve their workforce objectives.

Finance and operations cross-app capabilities

Finance and operations cross-app capabilities will introduce new enhancements that strengthen the foundation for AI experiences across Dynamics 365. These updates include improvements to Model Context Protocol (MCP) servers, as well as the general availability of immersive home, which is an AI-powered workspace designed to help users stay focused and prioritize what matters most.

Dynamics 365 Customer Insights – Data

Dynamics 365 Customer Insights – Data acts as the grounding layer for CRM copilots and AI agents, delivering real‑time, unified customer profiles that help power accurate decisions. With enriched data, teams can act on insights directly in their workflow to deliver timely, personalized experiences that deepen engagement and drive better outcomes. The result is an AI-ready data core that elevates agents and helps deliver more connected, intelligent CRM experiences.

Dynamics 365 Customer Insights – Journeys

Dynamics 365 Customer Insights – Journeys empowers end-to-end, agentic customer engagements across sales, marketing, and service, allowing businesses to proactively react to customer behavior using Copilot and AI agents. With smarter orchestration tools, teams can deliver impactful campaigns at scale to drive stronger relationships, higher efficiency, and revenue growth. Part of Dynamics 365, every interaction within your organization benefits from shared data and consistent intelligence across Microsoft CRM applications.

Dynamics 365 Business Central

Dynamics 365 Business Central accelerates the move to agentic ERP with enhancements to our AI‑powered agents that automate sales and purchase scenarios in 2026 release wave 1. Alongside new business capabilities, we invest heavily in developer productivity to support extensibility—improving advanced language (AL) testing, debugging, Copilot extensibility, and agent design.

Highlights from Microsoft Power Platform and Microsoft Copilot Studio

2026 release wave 1 updates for Microsoft Power Platform deliver modernized app experiences across Power Apps and Power Pages, AI-powered automation and agent innovation in Power Automate and Copilot Studio, enhanced Dataverse intelligence and programmability, and strengthened governance, security, and cost management capabilities to help organizations build, scale, and manage intelligent solutions with confidence.

Power Apps

Power Apps continues to modernize app experiences with a refreshed model-driven user interface (UI), improved mobile and offline capabilities, streamlined search, and expanded AI features. This release brings standardized modern theming to everyone, real-time Dataverse access for offline-first canvas apps, enhanced search in grids and lookups, and broader availability and extensibility of generative pages to help teams build and scale intelligent apps faster.

Power Pages

Power Pages will further empower pro-developers and low-code makers to build intelligent business portals for your employees, customers, citizens, and partners through better integration with market leading AI tools. Additionally, enhanced security agent features will further support low-code makers, pro-developers, and admins with actionable insights and abilities for securing their websites.

Power Automate

Power Automate is Microsoft’s comprehensive automation platform for cloud flows, desktop flows, and process mining. This release introduces AI agent authoring, optimization, and self-healing capabilities for desktop flows, Copilot Studio-powered actions in cloud flows, enhanced maker and collaboration tools across both, general availability of object-centric process mining, and consolidated governance reporting.

Microsoft Copilot Studio

Microsoft Copilot Studiocontinues its journey to make agent and agentic workflows even easier to build and more powerful. Now you can further customize agents built with Agent Builder in Microsoft 365 Copilot, and power your automation with high value AI actions. Deeper governance, multi-agent orchestration, and evaluations enable further scaling. With connections to Microsoft Foundry and Work IQ, your agents can use the latest AI technology in coordination with your organizational data.

Microsoft Dataverse

Microsoft Dataverse continues to invest in enterprise-ready agentic and low-code data platform capabilities. The spotlight is on Work IQ and Copilot integration, delivering organization-specific decisions with adaptive learning and full auditability. We’re also enhancing agent programmability with Dataverse APIs, MCP servers, and Python SDK, plus new storage management tools for enterprise-grade compliance at scale.

Microsoft Power Platform governance and administration

Microsoft Power Platform governance and administrationintroduces admin controls for agent security, real-time risk assessment in Copilot Studio, and AI-powered governance agents that automate tenant monitoring and remediation in this release. Enhanced visibility into usage patterns, granular Copilot credit usage with pay-as-you-go (PAYG) caps, and connector dependencies help you optimize costs, demonstrate return on investment (ROI), and enforce compliance with organizational policies using features within the Power Platform Admin Center. GitHub integration and deploy from Git mature your application lifecycle management (ALM) practices with full audit trails.

Business Applications Update

Power Platform &

Copilot Studio edition

Watch on demand

Updates to role-based agents in Microsoft 365 Copilot

2026 release wave 1 updates for Microsoft role-based agents transform Sales Agent and Finance Agent in Microsoft 365 Copilot into intelligent daily command centers, helping to deliver richer, data-grounded insights, enhanced chat and mobile experiences, contextual support across Outlook and Teams, and strengthened governance and extensibility to help organizations drive productivity and scale AI responsibly.

Sales Agent

Sales Agent becomes the seller’s daily command center with richer Sales Chat and Sales Home experiences across desktop and mobile in 2026 release wave 1. Sellers will gain streamlined access to deal and account insights through configurable record summaries, contextual support in Outlook and Teams, and improved email and meeting intelligence. New governance and extensibility controls will also help organizations scale AI responsibly.

Finance Agent

Finance Agent helps finance professionals and their stakeholders interact with financial information from their ERP within the flow of work. In 2026 release wave 1, we continue expanding how this financial assistant supports common finance tasks such as reconciliation, variance analysis, and data preparation in Excel, as well as customer communications in Outlook. By bringing financial insights and assistance directly into familiar productivity tools, the Finance Agent helps teams investigate issues faster, respond to stakeholders more efficiently, and spend less time manually preparing or reconciling data so they can focus more on financial analysis and decision support.

For a complete list of new capabilities, please refer to the Dynamics 365 2026 release wave 1 plan, the Microsoft Power Platform 2026 release wave 1 plan, and role-based agents 2026 release wave 1. We also encourage you to share your feedback in the community forums for Dynamics 365 and Microsoft Power Platform.

