Using Tallyfy MCP Server with Microsoft Copilot Studio

MCP Client Compatibility

An MCP server can be used by any MCP client that supports it. Although you can use Tallyfy’s MCP server with common AI platforms like OpenAI, Claude or Microsoft Copilot Studio - the UI and ability to do useful work in real life is limited by many factors which are highlighted in this page. Tallyfy is developing its own fully-featured chat UI which will solve all the major problems of using MCP servers with mainstream text-chat AI providers. However, to start using MCP immediately - we recommend adding it to your AI subscription so that you can get the value and benefits immediately. You can additionally use the fully featured Tallyfy-specific AI interface when we launch it.

Overview

Microsoft Copilot Studio provides enterprise-grade support for Model Context Protocol (MCP), enabling organizations to connect AI agents with external data sources, tools, and business systems. By integrating Tallyfy’s MCP server with Copilot Studio, you can build intelligent agents that automate workflows, manage processes, and interact with your Tallyfy data using natural language.

This guide demonstrates how to configure Tallyfy’s MCP server with Microsoft Copilot Studio, leverage its unique enterprise features, understand limitations, and implement best practices for production deployments.

Microsoft Copilot Studio MCP support status

As of January 2025, Microsoft Copilot Studio’s MCP implementation includes:

• General availability: Full MCP support across all Copilot Studio plans
• Transport methods: Streamable HTTP (recommended) and Server-Sent Events (SSE, in preview)
• Enterprise features: Virtual Network integration, Data Loss Prevention (DLP), multiple authentication methods
• Platform integration: Native Power Platform connector infrastructure
• Prebuilt connectors: Dataverse, Dynamics 365 (Sales, Finance, Supply Chain, Service), Microsoft Fabric

Note: SSE transport support remains in preview and will be deprecated in August 2025. Microsoft recommends using Streamable HTTP for new implementations.

Prerequisites

Before setting up the integration, ensure you have:

• Microsoft Copilot Studio license (trial or paid)
• Tallyfy API key (available from your Tallyfy organization settings)
• Power Apps or Power Automate access (for creating custom connectors)
• Generative Orchestration enabled in your Copilot Studio agent
• Environment in a supported region (check Microsoft documentation for current availability)

Setting up Tallyfy MCP Server with Microsoft Copilot Studio

1. Create an MCP server for Tallyfy

   First, develop an MCP server that exposes Tallyfy’s capabilities. You can use Microsoft’s SDKs or deploy to Azure:

   // Example using Node.js on Azure Functions
   const { createMcpServer } = require('@microsoft/mcp-sdk');
   const axios = require('axios');
   
   module.exports = async function (context, req) {
     const server = createMcpServer({
       name: 'Tallyfy MCP Server',
       version: '1.0.0',
       tools: [
         {
           name: 'search_tasks',
           description: 'Search for tasks in Tallyfy',
           parameters: {
             query: { type: 'string', required: true },
             status: { type: 'string', enum: ['open', 'completed', 'overdue'] }
           },
           handler: async (params) => {
             const response = await axios.get('https://mcp.tallyfy.com/tasks', {
               headers: { 'Authorization': `Bearer ${process.env.TALLYFY_API_KEY}` },
               params: { q: params.query, status: params.status }
             });
             return response.data;
           }
         }
       ]
     });
   
     context.res = await server.handleRequest(req);
   };

2. Create an OpenAPI specification

   Create a YAML file describing your MCP server for the Power Platform connector:

   swagger: '2.0'
   info:
     title: Tallyfy MCP Server
     description: MCP server for Tallyfy workflow management
     version: 1.0.0
   host: tallyfy-mcp.azurewebsites.net
   basePath: /api
   schemes:
     - https
   paths:
     /mcp:
       post:
         summary: Tallyfy Workflow Management Server
         x-ms-agentic-protocol: mcp-streamable-1.0
         operationId: InvokeMCP
         parameters:
           - name: Authorization
             in: header
             required: true
             type: string
             description: Bearer token for authentication
         responses:
           '200':
             description: Success
   securityDefinitions:
     apiKey:
       type: apiKey
       in: header
       name: Authorization

3. Create a custom connector in Power Apps

   1. Navigate to your Copilot Studio agent
   2. Go to Tools → Add a tool → New tool → Custom connector
   3. In Power Apps, select New custom connector → Import OpenAPI file
   4. Import your YAML specification and configure authentication

4. Configure authentication

   In the connector configuration:

   • Set authentication type to API Key
   • Configure the header name as Authorization
   • Set the prefix to Bearer
   • Test the connection with your Tallyfy API key

5. Add the MCP connector to your agent

   Back in Copilot Studio:

   1. Select Tools → Add a tool → Model Context Protocol
   2. Choose your Tallyfy MCP connector from the list
   3. Authorize the connection with your credentials
   4. Select Add to agent or Add and configure

6. Configure DLP policies (optional)

   For enterprise deployments:

   1. Navigate to Power Platform Admin Center
   2. Create DLP policies to control data flow
   3. Apply policies to your Copilot Studio environment
   4. Configure connector classifications (Business/Non-Business/Blocked)

7. Test the integration

   In your Copilot Studio agent, test with queries like:

   "Find all open tasks assigned to the sales team"
   "Show me overdue processes for customer onboarding"
   "Create a task for reviewing the Q4 budget"

Practical demonstrations

Example 1: Multi-agent orchestration

Scenario: Coordinate multiple agents for complex workflows.

