What Is Azure API Management and How It Helps Expose D365FO Custom APIs

When I first used Azure API Management (APIM) to expose custom APIs built on Dynamics 365 Finance and Operations (D365FO), I realized how critical it was for building scalable, secure, and well-organized integrations. In complex enterprise environments, exposing APIs directly from D365FO isn’t always straightforward — and without a proper gateway, things can get messy quickly. That’s where APIM fits in. It acts as a smart bridge between your internal systems and the external consumers of your APIs.

If you’re managing custom services in D365FO and need a clean, secure way to share them with partners, mobile apps, or other business systems, this article will help you understand how Azure API Management makes it possible — and powerful.

Why Expose D365FO Custom APIs?

Custom APIs in D365FO allow organizations to tailor data access around their specific business logic. But those APIs need to reach far beyond the ERP itself — to integrate with external portals, mobile apps, logistics tools, or reporting platforms. Direct exposure of D365FO endpoints, however, opens doors to security risks and limited control over usage.

That’s where a managed gateway like APIM becomes necessary. It doesn’t just pass traffic — it gives you the ability to monitor, protect, and optimize every single request that hits your ERP.

Instead of relying on custom middleware or ad-hoc setups, exposing your APIs through APIM lets you deliver controlled access in a standard, scalable way.

What Is Azure API Management?

Azure API Management is a fully managed platform that acts as a central entry point for your APIs — whether they come from D365FO, Azure Functions, Logic Apps, or anywhere else. It wraps your raw API with important enterprise-grade features: authentication, caching, rate limiting, transformation, and analytics.

It consists of three key components:

• API Gateway: The runtime layer that handles all incoming requests and forwards them securely to the backend.
• Developer Portal: A ready-to-use site where consumers can find, test, and subscribe to your APIs.
• Management Plane: Where you configure rules, policies, users, and access controls.

You can apply fine-grained policies per operation — like modifying headers, validating JWT tokens, or even rejecting requests that exceed a quota. This makes APIM not just a proxy, but a full-blown control layer over your services.

How Azure APIM Works with D365FO

So how do you tie it all together? Think of APIM as your front-door. A user (or app) sends a request to an API published on APIM. That request is then authenticated, possibly transformed, and securely forwarded to your D365FO environment.

D365FO APIs are typically OData endpoints exposed via data entities or service groups. To make this work with APIM, you also register D365FO as an application in Azure Active Directory (AAD) and configure OAuth 2.0 access tokens. This ensures that only approved consumers can call your APIs.

Let’s say you’ve built a custom service in D365FO to fetch approved vendor invoices. You publish this as an OData service. Then, inside APIM, you create an API definition that maps to this backend endpoint, wraps it in security policies, and presents it with friendly documentation on your developer portal.

The result? A secure, standardized API interface that integrates seamlessly with the outside world — without exposing your ERP to unnecessary risk.

Benefits of Using Azure APIM with D365FO

The biggest gain is centralized management. Whether you have 2 APIs or 200, APIM gives you one place to handle authentication, rate limits, versioning, and lifecycle changes. You don’t have to duplicate logic or write custom logic for each integration point.

Security is another major win. With built-in support for OAuth2, JWT validation, IP filtering, and throttling, you can enforce policies that match enterprise-grade standards.

On top of that, APIM gives you usage metrics, response time tracking, error logging, and insights into which partners or apps are using what — helping you optimize performance and usage.

Plus, the built-in developer portal makes it easy to onboard internal teams or third-party partners. You can share API documentation, allow test calls, and even automate key distribution.

Now that you understand how Azure API Management supports D365FO custom APIs, you’re ready to take the next step. Follow our complete setup guide to implement this in your environment.

Industries That Benefit from This Setup

This model of exposing D365FO APIs through Azure API Management isn’t limited to a niche. It’s widely useful across industries where ERP data needs to flow smoothly into modern systems.

Manufacturing companies often need to expose production schedules, inventory data, or supplier orders to third-party logistics or warehouse partners. A managed API layer ensures this is done securely and in real time.

In retail and eCommerce, syncing product catalogs, pricing, or customer orders between platforms like Shopify or Salesforce and D365FO becomes seamless through APIM.

Finance and banking sectors benefit from this setup by enabling secure, audited access to general ledger data or custom financial reports — without exposing their core systems directly.

Logistics and transportation firms often automate freight calculations, delivery schedules, or invoicing through integrations built on top of custom APIs.

And in healthcare, compliance and data privacy are critical. APIM ensures external applications get access to approved data sets in a safe and regulated manner, without violating HIPAA or similar standards.

Each of these industries shares one thing: a need to connect ERP data to the broader digital ecosystem — and APIM is the tool that makes that connection controlled and sustainable.

Conclusion

Exposing custom APIs from Dynamics 365 Finance and Operations is essential in today’s connected enterprise environment. But doing it without control puts your ERP — and your data — at risk.

Azure API Management provides a unified, secure, and scalable way to handle these integrations. From user authentication and policy enforcement to analytics and developer onboarding, it brings order to API chaos.

If you’re planning to modernize your D365FO ecosystem, this approach is one of the most effective ways to start. And when you’re ready to set it up yourself, our step-by-step implementation guide will walk you through every detail.