Business Applications Update

The Business Applications Update offers an early preview of new capabilities coming in the months ahead. This refreshed structure is designed to reflect the reality of our time: innovation does not happen twice a year; it is constant. Whether you are a strategic leader or a hands-on practitioner, this new cadence is built to get you quickly up to speed.

• Watch on demand: Dynamics 365 Business Applications Update
• Watch on demand: Power Platform and Copilot Studio Business Applications Update

The post 2026 release wave 1 plans for Microsoft Dynamics 365, Microsoft Power Platform, and Copilot Studio offerings appeared first on Microsoft Dynamics 365 Blog.

Enterprise resource planning (ERP) decisions are among the most consequential investments a business can make; shaping how organizations operate, scale, and compete for years to come. Yet many ERP transformations have historically carried risk: high costs, long timelines, heavy customization, and uncertain returns.

To bring clarity to these decisions, Microsoft commissioned Forrester Consulting to conduct two independent Total Economic Impact™ (TEI) studies examining the business value of Microsoft Dynamics 365 ERP on enterprises and midmarket organizations.

• The Total Economic Impact™ of Microsoft Dynamics 365 ERP for Enterprises
• The Total Economic Impact™ of Microsoft Dynamics 365 ERP for Midmarket Organizations

From fragmentation to integration: Why ERP modernization matters

Across both 2026 studies, Forrester’s projections showed organizations from a similar place: fragmented ERP landscapes, siloed data, manual processes, and highly customized legacy systems that were difficult to upgrade or scale. These environments could limit real-time visibility, slow decision-making, and increased operational risk; particularly as organizations grew, expanded into new markets, or managed increasingly complex supply chains. These constraints didn’t just slow operations; they could limit a leader’s ability to respond to volatility, growth, and supply chain disruption with confidence.

In response, organizations turned to Microsoft Dynamics 365 ERP to consolidate finance and supply chain operations with a unified, cloud-based platform. By centralizing data and standardizing processes, organizations can improve operational efficiency and gain timely, actionable insights across the business.

Importantly, this shift reframed ERP from a back-office system of record to a platform for informed, faster decision-making that connects data, people, and processes across the enterprise.

Quantifying business value with Forrester’s TEI methodology

The strength of the TEI studies lies in their focus on quantifiable business impact. Forrester evaluated benefits, costs, flexibility, and risks over a multi‑year period, modeling a composite organization based on real customer interviews and survey responses. This approach allows leaders to evaluate ERP investments using a transparent financial framework rather than vendor claims alone.

Enterprise ERP: Financial impact at scale

In the enterprise TEI study, Forrester modeled a composite organization representing large, complex businesses using Dynamics 365 ERP. The analysis projects that over three years, the organization achieved:

• 101% return on investment (ROI)
• Net present value (NPV) of $12.9 million

These results were driven by a combination of operational efficiency gains, productivity improvements, and cost reductions, particularly from consolidating legacy systems and reducing infrastructure and IT operations spend.

The study highlights that value did not come from isolated features, but from standardizing processes, unifying data across finance and supply chain functions, and reducing reliance on heavily customized, on-premises ERP environments.

Key enterprise findings business leaders should note

For business decision makers evaluating ERP at scale, several findings stand out:

• Improved operational efficiency and productivity can be enabled through streamlined workflows and better access to real-time insights
• Reduced infrastructure and IT operations costs can be enabled by retiring multiple legacy systems and shifting to a cloud-based ERP model
• Faster, more confident decision making enabled by unified financial and supply-chain data

Together, these benefits contributed directly to the projected positive NPV and ROI modeled in the study, reinforcing ERP modernization as a business investment, not just an IT upgrade.

Midmarket ERP: Enterprise-grade value without enterprise complexity

While enterprises face complexity at scale, midmarket organizations often face a different challenge: how to grow without adding disproportionate cost or operational overhead. Forrester’s Total Economic Impact™ study of Microsoft Dynamics 365 ERP for midmarket organizations examined how modern ERP can support expansion, improve visibility, and standardize operations without the burden of traditional enterprise‑scale implementations.

In the study, Forrester modeled a composite midmarket organization based on customer interviews and survey data. The analysis projects that the organization would achieve:

• Payback in 16 months
• Net present value (NPV) of $3.3 million over three years

These outcomes were driven by streamlined finance and supply chain operations, automation of manual processes, and the replacement of disconnected legacy systems with a single, cloud‑based ERP platform. By consolidating systems and standardizing processes, organizations can reduce operational friction while supporting improved visibility and control across the business.

Key midmarket findings business leaders should note

For midmarket decision-makers, the study highlights several critical outcomes:

• Enabled faster time-to-value, with measurable financial returns realized in just over a year
• Enabled improvements to operational efficiency and productivity through streamlined finance and supply chain processes and automation of manual tasks
• Potentially reduced complexity and IT overhead by replacing disconnected legacy systems with a unified cloud ERP platform

These benefits contributed directly to the projected positive NPV and rapid payback modeled in the study, reinforcing ERP modernization as a financially disciplined investment for midmarket organizations focused on growth and resilience.

Why independent research matters for ERP decisions

ERP investments shape the future of an organization for years—sometimes decades. That’s why independent, third-party validation is critical. The Forrester TEI studies do not ask leaders to accept conclusions at face value; instead, they provide:

• A transparent financial model
• Explicit assumptions and risk adjustments
• Clear linkage between operational improvements and economic outcomes

For executives, CFOs, COOs, and IT leaders, these studies offer a common language for aligning stakeholders and setting realistic expectations for ERP transformation.

Go deeper: Explore the full Forrester TEI studies

This summary only scratches the surface. The full Forrester Total Economic Impact™ studies include detailed benefit breakdowns, cost considerations, and financial modeling that business leaders can adapt to their own organizations.

• The Total Economic Impact™ of Microsoft Dynamics 365 ERP for Enterprises
• The Total Economic Impact™ of Microsoft Dynamics 365 ERP for Midmarket Organizations

For organizations considering ERP modernization, these studies provide a data-driven foundation to evaluate options, build a credible business case, and make informed decisions with confidence.

