Generative and agentic AI in Dynamics 365: practical gains for customer support teams
Customer expectations keep climbing. Legacy CRM setups-with siloed data and heavy manual entry-are holding support teams back. Agents bounce between tools, data is inconsistent, and customers feel the friction.
"Legacy CRM systems often rely heavily on manual data entry," says Nitasha Chopra, vice president and chief operating officer of business applications at Microsoft. "They're difficult to adapt as businesses grow and are frequently designed more for reporting than for allowing sellers, marketers and service teams to succeed in real time... These conditions no longer exist."
Why Dynamics 365 + Copilot matters for support
Dynamics 365 puts AI at the center of daily work. Copilot in Customer Service generates summaries, drafts responses, and surfaces the right knowledge-so agents resolve issues faster and with more confidence.
Microsoft's HR team used Copilot in Dynamics 365 Customer Service to unify its knowledge base and speed up answers to employees. Results: a 20% increase in case throughput and a 16% boost in Copilot satisfaction. "Copilot transforms lengthy information sources into one crisp, easily digested answer," says Mike Morales, senior service advisor in HR services at Microsoft. "Despite our diverse employee population, we can supply the personalised answers each person wants."
Learn more about Copilot for Customer Service on Microsoft Learn: Dynamics 365 Customer Service.
Agentic AI: let the system work while you support the customer
Agentic AI automates repetitive, multi-step tasks behind the scenes. Chopra notes that copilots and agents together can speed up outcomes: Copilot can summarize recent interactions, draft tailored content, and suggest relevant resources, while an AI agent logs enquiries, triggers follow-ups, and updates records in real time.
For support leaders, this means cleaner handoffs, fewer clicks, and fewer dropped balls. Agents focus on problem-solving and empathy; AI handles the busywork.
Proof from the front lines: Gardens Alive
US retailer Gardens Alive unified finance, CRM and supply chain data on Dynamics 365 in 2022, then added Dynamics 365 Customer Service in 2023 to automate query categorization across channels. Email processing rate rose by 7%.
With the Digital Messaging add-in-featuring AI-driven chatbots built with Power Virtual Agents and grounded in Dynamics data-bot escalation to live agents fell from 50% to 31%. With further improvements, the team expects this to reach 20%.
Trust, privacy and responsible AI
"The AI capabilities in Dynamics 365 are developed with a steadfast commitment to trustworthy AI, guided by our responsible AI principles of fairness, reliability and safety, privacy and security, inclusiveness, transparency and accountability," says Jeff Comstock, corporate vice president of Dynamics 365. Generative features use Azure OpenAI Service with enterprise-grade privacy and security.
Read Microsoft's principles: Responsible AI at Microsoft.
What's new: faster integrations and better agent experiences
At Microsoft Build 2025, new Model Context Protocol (MCP) servers for Dynamics 365 were introduced to simplify connecting systems for AI agents. Translation: less integration overhead and quicker paths to automation.
From October 2025 to March 2026, expect AI updates across Dynamics 365 Sales, Customer Service, Contact Center, Finance and Supply Chain Management-more agent assist, richer analytics, and tighter workflows.
Community feedback keeps the product sharp
Customer voices from events like Community Summit directly influence product direction. "These users don't just adopt the technology, they refine it, challenge it and push it forwards," says John Seifert, CEO of Dynamics Communities. The feedback loop shapes updates, roadmaps and practical guidance.
Seifert sees momentum moving from exploration to adoption, with teams building agents in Copilot Studio or Azure AI Foundry. Short-term wins include automated tasks, higher productivity and more personalised interactions-now becoming standard practice.
Events: where support leaders level up
Community Summit runs 19-23 October in Orlando, Florida, USA. Over 600 sessions, with 100+ focused on AI agents and Copilot. Expect real-world use cases, configuration, change management, and ROI. Programming committees of hands-on users ensure the content is actionable.
Partners extending value for support teams
- Creospark: Omnichannel contact centers unifying interactions across chatbots, email, phone and social. Chatbots leverage Dynamics knowledge bases and Copilot Studio to provide contextual answers that reduce workload and improve CSAT. - Noorez Khamis
- Formpipe: As mandatory e-invoicing expands, Lasernet embedded in Dynamics 365 Finance and Operations keeps AR work in one system, reducing risk and effort for finance-service flows that impact customers. - Mike Rogers
- Konica Minolta Business Solutions: The Business Transformation Suite adds Sales AI (churn prediction, forecasting, segmentation), ESG AI (sustainability reporting), and Insights BI (automated dashboards) to help teams work smarter off one source of truth. - Markus Bauten
- Melissa: Address Validation app for Dynamics 365 with global autocompletion cuts data entry time by 50-75% and keeps CRM records clean-crucial for accurate routing and faster resolutions. - John DeMatteo
- M-Files: Stores content in Microsoft 365 via SharePoint Embedded, integrates with Microsoft Copilot, and lets agents access AI-curated documents from Dynamics entities like accounts and opportunities-while automating governance and compliance. - Yohan Lobo
- Toolio (retail planning): Next-gen planning tools give merchandising and planning teams the visibility to make quicker decisions and spend more time on strategy-removing spreadsheet chaos that often spills into service issues. - Kimberley McKinley
Partners also drive large-scale modernization. Covenant helped the Illinois Mine Subsidence Insurance Fraud replace a legacy system with Dynamics 365 Business Central, Power BI and Microsoft Fabric-unifying data and automating claims and surveys, cutting the surveying team's administrative burden by 300%.
Action checklist for customer support leaders
- Ground your knowledge base in Dynamics 365 and enable Copilot in Customer Service for summarization and suggested replies.
- Deploy the Digital Messaging add-in and a Copilot Studio or Power Virtual Agents bot; define clear escalation rules and measure deflection and CSAT.
- Use agentic workflows to automate categorization, follow-ups, and case updates across channels.
- Adopt MCP-based integrations to connect key systems (billing, logistics, identity) with less custom work.
- Track outcomes weekly: first response time, time to resolution, deflection rate, agent effort (clicks/notes), and customer sentiment.
- Engage a partner for data hygiene and content governance; clean data is the fastest way to better AI answers.
- Invest in frontline training on prompts, escalations, and AI-aided quality; upskill continuously.
Need structured training for your team? Explore role-based programs here: AI courses by job.
The takeaway
Support teams don't need bigger to-do lists-they need systems that do the work with them. Dynamics 365 with Copilot and agentic AI reduces manual effort, sharpens responses, and connects every interaction to the right data.
The result: faster resolutions, happier customers and agents who can focus on what matters-clear answers and trusted outcomes.
Your membership also unlocks:
