The initial configuration settings for Microsoft Copilot involve several critical steps that administrators must complete to ensure a successful deployment. Let me break down the essential configuration areas based on the latest guidance.

Prerequisites and Readiness

Before diving into configuration settings, administrators need to establish the foundation. This includes ensuring you have the appropriate licensing subscriptions that support Copilot as an add-on, verifying network requirements are met, and setting up the necessary administrative access across multiple admin centers including the Microsoft 365 admin center, SharePoint admin center, and Microsoft Purview portal.

Step 1: Update Channel Configuration

The first technical configuration decision involves selecting the appropriate update channel for Microsoft 365 Apps. Microsoft 365 Copilot follows the Microsoft 365 Apps standard practice for deployment and updates. It’s available in all update channels, except for Semi-Annual Enterprise Channel.

Your primary options are the Current Channel, which provides the newest features immediately and offers the best experience for Copilot, or the Monthly Enterprise Channel, which provides more predictable monthly releases and allows organizations to validate features before deployment. Preview channels like Current Channel (Preview) and Beta Channel are excellent for testing before broader rollout.

Step 2: License Provisioning and Assignment

License assignment represents a crucial configuration step that goes beyond simple software licensing. Before you assign Copilot licenses, make sure that you provision users and assign Microsoft 365 licenses to users in your tenant.

The process involves accessing the Microsoft 365 admin center, navigating to Billing > Licenses, selecting Microsoft 365 Copilot, and then assigning licenses either to individual users or groups. Once assigned, Copilot appears across Microsoft 365 apps, though users may need to wait up to 24 hours and potentially restart applications for full functionality.

Step 3: Core Configuration Settings via Copilot Control System

The central configuration hub is the Copilot Control System, accessible through the Microsoft 365 admin center under the Copilot section. This system provides centralized access to several critical configuration areas:

License Management: View the status of license assignments and manage user access across your organization.

Data Security and Compliance Controls: Configure how Copilot interacts with your organizational data, including settings for data residency and compliance requirements.

Plugin Configuration: Manage which plugins and external integrations are available to users, controlling how Copilot can extend its functionality.

Web Data Grounding: Enable or disable Copilot’s ability to use web data as grounding information for responses, balancing functionality with security concerns.

User Feedback Management: Configure feedback collection mechanisms and manage feedback submission on behalf of users.

Security Configuration Essentials

Security configuration represents one of the most critical aspects of Copilot setup. The system requires several foundational security measures:

Multifactor Authentication (MFA): Multifactor authentication (MFA) is a critical security measure that requires users to provide two or more verification factors to gain access to a resource such as an application or online account. This should be enabled for all users and configured through Conditional Access policies.

Audit Logging: Enable unified audit logging in the Microsoft Purview portal to capture all user and administrative activities. Configure retention policies based on your compliance requirements and establish regular monitoring procedures.

Data Access Controls: Configure SharePoint Advanced Management policies to control content access and prevent oversharing. This includes implementing restricted SharePoint search to limit discoverability of sensitive content.

Oversharing Prevention Configuration

One of the most important configuration areas involves preventing data oversharing. The configuration process includes identifying your organization’s most popular SharePoint sites, running permission state reports through SharePoint Advanced Management, and cross-referencing these with Microsoft Purview Data Security Posture Management assessments.

Key configuration steps include disabling “everyone except external users” settings at the tenant level, enabling Purview Audit for Copilot interaction monitoring, and implementing access controls and labeling on business-critical sites.

Chat and Interface Configuration

Starting on May 1, 2025, and rolling out over time, Copilot Chat is pinned by default in the navigation bar of the Microsoft 365 Copilot app, Teams, and Outlook for most users who are eligible for Copilot Chat across the web, mobile, and desktop. Administrators can configure whether Copilot is pinned to navigation bars and control user prompting for pinning preferences.

Deployment Phase Configuration

The configuration approach should align with your deployment strategy. During the pilot phase, configure access for a small group of early adopters, typically high-usage Microsoft 365 users across various business groups. This allows you to test configurations and gather feedback before broader deployment.

For the deployment phase, expand license assignments while maintaining focus on data security configurations. During the operational phase, configure monitoring and analytics tools including the Copilot Dashboard from Viva Insights and Microsoft 365 usage reports.

Network and Compliance Configuration

Ensure your network configuration meets Copilot requirements, including proper routing for Microsoft 365 services. Review and configure Conditional Access policies specifically for Copilot scenarios, ensuring they align with your broader security framework while not impeding user productivity.

Ongoing Configuration Management

Configuration isn’t a one-time activity. Establish processes for regularly reviewing and adjusting settings based on usage patterns, security requirements, and organizational changes. This includes monitoring audit logs, reviewing access patterns, and adjusting data protection settings as needed.

The configuration process requires balancing functionality with security, ensuring users can leverage Copilot’s capabilities while maintaining appropriate data protection and compliance standards. Each organization’s specific configuration will depend on their security requirements, compliance obligations, and business needs.