The post Forrester studies project more than 100% ROI for enterprises and 16-month payback for midmarket organizations using Dynamics 365 ERP appeared first on Microsoft Dynamics 365 Blog.

Retail Frontier Firms are evolving their operating models to keep pace with increasingly dynamic markets, using AI to support more responsive and resilient decision-making and execution across commerce channels. Rather than improving individual functions in isolation, these organizations are rethinking how commerce operates end to end, enabling AI agents to work alongside people to support faster, more consistent outcomes across the business. This evolution is accelerating as retailers navigate rising customer expectations, sustained margin pressure, volatile demand, and ongoing labor constraints: conditions that benefit from decisions being made and executed more continuously.

In Retail Frontier Firms, AI capabilities are embedded where decisions and value are created: in stores, at the digital shelf, across merchandising, pricing, fulfillment, customer service, and checkout. AI agents interpret signals from customers, inventory, suppliers, and channels and help coordinate actions across the enterprise. This supports retailers as they respond to change with greater speed, consistency, and scale across touchpoints.

This operating model is enabled by agents that share context and operate cohesively across the retail ecosystem. At the core of agentic commerce is Model Context Protocol (MCP), which provides AI agents with access to a shared, enterprise-grade understanding of products, inventory, pricing, policies, and customer intent. By grounding agents in a common business context, MCP helps support aligned, governed, and consistent decision-making across channels and functions. The future of retail is increasingly shaped by a human and AI agent operating model, connected by shared context and open protocols.

• Model Context Protocol (MCP) unlocks hundreds of thousands of business functions for secure, real-time use by agents, developers, and applications. 
• Agent Communication Protocol (ACP) enables agents across merchandising, supply chain, store operations, and service to collaborate end to end, helping reduce fragmentation and align execution across functions.
• Payment and transaction agent protocols extend AI capabilities through checkout and settlement, supporting trusted, compliant transactions across in-store, online, and conversational commerce.

Together, these capabilities support a more outcome-driven operating model focused on availability, margin, conversion, service levels, and loyalty. Humans define strategy, priorities, and guardrails, while AI agents help orchestrate execution across day-to-day operations: supporting modern retail operations designed for Commerce Anywhere.

Emerging retail trends shaping the future of commerce

As consumer expectations continue to rise, shoppers increasingly demand seamless, continuous interactions where they move effortlessly from social-commerce discovery to mobile checkout, in-store pickup, curbside fulfillment, or voice-activated reordering. Frontier retail responds to this shift by dissolving the boundaries between channels and touchpoints, allowing commerce to adapt in real time to customer intent, location, and context. For brands, this means the ability to deliver frictionless, anticipatory commerce at scale by meeting customers wherever they are, with relevance and speed, without adding operational complexity.

The industry is rapidly shifting away from static, siloed channels toward autonomous, context-aware agents that orchestrate buying journeys seamlessly across stores, digital experiences, and conversational interfaces. Agents move beyond traditional personalization. They actively guide product discovery, shape contextual offers, negotiate availability, and coordinate fulfillment, helping to continuously optimize inventory, pricing, promotions, and supply-chain decisions behind the scenes. As personalization and automation become table stakes, agentic AI emerges as the strategic engine driving scalable growth and sustainable Commerce Anywhere.

Introducing Microsoft Dynamics 365 Commerce MCP Server

Agentic commerce introduces a new operating model in which AI agents collaborate through MCP, enabling continuous decision-making and coordinated execution across the retail value chain. The new Dynamics 365 Commerce MCP Server exposes core retail business logic including catalog, pricing, promotions, inventory, carts, orders, and fulfillment as MCP-enabled capabilities. Expected to be in preview in February 2026, this will allow retailers to build agentic commerce experiences where AI agents can securely discover, decide, and execute retail workflows across digital, physical, and conversational channels.

By combining the ERP, Analytics, and Commerce MCP servers, Dynamics 365 supports a more agent-driven operating model in which front-office experiences and back-office operations are connected and optimized, helping retailers operate with greater agility and readiness for Commerce Anywhere.

How retailers can begin adopting agentic commerce today

Retail leaders can begin moving toward agentic commerce by adopting AI agents in three practical ways:

1. Starting with agents embedded in Dynamics 365
2. Extending capabilities through custom-built agents using MCP
3. Leveraging partner-built agents across the broader retail ecosystem

Together, these approaches allow retailers to progress at their own pace while aligning agent adoption to their operating model, business priorities, and maturity.

1. Start with agents embedded in Dynamics 365

Purpose-built agents are designed to address common retail challenges and operational friction points. Dynamics 365 agents and retail industry agents can be embedded directly into core business processes, allowing teams to realize value quickly.

Microsoft retail industry agents, like the Catalog Enrichment Agent and Personalized Shopping Agent are examples of vertical-specific agents designed around retail data models, workflows, and decision patterns that support scenarios like product discovery, assortment accuracy, and personalized engagement without requiring custom development.

Today, in Dynamics 365 the Supplier Communications Agent is a good example of embedded agents in action. Retailers can proactively monitor supply signals and engage suppliers in real time to confirm availability, align delivery timelines, and respond to changes earlier. This supports faster coordination, fewer surprises, and more reliable execution at scale.

2. Build custom agents using MCP

Retail operations are shaped by business logic that is unique to each organization: driven by merchandising strategies, store formats, service models, and supply-chain constraints. Microsoft Copilot Studio enables retailers to build custom AI agents that encode their own rules across replenishment, allocation, fulfillment, and store execution, aligning agent behavior directly to how the business operates.

These custom agents can operate across planning and selling in the flow of work using MCP-powered access to enterprise systems. Inside Microsoft Teams, Merchandising Managers and Planners can collaborate in real time with agents that access products, demand forecasts, supplier relationships, inventory, and pricing through Dynamics 365 ERP MCP.

On the selling side, through the Dynamics 365 Commerce MCP Server, your custom agents can extend intelligence into customer experiences. Agents can discover products, personalize offers, assess availability, reserve inventory, and complete transactions across digital, physical, and conversational channels while operating with a unified view of pricing, promotions, and fulfillment.