User prompt:

Start the employee onboarding process for Jane Smith, assign tasks to HR and IT, and schedule training sessions.

Copilot Studio with MCP will:

1. Primary agent receives the request
2. Delegates to HR agent for documentation tasks via Tallyfy
3. Delegates to IT agent for system access setup
4. Delegates to Training agent for session scheduling
5. Monitors progress across all sub-agents
6. Reports consolidated status back to user

Example 2: Power Platform integration

Scenario: Combine Tallyfy workflows with Microsoft tools.

User prompt:

When a new sales opportunity is created in Dynamics 365, start our proposal process in Tallyfy and create a Teams channel for collaboration.

Implementation:

1. Power Automate flow triggers on Dynamics 365 opportunity
2. MCP server creates Tallyfy process instance
3. Teams connector creates dedicated channel
4. Agent monitors and reports progress

Example 3: Enterprise compliance workflow

Scenario: Automated compliance checking with approvals.

User prompt:

Review all completed audit processes this quarter and generate a compliance report with any violations highlighted.

Copilot Studio with MCP will:

1. Query Tallyfy for audit process data
2. Analyze completion times against SLAs
3. Check for required approvals
4. Generate formatted report in SharePoint
5. Route to compliance team if violations found

Unique Microsoft Copilot Studio features

1. Enterprise security and governance

Copilot Studio’s MCP implementation leverages Microsoft’s enterprise infrastructure:

• Virtual Network (VNet) integration: Isolate MCP traffic within your network
• Data Loss Prevention (DLP): Apply policies to prevent data exfiltration
• Azure AD authentication: Leverage existing identity management
• Compliance certifications: Inherit Microsoft’s compliance framework

2. Power Platform ecosystem

Deep integration with Microsoft’s low-code platform:

• Power Automate flows: Trigger complex workflows from MCP actions
• Power Apps integration: Build custom UIs for Tallyfy data
• Dataverse storage: Store workflow metadata in Microsoft’s database
• Power BI reporting: Create dashboards from Tallyfy analytics

3. Multi-agent orchestration

Copilot Studio excels at coordinating multiple agents:

• Delegate tasks between specialized agents
• Maintain context across agent handoffs
• Central monitoring of multi-agent workflows
• Built-in error handling and fallback mechanisms

4. Tools and prompts framework

Centralized management of reusable components:

• Prompt library: Create and share custom prompts across agents
• Tool catalog: Browse and install prebuilt MCP connectors
• Version control: Track changes to tools and prompts
• Testing framework: Validate tools before deployment

Limitations in Microsoft Copilot Studio

While powerful, certain limitations exist when using MCP with Copilot Studio:

1. Licensing complexity

Challenge: Multiple license tiers with varying capabilities.

Limitations:

• MCP requires Generative Orchestration (additional cost)
• Message limits vary by plan (25K to 200K messages/month)
• Some features require Power Platform licenses
• Multi-agent orchestration in preview for select customers

2. Regional availability

Challenge: Not all features available globally.

Limitations:

• MCP available in limited regions initially
• Data residency requirements may restrict usage
• Preview features often US-only at launch
• Compliance varies by geography

3. Connector development overhead

Challenge: Creating custom connectors requires additional steps.

Limitations:

• Must create OpenAPI specifications
• Power Apps/Automate knowledge needed
• Testing more complex than direct MCP
• Versioning and updates require republishing

4. Performance considerations

Challenge: Enterprise features add latency.

Limitations:

• DLP policy evaluation adds processing time
• VNet routing may increase response times
• Large result sets require pagination
• Rate limits shared across Power Platform

Ideal use cases for Copilot Studio + Tallyfy MCP

1. Enterprise workflow automation

Strength: Leveraging Microsoft’s ecosystem for end-to-end automation.

Example:

"When a purchase order exceeds $50,000 in Dynamics 365, initiate our approval workflow in Tallyfy, notify stakeholders in Teams, and track in Power BI."

2. Compliance and audit management

Strength: Built-in governance and security features.

Example:

"Monitor all SOX compliance processes, ensure proper segregation of duties, and generate audit reports with full trail documentation."

3. Cross-functional process orchestration

Strength: Multi-agent coordination capabilities.

Example:

"Coordinate our product launch process across marketing, sales, and operations teams, with each department's agent handling their specific tasks."

