Multi Factor Authentication has now become a common practice by all organizations to enhance security.
While enabling MFA for users will not have any effect, for enabling MFA for the system administrator you need to take care of below points:
1) Reauthenticate connections for Power Automate
2) Reauthenticate connections for Power BI.
All the functionality will work as expected once we reauthenticate, if you are the developer and want to connect with XRM Toolbox.
Go to Connect in XRM Toolbox
On selecting OAuth/MFA, enter the environment URL.
In case you want to connect to Production instance, you will have to follow instructions given here
But if it is Sandbox environment, after entering URL>> simply click on Use development Azure AD App
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