3. Extend agentic commerce through partners and the ecosystem

Retailers can further accelerate agent adoption by leveraging partner-built agents designed for specific retail scenarios and industries. Commerce MCP enables software development companies and system integrators to build agents more quickly by reducing integration overhead, standardizing access to retail data, and maintaining enterprise-grade trust and compliance.

Early partner solutions already demonstrate the breadth of what’s possible, from store associate productivity and clienteling to conversational commerce and business-to-business (B2B) buying experiences, including:

• Amicis: The Store Commerce Agent is a voice-first, screen-aware assistant designed for in-the-moment store execution. It can help associates complete high-friction tasks like returns, exchanges, order lookups, and policy checks in Dynamics 365 Commerce using natural voice commands, while adapting to what’s on the POS screen.
• Evenica: The B2B Licensee Product Request Agent uses conversational AI and image recognition to support licensees in finding beverage products. When a product is not available in the catalog, the agent can create a request case to support the product intake process.
• Argano: The Retail Clienteling Agent offers a conversational clienteling experience by bringing together customer insights, product data, and agentic AI into a single, governed workflow. It helps retail associates improve customer relationships by delivering personalized, brand-aligned interactions before, during, and after in-store appointments.
• Sunrise: The Commerce Companion is a suite of retail agents that help simplify everyday store operations across inventory and fulfillment to purchasing and store processes. Using natural language, it is designed to deliver fast, accurate answers and guided actions, which can enable associates to serve customers efficiently while keeping operations moving smoothly.
• Visionet: FashionGPT Agent can turn natural-language shopping intent into real-time retail execution across product, pricing, inventory, and promotions. It drives the end-to-end shopping journey and help turn conversations into measurable actions across channels.

Together, embedded agents, custom-built agents, and partner solutions give retailers flexible entry points into agentic commerce supporting near-term impact while laying the foundation for a more adaptive, AI-enabled operating model across Commerce Anywhere.

Agentic retail with Dynamics 365 in action at NRF 2026

At NRF, we will demonstrate how Dynamics 365 works with Copilot and agentic capabilities to support Commerce Anywhere and more efficient, end-to-end retail operations. We will share examples of how retailers are using Dynamics 365 to evolve their operating models and advance Frontier Firm capabilities.

Visit us during NRF expo hours at Level 3, Booth 4503, and join the related theater sessions at our booth:

• Beyond the Boutique: How Frette Uses AI to Transform Store Experience
  January 11, 2026 (Sunday), 2:00 PM ET
  Session led by Sunrise Technologies
• Reimagine retail business processes with Agentic ERP
  January 13, 2026 (Tuesday), 2:30 PM ET

The future of retail belongs to frontier organizations that can sense, decide, and act in real time. With agentic commerce enabled by Dynamics 365, retailers gain the foundation to move faster with confidence, aligning strategy, execution, and customer experience through intelligent agents that operate seamlessly across every channel. We look forward to connecting with you in New York and exploring how agentic business applications in Dynamics 365 can support your next step forward.

The post Agentic AI in retail: How Dynamics 365 powers Commerce Anywhere appeared first on Microsoft Dynamics 365 Blog.

The way we work is transforming. Generative AI and agentic business applications are catalysts for a profound shift in how we create, collaborate, and make decisions. What once took hours now happens in moments. Ideas move faster, insights surface sooner, and the boundaries between human creativity and machine capability are blurring. This isn’t the future—it’s unfolding now, and it’s changing the very fabric of how businesses operate.

It’s a move from systems of record to systems of action. In this new era, AI agents go beyond support—they help interpret signals, uncover patterns, and initiate actions and continuously optimize processes on your behalf. At Convergence 2025, December 9–12, we’ll explore how organizations can build an AI-first autonomous enterprise powered by data, copilots, and agents working together across Microsoft Dynamics 365 and the Microsoft Cloud.

From automation to autonomy: The AI-first organization

Businesses have long pursued automation to streamline operations. The next leap is autonomy—systems that interpret signals across the business, adapt workflows in real time, and anticipate decisions. Autonomous enterprises go beyond efficiency—they are driven, adaptive, and human-centered, with intelligent systems that understand context, collaborate across processes, and deliver measurable outcomes.

We believe the recognition of Microsoft Dynamics 365 Leader placement in Gartner® Magic Quadrant™ and IDC MarketScape reports reinforces our ability to connect front-end and back-end operations into one intelligent ecosystem. Our leadership is grounded in the breadth of the Microsoft Cloud, the depth of our data estate, and our ability to bring AI, analytics, and business applications together as a unified platform to accelerate end-to-end AI transformation.

Agentic business applications are built on three connected pillars: data, Copilot, and agents—working together to change how work gets done.

1. Data: The foundation of agent autonomy

Most business processes begin with data. Finance close, order-to-cash, customer insights, case resolution, supply chain planning, field service, HR workflows—each depends on complete, connected, trusted information. When this data is fragmented across systems, agents can’t act with autonomy, and AI can only answer questions instead of accelerating outcomes.

Dynamics 365 spans both front-office and back-office operations—customer relationship management (CRM) and enterprise resource planning (ERP)—providing a continuous, end-to-end view of customers, employees, finances, supply chain, and operations. This structured, governed, and auditable data is the backbone of business processes—how work flows, how controls are enforced, and how organizations maintain compliance at scale.

As business model innovation becomes even more important, we continue to invest deeply in these core applications. We’re expanding capabilities across ERP and CRM, investing in bringing Microsoft Fabric, Microsoft Copilot Studio, and Microsoft Power Platform closer to Dynamics 365 than ever before. From connected frontlines to adaptive supply chains, business applications are becoming composable, intelligent, and outcome-driven—helping customers innovate more quickly while maintaining trust, security, and governance, adapt faster, redesign workflows, and build the operational integrity required for agent-powered processes. At Convergence 2025, you’ll see how Dynamics 365 continues to evolve as the operational engine of AI-first organizations.

