Introduction
A plug-in is imperative logic that should be used only when a declarative process, such as a business rule, flow, or workflow, doesn't meet your requirement.
Fundamentally, a plug-in is merely a .NET assembly that implements an IPlugin interface, which can be found in the Microsoft.CrmSdk.CoreAssemblies NuGet package. The IPlugin interface exposes a single method, Execute, which is where you can place any custom logic that you want to invoke based on whatever event you're handling.
Common scenarios of when to use plug-ins are:
Canceling the event and displaying an error to the user.
Making changes to the data in the operation.
Initiating other actions by using the Organization Service to add automation.
Alternatives to plug-ins
Plug-ins should be considered a last resort in many cases. Although plug-ins are powerful and, if well written, highly performant, it's important to minimize the amount of custom/imperative logic that you place into your system, because it can affect maintainability, upgradability, and so on.
Common alternatives to plug-ins are:
Workflows
Power Automate flows
Calculated and rollup fields
Custom actions
Plug-in considerations
Plug-ins perform better when you consider their performance, capabilities, and ability to run synchronously.
A well-written plug-in will always be the most efficient way to apply business logic to Microsoft Dataverse. However, a poorly written plug-in can create a significant negative impact on the performance of your environment.
Plug-ins provide several capabilities that aren't available with declarative business logic, such as efficiently working with external services in code. Nevertheless, Power Automate is rapidly approaching parity with plug-ins.
If synchronous logic is required for your application, plug-ins might be required. However, on-demand workflows can also run synchronously and should be considered, depending on your requirements.