How to Create a New AI Agent in Dynamics 365 — with KDS

In today’s AI-driven business world, organizations are shifting from systems of record to systems of action — where applications don’t just store data but act intelligently on it. Microsoft Dynamics 365 now enables this transformation with AI Agent in Dynamics 365: intelligent assistants that automate workflows, analyze data, and make recommendations directly inside your business applications. 

With Key Dynamics Solutions (KDS), a trusted Microsoft partner, you can easily design, deploy, and manage your own AI Agents in Dynamics 365. Whether it’s automating invoice approvals, predicting cash flow, or simplifying vendor management, KDS helps you turn your Dynamics 365 environment into a truly intelligent business system. 

What Are AI Agents in Dynamics 365? 

AI Agents in Microsoft Dynamics 365 combine Copilot, Azure OpenAI, and Power Platform capabilities to automate decision-making and streamline everyday processes. These agents can chat with users in natural language, connect with Dynamics 365 data, trigger actions in real time, and continuously learn from business outcomes. 

Examples include: 

• Vendor management bots that follow up automatically. 
• Finance agents that generate real-time insights. 
• Supply chain bots that monitor order delays. 

By integrating these capabilities, your finance or operations teams can spend less time on manual tasks and more time on strategic work. 

 

Step-by-Step: How to Create a New AI Agent in Dynamics 365 

Let’s walk through the process — and how KDS supports you at each step. 

Step 1: Define Your AI Use Case 

Start by identifying where automation or intelligence will bring the most value. Common examples include: 

• Approving invoices automatically. 
• Predicting late vendor payments. 
• Summarizing financial statements or reports. 

How KDS Helps: 

Our experts collaborate with you to understand your workflows in Dynamics 365 Finance, SCM, or Sales. We map out your business challenges, identify automation opportunities, and design AI use cases that deliver measurable ROI. 

Step 2: Access Copilot Studio (Power Virtual Agents) 

To begin building your AI Agent: 

• Sign in to Microsoft 365 / Power Platform Admin Center. 
• Navigate to Copilot Studio (Power Virtual Agents). 
• Select Create → Custom Agent. 
• Choose your Dynamics 365 environment (Finance, SCM, or Sales). 

How KDS Helps: 

KDS configures your environment, ensures the right licensing, and sets up secure connections. We also provide pre-built templates and AI models to accelerate development.

 

Step 3: Connect to Dynamics 365 Data 

Next, connect your AI agent to Dynamics 365 data using Dataverse connectors. These allow your agent to access live data such as vendors, journals, invoices, or transactions. 

How KDS Helps: 

KDS ensures your data connections are secure, compliant, and optimised for performance. We design data models that allow the agent to interact with real-time business information — safely and accurately. 

 

Step 4: Add AI Capabilities 

Now, enhance your AI agent with intelligent capabilities: 

• Copilot AI Prompts: For natural language queries like “Show pending vendor invoices.” 
• Azure OpenAI / GPT Models: For reasoning, summarization, and insights. 
• Machine Learning Models: To predict cash flow trends or late payments. 

How KDS Helps: 

We deploy pre-trained or custom AI models using Azure AI & ML services. Our team integrates these models with your D365 data and ensures they align with your finance and business logic.

 

Step 5: Automate Workflows 

After intelligence comes action. Use Power Automate to design workflows that trigger automatically: 

• When an invoice is approved → Send notification in Teams. 
• When a payment delay is detected → Alert finance manager. 
• When a KPI drops → Generate Power BI report automatically. 

How KDS Helps: 

KDS designs and deploys automated workflows that connect Dynamics 365 with Teams, Outlook, and Power BI — enabling seamless and intelligent collaboration across your business. 

 

Step 6: Deploy & Monitor 

Once ready, publish your AI Agent: 

• Deploy it in the Dynamics 365 Finance workspace or Microsoft Teams.
• Monitor performance and usage through the Power Platform Admin Center.
• Continuously refine your prompts and workflows using analytics data. 

How KDS Helps: 

KDS offers ongoing monitoring and optimisation services. We analyse your AI agent’s performance, fine-tune responses, and update models to ensure long-term efficiency and reliability. 

 

Why Choose KDS for AI Agent Implementation? 

Building an AI agent is not just about technology — it’s about creating intelligent business value.
Here’s why leading organisations choose Key Dynamics Solutions for their AI initiatives:

• Microsoft Partner Expertise — Deep experience with Dynamics 365, Power Platform, and Azure AI. 
• Finance Process Understanding — Expertise in D365 Finance ensures your agents align with business goals. 
• Faster Implementation — Pre-built connectors, accelerators, and workflows to reduce development time. 
• Secure & Compliant Setup — Enterprise-grade governance, data protection, and access control. 
• Continuous Improvement — We monitor performance, update models, and help your AI evolve with business needs. 

Best Practices for Building AI Agents in Dynamics 365 

To ensure success, keep these key practices in mind: 

• Start Small, Scale Fast: Begin with one process — such as invoice approvals — and expand gradually. 
• Ensure Data Quality: The accuracy of AI outputs depends on clean, structured Dynamics data. 
• Train Your Teams: Educate users on interacting with AI agents effectively. 
• Governance Matters: Set clear rules for data usage, access, and audit trails. 
• Monitor Performance: Regularly review insights and tune workflows for efficiency.  

Real-World Possibilities 

Microsoft’s roadmap highlights powerful examples of AI agents — such as the Account Reconciliation Agent in Dynamics 365 Finance — which helps teams close books faster and with fewer errors.
With KDS, businesses can build similar domain-specific agents: 

• Finance Agents that predict revenue and automate reports. 
• SCM Agents that track order delays and vendor compliance. 
• Customer Support Agents that respond instantly via Teams or CRM. 

These agents act as digital co-workers — reducing manual effort, improving accuracy, and accelerating business outcomes. 

 

The Future of AI in Dynamics 365 

The next evolution of Dynamics 365 lies in agentic business applications — where intelligent agents autonomously handle end-to-end tasks. With Copilot, Azure AI, and Power Platform integrations, organizations can create an ecosystem of intelligent workflows that self-learn and adapt. 

At Key Dynamics Solutions, we are leading this evolution by combining Microsoft technologies with industry expertise — helping businesses build AI-powered systems that think, act, and deliver value autonomously. 

 

Conclusion 

Creating a new AI Agent in Dynamics 365 isn’t just about adding automation — it’s about reimagining how your business operates. From data integration to intelligent decision-making, AI agents empower teams to move faster, reduce manual workload, and focus on strategic outcomes. 

With KDS as your implementation partner, you gain the tools, expertise, and guidance needed to bring intelligent automation to life — safely, efficiently, and at scale. 

Connect with KDS today and unlock the full potential How to Create a New AI Agent in Dynamics 365 — with KDS

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