At Microsoft Ignite 2025, we announced major advances in how agents connect with ERP systems. The Dynamics 365 ERP Model Context Protocol (MCP) server is evolving from static actions to a dynamic, configurable framework that adapts as business needs evolve. A new analytics MCP server extends this capability to structured metrics and insights, supporting agents to reason over governed operational and financial data—not snapshots or exports, but live business signals. Together, these updates unify data, logic, and actions into a common protocol that can simplify integration and accelerate automation.

And with MCP designed for massive scale—including support of millions of ERP actions—organizations gain the performance and extensibility required for agent-powered business processes at enterprise scale.

The entire Microsoft data and application stack—Dynamics 365 ERP and CRM, Dataverse, Fabric, and more—forms the operational engine of agentic transformation. It provides the structure, governance, and adaptability required to support AI-powered business models and next-generation workflows.

2. Microsoft 365 Copilot: Your strategic productivity partner

Copilot continues to help transform productivity across many roles. It helps sales teams move deals forward, finance teams accelerate reconciliation, and service teams resolve issues before they escalate. But Copilot is more than an assistant—it’s the connective layer that links people, data, and systems, understanding intent, orchestrating workflows, and guiding decisions across Dynamics 365, Power Platform, and Microsoft 365.

3. Agents: Plan, decide, and act

We expect AI agents will be core to how businesses operate—planning, deciding, and acting across systems to accelerate outcomes. These agents will interpret signals, identify patterns, and initiate actions to keep the business in motion.

Microsoft’s strategy spans the full agent ecosystem: first-party embedded agents inside Dynamics 365, agents for specialized industries that can be customized and extended by partners, specific partner-built agents, and custom agents created by organizations through Microsoft Copilot Studio. All share the same security, governance, and identity foundation.

For small to mid-sized businesses, Dynamics 365 Business Central brings agents directly into everyday finance and operations. The Sales Order Agent creates, validates, and updates sales orders which can help improve accuracy and speed by reducing manual entry and exception management. The Payables Agent automates vendor invoices and reconciliations, improving control while freeing finance teams from repetitive tasks. Together, these agents help Business Central customers modernize core processes with governed, AI-powered actions that keep work flowing across purchasing, sales, and accounting.

Across Dynamics 365 finance and operations, embedded agents are transforming core processes—from time and expense entry in Project Operations, to supplier outreach in Supply Chain Management, to reconciliations in Finance and technician scheduling in Field Service. These agents help reduce manual effort and bring greater precision and autonomy to everyday operations.

At Convergence 2025, we’re also thrilled to announce the public preview of the Product Change Management Agent Template—an AI-powered solution that transforms how manufacturers manage the process of change across equipment, products, and processes changes. Built on Copilot Studio, the agent automates workflows and connects critical systems, helping teams cut approval times from weeks to days, reduce errors, and bring innovations to market, faster. Learn how customers like Coca-Cola Beverages Africa (CCBA) are using this agent template to optimize their manufacturing operations.

Partner-built agents that extend industry workflows

Partners are building agents that extend domain workflows and connect directly to Dynamics 365 through the MCP. These solutions show how agent-to-agent coordination and cross-system reasoning will define the next era of enterprise automation.

Shop Floor by RSM helps manufacturers gain real-time visibility across production by bringing job details, quality checks, and operational signals into one experience. It can surface issues as they occur and support teams in resolving them quickly, helping to reduce disruptions and maintain consistent output. By connecting workers, data, and actions on the floor, the agent can support more resilient, adaptive manufacturing operations.

The PayFlow Agent by HSO helps finance teams manage vendor payment inquiries with greater speed and accuracy. It analyzes incoming emails, retrieves live payment data from Dynamics 365, and responds with up-to-date status information—which can reduce manual effort and help vendors receive clear, timely communication. The agent streamlines payment cycles and can improve transparency across accounts payable.

The Quality Impact Recall Agent by Cegeka helps organizations identify product quality issues and trace their impact across inventory and customer shipments. It coordinates notifications, guides corrective steps, and streamlines recall preparedness, which can help teams act quickly when risks emerge and maintain trust in the products they deliver.

Factorial connects to the Dynamics 365 Business Central MCP Server to deliver a new agent-to-agent experience. You can use a single Copilot interface to pull, exchange, and act on data across the systems. For example, within expense workflows, Factorial’s agent can request, validate, and reconcile financial data directly with Business Central.

Zensai’s agent integrates with Dynamics 365 Business Central to transform an organization’s operational signals into aligned goals and check-ins inside Microsoft 365. Built in Copilot Studio and connected through MCP for Dynamics 365, the agent converts finance, compliance, HR, and sales insights into structured, cascaded goals within Perform 365. At Convergence 2025, you’ll see how these first-party, partner, and custom-built agents form a connected ecosystem—and how organizations are already using them to move from automation to autonomy.

Convergence 2025

Convergence has always been where our community comes together to learn, connect, and imagine what’s next—and this year we’re reigniting that tradition at a moment of extraordinary change.

Throughout the event you’ll see how organizations are moving from systems of record to systems of agency, and how you can apply these ideas to accelerate your own AI transformation. I’m excited for you to experience everything we’ve been building.

• Learn more about Convergence
• Explore agentic business applications and agentic ERP solutions
• Sign up to receive 2026 Convergence updates

The post The era of agentic business applications arrives at Convergence 2025 appeared first on Microsoft Dynamics 365 Blog.

We’re entering the age of AI agents, a transformative moment reshaping the landscape of business applications and platforms. AI agents aren’t just making incremental improvements, they’re helping to redefine productivity and can fundamentally change how work gets done.

Published today, the 2025 release wave 2 for Microsoft Dynamics 365, Microsoft Power Platform, and Copilot offerings introduces new and improved capabilities that help organizations to harness the full potential of this new era. These plans compile new capabilities slated for release between October 2025 and March 2026.
Integral to the wave 2 plans, AI assistants and agents not only help humans with day-to-day tasks, but also act as proactive partners to drive better business outcomes. Our upcoming release brings that vision to life, helping to make AI not just accessible but an essential component in daily operations. Whether it’s enabling sellers to close deals faster, providing service teams real-time trusted knowledge, or empowering finance professionals with AI-driven reconciliation and analysis, these enhancements can be transformative to the way we all work.

