Create and Use Business Skills in Dynamics 365 Using the Dataverse MCP Server

We spend a lot of our time in Dynamics 365 CRM watching the same problem repeat itself in different forms: an agent, a bot, or a Copilot integration has data access, but no idea how our organization actually wants a task done. Give an AI agent the right permissions and it can read and write records all day. But ask it to “log this call the way we normally log it” and it has no reference point. Every agent ends up guessing, and every guess looks a little different.

This is exactly the gap Business Skills in Dataverse are meant to close. Instead of teaching an agent our process every single time through a long prompt, we write the process once, save it inside Dataverse, and any connected agent can pick it up and follow it consistently. We picked one everyday scenario, a support call getting logged against a Case, and tested the whole thing end to end using an AI agent connected through the Dataverse MCP server. This blog walks through exactly what we did.

What Is a Business Skill?

A Business Skill is a plain-language set of instructions stored inside Dataverse. It describes how a specific piece of work should get done: the steps involved, the information needed, and any rules that apply. Think of it as a written SOP, except this one is readable by an AI agent, not just a human.

The skill has three parts:

• Description – a short line telling the agent when this skill applies. This is what the agent scans through to decide whether a skill is relevant to what the user just asked.
• Instructions – the actual step-by-step process, written in markdown.
• Resources (optional) – a supporting file, like a policy document, that the agent can refer to.

Once saved, any agent connected to that Dataverse environment can discover the skill and follow it, whether that agent is sitting in Copilot Studio, Microsoft 365 Copilot, or, in our case, a coding agent connected through the Dataverse MCP server. The MCP server is simply one of the doors an agent can walk through to reach these skills; it is not something the feature depends on.

Prerequisites

Before starting, make sure these are in place:

• Managed Environment – Business Skills only work inside a Managed Environment. Power Platform Admin Center → Environments → select your environment → enable Managed Environment.
• Dataverse intelligence turned on – Power Platform Admin Center → your environment → Settings → Product → Features → Dataverse intelligence → turn on “Turn on Dataverse intelligence for agents and AI experiences.”
• Dataverse MCP server enabled – same Features page → Dataverse Model Context Protocol → allow MCP clients to interact with the Dataverse MCP server.
• A connected agent client – we used VS Code with the GitHub Copilot extension in Agent mode. If you plan to use a client other than Copilot Studio, remember to also allow that specific client under Advanced Settings → Allowed MCP Clients. As shown in the screenshot below... Read More