Every organization must follow a Microsoft 365 Copilot Optimization Assessment Checklist, especially before buying licenses.

It ensures that their environment is Copilot-ready. Also, their sensitive data will be safe with AI! Preventing common Copilot issues like “How do I stop Copilot from seeing private files like HR files or salaries?”

So, check out this detailed, enterprise-grade guide. It will help you with exact steps to get ready for Copilot. And prevent data leaks. In this “Copilot Optimization Assessment Checklist”, we will precisely answer the following queries:

  • How to get ready for Copilot?
  • How to stop Copilot from seeing the private files?
  • How to make sure Copilot gives the right answers?
  • How to Protect Confidential Data from Copilot?
  • And most importantly, how to merge Office 365 to get Copilot working for everyone?

So, stay tuned till the end!

What You’ll Learn Hide
  1. How to Get Ready for Copilot? A 4-Step Assessment Checklist
  2. How Should I Implement Copilot in Microsoft 365 Tenant After a Merger or Acquisition?
  3. Author’s Final Words
  4. FAQs (Frequently Asked Questions)

How to Get Ready for Copilot? A 4-Step Assessment Checklist

Here’s a complete, four-step checklist to prepare for Copilot Implementation:

Step 1: Check Technical & Licensing Prerequisites

Verifying Microsoft Copilot compatibility with your core systems is the first step of the Copilot optimization assessment checklist. If your existing infrastructure doesn’t support the Copilot add-on, it will not appear in user applications.

So, here’s what you have to do:

  • Since Copilot is an add-on. Ensure that each targeted user is using a base license. It can be either of the following license types:
    • Microsoft 365 E3
    • Microsoft 365 E5
    • Business Standard
    • Business Premium
  • Copilot features can’t be accessed on older or outdated software builds -moving to the correct & current channel is the solution. So, check your endpoints and switch all pilot users (a group of individuals who test a new service in a real-world environment) to the Current Channel or Monthly Enterprise Channel.

Note: Users on the Semi-Annual Enterprise Channel are also required to move. As they’re not eligible to use Copilot in desktop apps like Word or Excel.

  • You might not know, but the Copilot depends on real-time data streaming. What it means is that if your firewalls or VPNs abruptly dismiss long-running WebSockets, Copilot will time out repeatedly or throw errors. So, the best practice is to make sure that your network allows WebSockets connections.

Step 2: Review Security & Permissions (Audit Overshared Links)

As we know, Copilot runs on data and surfaces the information based on it. This makes identity controls (like Multi-Factor Authentication across all accounts) non-negotiable. Also, “Oversharing” is the highest-risk area when planning for Copilot. Ignoring it is like giving a pass to base-level staff to access sensitive business information.

  • Find sites with excess external guest access and open sharing links. To do so, create a detailed permission state report using the SharePoint Admin Center.
  • Delete “Everyone Except External Users” (EEEU) groups. Because it is the most common cause of internal data leaks. Users use this respective group to bypass permission breakers. So, scan your document libraries and systematically purge EEEU (from sensitive HR, Finance, Executive libraries. Also, replace it with controlled Microsoft 365 Groups. It will stop Copilot from seeing private files.
  • Configure a mandatory expiration policy for all “Anyone with the link” URLs using Microsoft 365 Admin Center. Simply go to Org settings >> SharePoint. Also, disable anonymous sharing completely for highly sensitive sites.
  • Locate document libraries with individual files and folders that have different permissions. Specifically, that can bypass the parent site’s security. Exercising it will restore broken permission inheritance. And make sure that every time you revoke access at the site level, it applies to every file in it.
  • You can also automate this manual process of clicking on the SharePoint Folder and finding broken permissions. Simply install the modern PnP PowerShell by running the prompt: Install-Module PnP.PowerShell -Scope CurrentUser. Next, copy and paste the given code in PowerShell:

# Parameters – Change these to match your environment
$SiteURL = “https://yourtenant.sharepoint.com/sites/TargetSite”
$CSVPath = “C:\Temp\BrokenInheritanceReport.csv”

# Connect to the SharePoint Online Site
# Use -Interactive for multi-factor authentication (MFA) environments
Connect-PnPOnline -Url $SiteURL -Interactive