4. Intelligent process mining

Strength: Analytics and AI-powered insights.

Example:

"Analyze our customer service processes to identify bottlenecks, suggest optimizations, and automatically implement approved changes."

5. Regulated industry workflows

Strength: Enterprise compliance and security.

Example:

"Manage our FDA submission process with full audit trails, approval chains, and automatic compliance checking at each step."

Security considerations

When deploying Tallyfy MCP in Copilot Studio:

1. Network security

   • Deploy MCP servers within VNet for isolation
   • Use Private Endpoints for Azure services
   • Implement Web Application Firewall (WAF) rules
   • Enable DDoS protection for public endpoints

2. Authentication and authorization

   • Use Azure AD for user authentication
   • Implement service principal authentication for server-to-server
   • Apply conditional access policies
   • Enable multi-factor authentication

3. Data protection

   • Classify data sensitivity levels
   • Apply DLP policies based on classification
   • Enable encryption at rest and in transit
   • Implement data retention policies

4. Monitoring and compliance

   • Enable Azure Monitor for MCP servers
   • Configure alerts for anomalous behavior
   • Regular security assessments
   • Maintain audit logs for compliance

Deployment architectures

Basic deployment (Small organizations)

[Copilot Studio] → [Custom Connector] → [Azure Function MCP Server] → [Tallyfy API]

Enterprise deployment (Large organizations)

[Copilot Studio]
    ↓ (VNet Integration)
[API Management]
    ↓ (Private Endpoint)
[App Service Environment]
    ├── [MCP Server Instance 1]
    ├── [MCP Server Instance 2]
    └── [Load Balancer]
         ↓ (Managed Identity)
    [Tallyfy API]

Hybrid deployment (Multi-cloud)

[Copilot Studio] → [ExpressRoute] → [On-premises MCP Server] → [Tallyfy Private Instance]
                 ↘                                           ↗
                   [Azure MCP Server] → [Tallyfy Cloud]

Best practices

1. Start with prebuilt connectors: Use Microsoft’s MCP connectors as templates
2. Implement retry logic: Handle transient failures gracefully
3. Use managed identities: Avoid storing credentials in code
4. Monitor usage: Track message consumption against limits
5. Plan for scale: Design for multi-agent scenarios from the start
6. Test extensively: Use Copilot Studio’s testing framework
7. Document thoroughly: Maintain clear documentation for IT teams

Known issues and workarounds (January 2025)

1. SSE endpoint requirements: Must return full URI (not relative paths)
2. Tool naming conflicts: Prefix Tallyfy tools to avoid collisions
3. Large payload handling: Implement pagination for result sets over 100 items
4. Session timeout: Implement keep-alive mechanisms for long-running operations
5. Regional latency: Deploy MCP servers in same region as Copilot Studio

Future outlook

Microsoft’s roadmap for MCP in Copilot Studio includes:

• Enhanced multi-agent capabilities: More sophisticated orchestration patterns
• Improved debugging tools: Better visibility into MCP interactions
• Expanded connector marketplace: More prebuilt enterprise connectors
• Advanced security features: Zero-trust architecture support
• Performance optimizations: Reduced latency and higher throughput

Conclusion

Microsoft Copilot Studio’s MCP implementation brings enterprise-grade capabilities to Tallyfy workflow automation. While the setup process is more complex than simpler alternatives, the benefits include:

• Robust security and compliance features
• Deep integration with Microsoft ecosystem
• Powerful multi-agent orchestration
• Scalable enterprise architecture

Organizations already invested in the Microsoft ecosystem will find Copilot Studio’s MCP support provides a natural path to intelligent workflow automation with Tallyfy.

Related articles

Integrations > MCP Server

Tallyfy’s MCP Server enables natural language interaction with workflows through AI assistants by providing tools for searching tasks and processes managing users and templates analyzing workflow health and creating automation rules without requiring API knowledge.

Mcp Server > Using Tallyfy MCP Server with Claude (Text Chat)

Claude Desktop provides native MCP integration enabling seamless workflow management through natural language commands that connect directly to Tallyfy’s API for task searching process analysis and automated reporting while maintaining security through local configuration and offering unique features like persistent project context and local file system access.

Mcp Server > Using Tallyfy MCP Server with ChatGPT

ChatGPT Enterprise Team and Education users can now connect to Tallyfy’s MCP server through Deep Research enabling natural language workflow management with powerful search and analysis capabilities while being limited by text-based interactions that lack visual process tracking form field interactions and real-time collaboration features making it best suited as a complement to Tallyfy’s native interface rather than a replacement.

Mcp Server > Using SSO with MCP servers

SSO integration with MCP servers enables seamless enterprise AI authentication by allowing users to authenticate once with corporate credentials and access multiple AI-integrated tools without repeated login prompts while addressing compliance challenges through centralized identity governance and enhanced security controls.