Be sure to stay updated on the latest features and create your personalized release plan using the release planner.

Highlights from Dynamics 365

The 2025 release wave 2 for Dynamics 365 brings new innovation to transform functions across your business.

Microsoft Dynamics 365 Customer Insights – Data enhances Microsoft Copilot and agents with real-time, unified customer profiles, enabling teams to act on insights within their workflow. With enriched data, seamless platform integration, and faster processing, businesses can deliver timely, personalized experiences that boost engagement and conversions.

Microsoft Dynamics 365 Customer Insights – Journeys empowers businesses to craft personalized, AI-driven customer experiences across all touchpoints. With Copilot, agents, and enhanced orchestration tools, teams can engage the right audiences at scale, streamline lead generation, and accelerate growth.

Microsoft Dynamics 365 Sales brings the power of AI to help sellers achieve their targets and automate busywork. Microsoft Copilot delivers actionable insights in the flow of work, while AI agents research and engage leads, drive purchase intent, and proactively bring key insights and emergent deal risks—helping sellers close more deals faster. A reimagined interface reorients sellers from data to insights. Watch this video to discover the new and enhanced features in this release wave for Dynamics 365 Sales.

Microsoft Dynamics 365 Customer Service continues to enhance agentic and Copilot capabilities for case and knowledge management, as well as AI-driven routing.

Microsoft Dynamics 365 Contact Center continues to enhance agentic and Copilot capabilities to automate the service journey across digital and voice channels, along with the introduction of new omnichannel and supervisor capabilities in the 2025 release wave 2.

Microsoft Dynamics 365 Field Service will deliver AI agents, enhanced scheduling tools, mobile usability improvements, and deeper Microsoft 365 integration in the upcoming release wave. With innovations across inspections, vendor coordination, and connectivity with Microsoft Dynamics 365 Project Operations, Field Service empowers organizations to deliver smarter, faster, and more seamless service at scale.

Microsoft Dynamics 365 Finance brings global-scale finance and agentic operations to our customers, including agents that can lead to faster financial close, and provide additional automation and optimization across large scale operations, as well as enhancements to business performance analytics and planning solutions.

Microsoft Dynamics 365 Supply Chain Management can enhance demand planning with event and promotion forecasting, and help improve quality management for sample handling; and the Supplier Communications Agent will automate vendor interactions. New supplier engagement tools and warehouse app upgrades will also be introduced to further streamline operations and boost efficiency.

Microsoft Dynamics 365 Project Operations will continue to deliver powerful enhancements across the project lifecycle. These include improved mobile and browser experiences for time and expense, better project planning with enterprise custom fields, streamlined billing and invoicing workflows, and expanded support for stocked items, investment projects, and migrations to the modern architecture.

Microsoft Dynamics 365 Human Resources can enhance the hire-to-retire journey with Microsoft Entra ID and Microsoft Viva Connections integration to help reduce duplication. New agentic capabilities will be introduced to streamline onboarding with guided experiences and automation. Recruiter assist will also now support job description generation and interview assistance, helping to improve efficiency across hiring and onboarding.

Microsoft Dynamics 365 Commerce advances in-store experiences by providing a mobile-first point-of-sale that provides business continuity even during a business outage. Improvements to the Adyen payment connector allows modern payments like Pay by Link across channels, offering more purchasing options for omnichannel customers. Additionally, omnichannel unified pricing enables retailers to establish more intricate pricing structures, helping them remain competitive.

Microsoft Dynamics 365 Business Central introduces AI agents to enhance efficiency and automation in the 2025 release wave 2. These agents seamlessly integrate to execute complex tasks, generate reports, automate processes, and optimize order creation using natural language processing. Additionally, this release focuses on quality management, subcontracting, sustainability, and e-document capabilities.

Highlights from Microsoft Power Platform and Microsoft Copilot Studio

2025 release wave 2 updates for Microsoft Power Platform bring new and updated ways for organizations to analyze, act on, and automate data to digitally transform their businesses.

Microsoft Copilot Studio continues its journey to make agent creation and operation even easier and more powerful with autonomous agents in Microsoft 365 Copilot, the ability to build complete teams of agents that work seamlessly together, and improved governance for enterprise scalability. Copilot Studio will offer even deeper integration with Azure AI Foundry and the Microsoft Graph, helping to ensure your agents can use the latest AI technology in coordination with your data in Microsoft Graph. Watch this video to discover how the latest enhancements to Copilot Studio can benefit your business.

Microsoft Power Apps enhances human and agent collaboration with a new agent feed to supervise the work of agents and extensible built-in agents for common tasks like enter, explore, visualize, and summarize data. Bring business problems to Plan Designer and a team of agents will help you build enterprise solutions, including apps, agents, Microsoft Power BI reports, and more. Vibe code with the App Agent to create data-connected experiences—just describe what you need or provide an image, and it can be done.

Microsoft Power Pages enables businesses to build secure, data-driven portals effortlessly. In this wave, we will further expedite site building for low-code makers and pro developers to help build intelligent sites for your employees, customers, and partners. The introduction of enhanced security agent features will further empower low-code makers, pro developers, and admins with actionable insights and abilities for securing their websites.

Microsoft Power Automate is transforming how enterprises automate complex business processes through new human-in-the-loop experiences, such as advanced approvals and AI-native capabilities, such as generative actions and intelligent document processing. To manage complex automations at scale, a comprehensive suite of governance, observability, and security controls will be introduced to the Automation Center and Power Platform admin center.

Microsoft Dataverse continues to serve as a trusted low-code data platform, enabling the creation of scalable agents, Copilot applications, and automations. This update introduces enhancements to core agentic capabilities, including Dataverse for Agents and Dataverse Search to support smarter, AI-ready experiences. New features such as Dataverse Model Context Protocol (MCP) Server and AI-powered business logic tools further expand the ability to build dynamic, intelligent solutions grounded in enterprise data.

Microsoft Power Platform governance and administration will become the unified governance hub for managing intelligent agents, agent-driven apps, and automated workflows across the Microsoft ecosystem in this release wave. This will provide a secure, governable, reliable platform for agent development.

Updates to Copilot offerings

Agents for Microsoft 365 Copilot help maximize business impact across sales, service, and finance. Learn more about the 2025 release wave 2 updates for Copilot offerings. Agent updates for sales will help sellers work smarter, engage strategically, and close deals faster. Agent updates for service will expand CRM connectivity and enhance email insights and drafting—all within the tools reps use daily. Updates for finance will offer easily customizable agents that can be launched from familiar tools like Excel, boosting efficiency and insight.

Early access period

Starting August 4, 2025, customers and partners can validate the latest features in a non-production environment. These updates include user experience enhancements that will be automatically enabled in production environments by October 2025. Take advantage of the early access period to test these updates and effectively plan for your customer rollout. Explore the 2025 release wave 2 early access features for Dynamics 365 and Microsoft Power Platform or visit the early access FAQ page for more information.

For a complete list of new capabilities, please refer to the Dynamics 365 2025 release wave 2 plan, the Microsoft Power Platform 2025 release wave 2 plan, and Copilot offerings 2025 release wave 2. We also encourage you to share your feedback in the community forums for Dynamics 365 and Microsoft Power Platform.

The post 2025 release wave 2 plans for Microsoft Dynamics 365, Microsoft Power Platform, and Role-based Microsoft Copilot offerings appeared first on Microsoft Dynamics 365 Blog.

This week, thousands of manufacturers will gather at Hannover Messe 2025 for insights into solutions to unprecedented challenges, from rising energy costs to supply chain disruptions, workforce shortages to geopolitical conflicts. Top of mind for many attendees is how AI agent-led automation, production, and supply chain processes can help empower a high-performance and sustainable industry.

To help answer these questions, Microsoft leaders and industry partners will showcase the very latest AI innovation for manufacturers designed to help address today’s most critical challenges.

Dynamics 365 ERP solutions

Infuse AI across business processes and workflows.

Contact us to learn more

AI agents will transform manufacturing in 2025 and beyond

Moving forward, four transformative trends will set the pace of growth and success in the evolving manufacturing landscape:

• Improving supply chain operations
• Driving operational excellence with operational technology data from siloed sources
• Delivering great customer experience
• Increasing energy efficiency and employee productivity

At the Microsoft expo booth, manufacturers will learn how they can achieve these trends by using agents across critical business processes and workflows with Microsoft Dynamics 365 autonomous ERP solutions.

Improving supply chain operations with AI agents

Manufacturers face increasing supply chain challenges, from fluctuating customer demand to geopolitical uncertainties that can pressure organizations to restructure supply chains or reshore operations to unaffected regions. It’s imperative to have the agility to adapt to rapid demand shifts while operating profitably and keeping costs in check.

AI agents can play a crucial role in manufacturing operations, autonomously monitoring processes for potential disruptions, with the ability to proactively mitigate potential issues before they’re serious issues.

The Supplier Communications Agent in Dynamics 365 autonomously manages interactions with vendors and suppliers to help ensure on-time delivery of purchase orders helping to avoid downstream delays to customers. The agent provides visibility into the supplier’s supply chain and allows teams to spend more time improving supplier relationships and negotiating better contracts, rather than firefighting shortages.

Lifetime Products—a global manufacturer of products ranging from basketball hoops to picnic tables, sheds, and kayaks—depends on Microsoft Dynamics 365 Supply Chain Management to optimize operational capabilities. In addition to handling logistics and supply chain management more effectively, the manufacturer is implementing AI agents to “rebalance” its knowledge workforce to do more with same and be more efficient rather than reduce labor.

“One of our biggest learnings has been to let the autonomous agent run its own calculations. You’ll get a more comprehensive, better result.”

—Sinahi Lopez, Global IT Functional Manager at Lifetime Products

The company is now preparing to deploy the Supplier Communications Agent in Dynamics 365, to autonomously communicate with suppliers to proactively mitigate order delays and supply chain disruptions.

Based on study with IDC, $3.5 million in annual inventory-related cost savings, using Dynamics 365, optimizing working capital​.¹

Achieving operational excellence with operational technology data from various silos

To stay competitive, manufacturers need to optimize operations by reducing costs, minimizing downtime, improving agility, and ensuring efficient production. This requires data-driven decision making that takes advantage of the industrial Internet of Things (IoT), AI-driven automation, integrated data clouds, and edge-to-cloud architectures to enable real-time insights, predictive maintenance, and quality control. Microsoft Dynamics 365 includes applications to manage finance, supply chain, sales, and customer relationships, designed to unify business data, improve efficiency, and simplify decision-making. The applications work seamlessly with Microsoft 365, which enhances productivity and collaboration with leading applications like Word, Excel, and Microsoft Teams, while Azure provides cloud infrastructure and IoT capabilities.

A key innovation is the AI agent, powered by Microsoft Copilot Studio, that automates tasks and streamlines workflows, securely grounded on data sourced from various systems by using Microsoft Dataverse as a central hub. Microsoft Fabric enhances analytics, helping businesses turn data into insights. For customization, Microsoft Power Platform offers low-code tools to build apps and automate processes, while Microsoft AppSource provides industry-specific solutions from Microsoft partners.

Together, these technologies create a connected ecosystem, reducing data silos and enabling businesses to operate more efficiently. With everything working seamlessly, organizations can focus on growth, innovation, and smarter decision-making.

Enerjisa Üretim, Türkiye’s largest private electricity generation company, replaced its legacy asset management system with Dynamics 365—a modern, user-friendly solution that provides end-to-end lifecycle management of all 312,500 assets across 29 power plants.

The organization is also transforming operations with Dynamics 365 and Azure, achieving efficiency, cost reduction, and workforce empowerment. Integration of asset management, IoT, and Microsoft Azure Digital Twins provides real-time insights for predictive maintenance. Unified systems improve data consistency, streamline workflows, and enhance collaboration, setting new standards for operational excellence in energy.

“Our equipment data is the key to operational efficiency. The Asset Management [capabilities] in Dynamics 365 extends the lifespan of critical infrastructure. By leveraging real-time data and advanced analytics, we can predict equipment failures before they happen.”