Write-Host “Starting audit for unique permissions on: $SiteURL” -ForegroundColor Cyan

# Array to store the audit results
$ReportResults = @()

# 1. Fetch all Lists and Document Libraries in the site
$AllLists = Get-PnPList -Includes HasUniqueRoleAssignments, DefaultViewUrl

foreach ($List in $AllLists) {
# Skip hidden internal system lists and catalogs
if ($List.Hidden -or $List.IsCatalog) { continue }

Write-Host “Analyzing Library: $($List.Title)…” -ForegroundColor Yellow

# Check if the Library itself has broken inheritance
if ($List.HasUniqueRoleAssignments -eq $true) {
$ReportResults += [PSCustomObject]@{
“Object Type” = “Document Library / List”
“Title” = $List.Title
“Relative URL” = $List.DefaultViewUrl
“Status” = “Broken Inheritance (Unique Permissions)”
}
}

# 2. Query all items/folders inside the library (Using PageSize to avoid throttling)
$ListItems = Get-PnPListItem -List $List -PageSize 500 -Fields “FileLeafRef”, “FileRef”, “HasUniqueRoleAssignments”

foreach ($Item in $ListItems) {
# Check if the specific folder or file has unique assignments
if ($Item.HasUniqueRoleAssignments -eq $true) {

# Determine if it’s a file or a folder
$ItemType = “File”
if ($null -ne $Item[“FileSystemObjectType”] -and $Item[“FileSystemObjectType”] -eq “Folder”) {
$ItemType = “Folder”
}

$ReportResults += [PSCustomObject]@{
“Object Type” = $ItemType
“Title” = $Item[“FileLeafRef”]
“Relative URL” = $Item[“FileRef”]
“Status” = “Broken Inheritance (Unique Permissions)”
}
}
}
}

# 3. Export the data to a CSV file
if ($ReportResults.Count -gt 0) {
# Ensure destination folder exists
$TargetFolder = Split-Path $CSVPath
if (!(Test-Path $TargetFolder)) { New-Item -ItemType Directory -Path $TargetFolder | Out-Null }

$ReportResults | Export-Csv -Path $CSVPath -NoTypeInformation -Encoding UTF8
Write-Host “Audit Complete! File exported to: $CSVPath” -ForegroundColor Green
} else {
Write-Host “Audit Complete! No broken permission inheritances found. Your content structure is completely clean.” -ForegroundColor Green
}

# Disconnect session
Disconnect-PnPOnline

Step 3: Filter Out “Dark Data” (Wipe Out Old Files & Policies)

“Copilot is generating inaccurate responses” is the most common issue companies encounter when using Copilot. This phenomenon is officially termed “AI grounding failure”.

So, how to make sure Copilot gives the right answers?

  • Begin by identifying the “Dark Data” (Redundant, Obsolete, Trivial) data. Once this ROT data is determined, remove it. Use SharePoint Advanced Management (SAM) or the native built-in storage metric for it. These robust tools will help you in locating Teams and SharePoint sites with zero activity in the last 1 year. If you don’t want to delete it, archive it so that Copilot uses this data for future responses.

And how to protect confidential data from Copilot?

  • Applying Microsoft Pureview Sensitivity Labels is another recommended practice for IT admins to protect confidential data from Copilot. The Pureview labels decide how Copilot can use the file, even in the public folder. Simply provide your data taxonomy (organizing data into structured categories) to Microsoft Pureview.

Check out the table attached below to understand how Pureview Labels dictate the Copilot behavior.

Pureview Labels Copilot Behaviour
General/Public Fully Indexed. Allowed for AI use.
Internal Only Indexed securely.
Confidential Restricted. Implements Data Loss Prevention(DLP) policies to prevent Copilot from accessing the file. Including generating external content or emails.
Highly-Confidential Excluded. Encrypted via Microsoft Pureview. Completely blocking Copilot and Agentic AI from using these files.

Step 4: Pilot Planning and Defining Success Metrics

Deploying Copilot is impractical if it cannot increase efficiency and provide value. Therefore, a systematic pilot planning play can’t be ignored, followed by defining success metrics.

