You're on Microsoft's stack, so the assumption is that any AI touching your ERP data runs through Microsoft 365 Copilot. Business Central ships an MCP connector that changes that. It lets you drive the system from Claude, from an OpenAI model, or from Copilot, and the choice matters more for a regulated business than it looks at first, because the data guarantee you rely on ends at a different place depending on which one you use.
This came up on a review with a medical group that bills through a practice management system and posts summarized revenue into its accounting platform. Their IT lead had already started testing consumer AI tools and hit the obvious wall: where does the data go, and is it HIPAA-safe? Here is how the two paths actually differ.
The Copilot Path
When you use Microsoft 365 Copilot and reach Business Central data through Work IQ, your ERP records are surfaced to Copilot inside your own tenant. Microsoft's position is that this data stays in your tenant, is not used to train a global model, and leaves a full audit trail. You can see who queried what and where it went, and you can run Microsoft's discovery tooling against it later. For a business that has to answer to an auditor about where protected data traveled, that audit trail is the point.
The MCP Path
The MCP connector lets a tool like Claude reach Business Central through a Claude Code server that makes the web service calls. You still authenticate through an app registration with delegated permissions, so the user has to log in with an account that has access to the underlying tables before any data is exposed. Nothing is wide open. But once records are pulled into the third-party tool, Microsoft's guarantee stops. Whatever that vendor's contract says about training and retention is what governs your data from that point forward. You cannot reach Work IQ through Claude either; that API is Copilot only.
Through Copilot and Work IQ, you keep the audit trail and the in-tenant guarantee. Through an MCP connector to a third-party model, you inherit that vendor's terms the moment data leaves Business Central. For a HIPAA-regulated business, that is the line to examine before enabling either path.
The Decision For A Regulated Business
Model choice is a real advantage of the MCP route. Different frontier models are better at different tasks, and some third-party models cost less to run than metered Copilot usage. Copilot's suite is capable and sometimes more so, but you pay for the Copilot license plus metered billing on top for agent features. So there is a genuine cost-and-capability case for the MCP path.
For a regulated organization, that case does not settle it on its own. The question you sign off is whether you are comfortable with your accounting data being governed by a third-party AI vendor's terms rather than Microsoft's in-tenant guarantee. That is a data-governance decision, not a technical one, and it belongs to whoever owns compliance risk, not to whoever configures the connector. Enable the connector after that conversation, not before it.