—Alper Serçe, Deputy General Manager, Enerjisa Üretim

Dynamics 365 integrates seamlessly with Enerjisa Üretim’s external systems like SAP, streamlining operations and enhancing efficiency. Real-time inventory updates from SAP into Dynamics 365 helps ensures that technicians have the right materials. And integration with HRweb and Yüklenici Entegre Sistemi (YES) optimizes resource allocation, matching skills and qualifications to work orders.

Based on study with IDC, 85% reduction in unplanned asset downtime, using Dynamics 365, ensuring smoother operations​.¹

Deliver better customer experiences

Manufacturers are facing intense global competition, making customer experience essential to maintain relevance. To differentiate and retain customer trust, they must reconsider traditional business models and explore new revenue streams like product-as-a-service and aftermarket services.

Dynamics 365 assists manufacturers in transitioning to a product-as-a-service (PaaS) model by integrating IoT, AI, automation, and flexible financial frameworks.

• Dynamics 365 Supply Chain Management and Microsoft Azure IoT enable real-time product performance monitoring and predictive maintenance, reducing downtime, helping to ensure timely spare parts delivery and streamlined logistics, which are important for service-based models.
• Microsoft Dynamics 365 Field Service uses AI and IoT data for a predictive service model, enhancing efficiency and optimizing service contracts to improve customer satisfaction.
• Microsoft Dynamics 365 Finance supports flexible pricing, pay-per-use, and subscription models, converting products into ongoing services.

Hobart Corporation, a provider of commercial food equipment, needed to modernize its field operations to better support nearly 400,000 customers across the United States and Canada and solve inefficiencies in service delivery.

By adopting Microsoft Dynamics 365 Customer Service and Field Service, Hobart standardized processes, improved dispatch accuracy, and provided field technicians with mobile access to real-time inventory and customer data. This transformation enabled quicker response times, improved first-time fix rates, and better parts availability. The solution also facilitated predictive maintenance, ensuring proactive issue resolution before failures occurred.

As a result, Hobart significantly enhanced operational efficiency, customer satisfaction, and workforce productivity, reinforcing its reputation for high-quality service.

Organizations facing similar issues can also use the recently announced Scheduling Operations Agent (SOA) for Dynamics 365 Field Service, now in preview. This AI agent creates optimized schedules for technicians, even as conditions change throughout the workday. Whether it’s traffic delays, double bookings, or last-minute cancellations, the SOA helps ensure that schedules remain efficient.

The SOA uses advanced algorithms to address common scheduling challenges. By considering factors such as technician skill sets, territories, and promised time windows, the SOA maximizes technician utilization and prioritizes work orders effectively. This enhances productivity and helps ensure that customer commitments are met accurately.

Based on study with IDC, 40% faster order and product delivery times, using Dynamics 365, increasing customer satisfaction.¹

Operating sustainably by driving energy and employee efficiencies

Manufacturers are under increasing pressure to improve energy efficiency and reduce their carbon footprint while maintaining productivity. By integrating Microsoft Dynamics 365 ERP solutions and Sustainability Manager in Microsoft Cloud for Sustainability, manufacturers can gain real-time visibility, AI-driven insights, and automated tracking to drive sustainability at scale.

Dynamics 365 ERP collects energy consumption data from IoT sensors, smart meters, and production systems, offering a comprehensive view of energy usage across facilities. This data flows into Microsoft Sustainability Manager, where AI-powered analytics identify inefficiencies, benchmark performance, and recommend optimizations. Manufacturers can track carbon emissions in real time, ensuring they meet sustainability targets.

With predictive analytics and AI-driven workload balancing, manufacturers can optimize machine usage, reduce energy waste, and lower costs. Additionally, optimized supply chain operations help minimize environmental impact through smarter logistics and material sourcing.

Camfil, a leading manufacturer of premium clean air filtration solutions, is using Dynamics 365 to enhance sustainability and profitability. By implementing Dynamics 365 with a standardized data model, Camfil has harmonized its processes across more than 30 production facilities and nearly 6,000 employees.

The integration of Dynamics 365 Finance, Dynamics 365 Supply Chain Management, Dynamics 365 Project Operations, Dynamics 365 Customer Service, and Dynamics 365 Sales has improved operations such as ordering, manufacturing, warehousing, shipping, and invoicing. This harmonization enabled by Dynamics 365 has led to better resource utilization, improved energy efficiency, a more connected and collaborative culture, and enhanced customer satisfaction through continuous innovation in air filtration systems—all contributing to a more sustainable and cost-effective manufacturing operation.

A well-empowered workforce can better manage inventory, demand planning, and supplier interactions, reducing waste and inefficiencies.

Based on study with IDC, 27% more manufacturing processes automated, 20% improvement of productivity across supply chain, procurement, and inventory management teams by using Dynamics 365 AI-powered ERP solutions.¹

Future-proof your manufacturing operations in 2025 

AI-powered solutions for ERP and service systems are more than a technological upgrade. They’re a strategic imperative for manufacturers aiming to improve the supply chain, drive operational excellence on the factory floor, deliver great customer experience, and operate sustainably and efficiently.

If you’re registered for Hannover Messe, we invite you to visit the Microsoft booth (#G06, hall 17) and join Sameer Verma, Microsoft’s GM, Dynamics 365 AI ERP, to learn how Dynamics 365 drives manufacturing excellence with AI agents. The session will take place on Monday, March 31, 2025, at 12 PM Central European Time (UTC +1).

Also, continue to visit the Dynamics 365 blog to learn more about how Dynamics 365 and Microsoft Power Platform are helping retailers reimagine the road ahead; and feel free to contact us to learn more about the Dynamics 365 AI-powered ERP system solutions. 

Source

¹ IDC White Paper, sponsored by Microsoft, The Business Value of Microsoft Dynamics 365 for Manufacturers, doc #US53226425

The post The future of manufacturing with Microsoft Dynamics 365 is here—are you ready? appeared first on Microsoft Dynamics 365 Blog.