Part 2 – D365 ERP MCP Server: Integrating D365 Finance and Operations Data into Claude Desktop

Introduction

As enterprise systems become increasingly intelligent and interconnected, empowering AI agents with direct access to operational data is a game-changer. Microsoft’s Model Context Protocol (MCP) enables this by allowing AI models to securely interact with structured enterprise systems like Dynamics 365 Finance and Operations (F&O).

As a standards-based interface, the D365 ERP MCP Server can be accessed by any AI agent that supports the Model Context Protocol (MCP)—including agents built in Microsoft Copilot Studio, GitHub Copilot, Visual Studio, and external platforms like Claude Desktop.

This article builds on my previous blog post where I demonstrated the D365 ERP MCP Server‘s enterprise use cases, available tools and how to use the within Microsoft Copilot Studio so make sure that you have executed all the steps mentioned in my previous blog post before executing the steps in this article. In this article, I’ll walk you through the process of integrating the D365 ERP MCP Server with Claude Desktop, enabling Claude to query, interact, perform actions in natural language interaction with live data from D365 Finance and Operations.

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Step 1: Install Claude Desktop

1. Download and install Claude Desktop.
2. Once installed, launch Claude Desktop on your machine.

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Step 2: Copy the D365 ERP MCP Server Connection URL

1. Go to Power Automate and make sure to change to the correct environment by selecting it from the top right.

2. Select Connections on the left navigation pane and select the Microsoft Dataverse connection that you have created as part of the steps in the previous blog post.

3. Select the connection to open it and copy the entire URL from the browser and save it. You need this URL for Claude desktop MCP configuration.

Step 3: Copy the Tenant ID

1. Go to Maker Portal and make sure to change to the correct environment by selecting it from the top right.

2. Select Settings gear and then select Session details

3. Copy the value of the Tenant ID from the Power Apps session details. Make a note of this GUID because it’s used in the configuration steps later.

Step 4: Configure D365 ERP MCP Server in Claude Desktop

1. Open Claude Desktop and navigate to File > Settings by selecting hover on the top left.

2. Select Developer tab and click Edit Config to access the configuration file directory.

3. Open the claude_desktop_config.json file using a text editor.

4. This takes you to the Claude desktop files. Open the claude_desktop_config.json file in a notepad/JSON editor/ VS Code.

5. Replace connection URL and Tenant Id with your connection URL and tenant ID copied in Step 2 and 3.

6. Replace <friendly name> for your D365 ERP MCP server that you can easily remember, for example: ERPMCPServer.

7. Add the following JSON block, replacing the placeholders(highlighted in orange color) with your actual values:

{
  "mcpServers": {
    "<friendly name>": {
      "command": "Microsoft.PowerPlatform.D365ERP.MCP",
      "args": [
        "--ConnectionUrl",
        "<URL you copied from the screen with connection at make.powerautomate.com>",
        "--MCPServerName",
        "ERPMCPServer",
        "--TenantId",
        "<GUID you copied from Tenant ID value of Settings at make.powerapps.com>",
        "--EnableHttpLogging",
        "true",
        "--EnableMsalLogging",
        "false",
        "--Debug",
        "false",
        "--BackendProtocol",
        "HTTP"
      ]
    }
  }
}

8. Save the file and restart Claude using File > Exit.

9. Reopen Claude and sign in using your D365 credentials.

10. Navigate to Search and Tools and confirm that the MCP server appears as ERPMCPServer.

💡 Tip: You can enable or disable specific tools per MCP server in Claude to customize your environment.

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Step 5: Interact with D365 Finance and Operations in Claude Desktop

With the server configured, you can begin querying or performing actions with your D365 Finance and Operations data using natural language prompts. For example:

• What is the total available inventory for item number 1000?
• What is the most cost-effective way to purchase 100 units of item 1000, and which vendor provides the best option?

You can observe Claude seamlessly converting natural language prompts into tool-specific queries, retrieving raw data from the MCP Server, and translating it back into understandable responses.

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Conclusion

By connecting Claude Desktop to the D365 ERP MCP Server, you unlock a conversational interface for interacting with real-time D365 Finance and Operations data. This integration streamlines how business users retrieve, explore, and act on operational data—without writing a single line of code. With Similar steps, beyond Claude Desktop and first-party tools like Microsoft Copilot Studio and GitHub Copilot, the D365 ERP MCP Server can also be integrated with any external AI platform that supports the MCP protocol.