Increasing business efficiency with Microsoft 365 Copilot AI agents

AI (artificial intelligence) has come a long way from its early days of powering chatbots and automated emails. With Microsoft’s new Copilot Studio, the evolution continues through AI agents designed to function as digital coworkers that proactively manage tasks and offer smart solutions. This article explains how it works and why it matters for businesses.

What are Microsoft 365 Copilot agents?

In Microsoft 365 Copilot, agents are AI-driven digital entities built using Microsoft Copilot Studio. Unlike traditional AI assistants that rely on direct prompts, agents are multi-turn, task-oriented, and capable of handling complex business logic. Think of them as guided workflows that can respond, decide, and even take action, making them closer to a virtual team member than a support bot.

For example, a company’s finance department could deploy an agent that receives vendor invoice queries, verifies payment status against internal systems, and initiates follow-ups all without human intervention. What makes AI agents a step above simple macros or workflows, which finance teams normally use, is that their decisions and actions are completely autonomous, rooted in data, logic, and context.

Benefits of enabling agents in Microsoft 365 Copilot

Enabling agents improves automation to the Microsoft 365 environment, offering users the following benefits:

Scalable assistance: Agents can manage repetitive or time-consuming queries, freeing up staff to focus on higher-value tasks.
Domain-specific expertise: Organizations can design agents for specific workflows such as HR onboarding, IT support, procurement, etc.
Contextual interaction: Rather than reacting in isolation, agents pull from your data ecosystem (e.g., SharePoint, Microsoft Teams, internal APIs) to provide grounded, meaningful responses.

A support agent, for instance, might access ticket histories, user permissions, and company policies to triage an IT issue before escalating it, something traditional chatbots can’t do effectively.

Understanding agent consumption

Microsoft is introducing a consumption-based pricing model for agents. Instead of paying a flat rate per user or per month, organizations are billed based on actual usage, measured in messages. A message refers to an interaction between a user and an agent (whether initiated directly or indirectly).

This flexible model allows early users to start small and scale as agents integrate into daily operations. Businesses with specific workflows or seasonal needs can use agents without high upfront costs.

Classic and generative answers: Two modes of response

Agents can respond using two main types of outputs:

Classic answers: These are rule-based, deterministic responses driven by decision trees or flows defined by the developer. They’re reliable for consistent, structured tasks like policy queries or form completions.
Generative answers: These use large language models to formulate responses dynamically. They’re particularly useful when users ask open-ended or nuanced questions where a classic answer doesn’t suffice.

For example, a generative agent might summarize key updates from multiple meeting transcripts stored in Microsoft Teams, while a classic agent might simply provide a prewritten policy explanation. Both types of answers can coexist within an agent, depending on the use case, which allows for a more personalized and versatile user experience.

Grounding messages with tenant data

One of the standout capabilities of Copilot agents is tenant graph grounding, which means the agent’s responses are rooted in your organization’s internal data as well as generic web knowledge. Tenant Graph Grounding enables agents to pull contextually relevant insights from your Microsoft Graph, including user calendars, emails, documents, shared chats, and more. This makes the agent’s replies hyper-relevant and less prone to errors or misunderstandings.

Imagine asking an agent, “What’s the latest update on the Q2 marketing campaign?” Instead of giving a vague answer, the agent might pull recent planning docs from SharePoint, quote an email from the campaign lead, and even suggest next steps based on recent meetings.

Currently, Microsoft is rolling out autonomous AI agents in paid preview, with broader availability expected soon. So if you want to take your productivity and collaboration to the next level, keep an eye out for this exciting new feature.

For more exciting updates about Microsoft developments, our experts can help you stay ahead of the curve and even assist you with implementing these new features in your business.