  • It is strictly advised not to deploy Copilot to the entire company immediately.
  • Select 20 to 50 users from different departments (Finance, IT, Marketing). And since you’re evaluating how an average user in your organization interacts with AI, avoid picking technical experts and tech-savvy employees.
  • Organizations are required to establish a success metric for Copilot to quantify its performance. So, monitor specific workflows like:“Did Copilot reduce the time it takes to draft a client proposal from 4 hours to 1 hour?”
    “Did Copilot eliminate the need for an executive to manually summarize pipeline meetings?”
  • Use Microsoft Copilot Dashboard (powered by Viva Insights) to understand how effectively users are using Copilot. The Copilot Dashboard will provide you with the actual adoption metrics. And if you find that users are treating Copilot like a regular search engine, direct your IT teams to train your employees in targeted prompt training.

SysTools Suggests: How to Use Microsoft 365 Copilot Like a Pro? A Beginner-Friendly Guide!

How Should I Implement Copilot in Microsoft 365 Tenant After a Merger or Acquisition?

An Office 365 tenant-to-tenant migration must be your first step after a merger, acquisition, or internal restructuring. It will consolidate your fragmented data across multiple Office 365 tenants into a single, unified tenant.

It prevents silos and allows AI tools like Microsoft Copilot to accurately read, summarize, and deliver enterprise-wide data.

But the biggest pain point for IT administrators is that Microsoft doesn’t provide a native option to move a tenant to another. And, if you attempt to move forward with offloading and re-uploading mailboxes, it can result in:

  • Flattened Folder Structure
  • Broken Compliance Records
  • Massive User Downtime

So, what is the solution? How can IT admins combine Tenant and implement Copilot across their infrastructure?

The missing piece is: SysTools Office 365-to-Office 365 Migration Tool!

  • The first choice of IT admins across the globe when it comes to shifting Office 365 tenants. It automates this complex migration process and promises a secure, zero-downtime tenant consolidation.
  • It is highly capable of transferring complete mailbox data (emails, contacts, calendar, etc) from OneDrive -including Shared Mailbox data, Teams chats, and SharePoint sites.
  • And the feature that IT leaders applaud the most on various forums is Delta Migration. It allows freshly arrived items to migrate during the tenant unification.

So, let’s see how to automate the Microsoft 365 tenant consolidation:

Step 1: Tap the download button and install the migration tool.

Download Now Purchase Now

Step 2: Right-click “Microsoft 365” In the “Source” and “Target” section.

Right-click"Microsoft 365” In the "Source" and "Target" section.

Step 3: Tick the Workloads (Email, Contacts, Calendars) checkbox >> implement a date filter >> press “Next”.

Tick the Workloads (Email, Contacts, Calendars) checkbox >> implement a date filter >> press "Next".

Step 4: Type out Admin Email and APP ID (In the Source window) >> tap “Next”.

Type out Admin Email and APP ID (In the Source window) >> tap "Next".

Step 5: Fill out the Admin’s Email and App ID (In the Destination window).

Fill out the Admin’s Email and App ID (In the Destination window)

Step 6: Now, click one of the following options:

  • Fetch them directly
  • Import from a pomade CSV
  • Or, download the blank template >> upload it with your user list.

Now, click one of the following options: Fetch them directly Import from a pomade CSV Or, download the blank template >> upload it with your user list.

Step 7: Finally, press the “Start Migration” button.

Finally, press the "Start Migration" button.

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Author’s Final Words

“Is My Company Ready for Microsoft Copilot?” – a critical question that every organization needs to ask itself before buying a license today. Because Copilot is not about installing a simple add-on. It is a layer that sits on top of your Microsoft 365 environment.

In other words, if you have messy data or poor permissions, Copilot will surface your sensitive data. So, to make sure your organization is ready for Copilot, apply the four straightforward steps given in this Microsoft 365 Copilot Optimization Assessment Checklist.

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FAQs (Frequently Asked Questions)

Q.1 How to get ready for Copilot?
To get ready for Copilot, follow the steps given below:

  • Check Technical & Licensing Prerequisites
  • Review Security & Permissions
  • Filter Out “Dark Data” (Wipe Out Old Files & Policies)
  • Pilot Planning and Defining Success Metrics

Q.2 Can anyone see sensitive files in Copilot?
Yes, if an employee has the required permission to access the files. With a simple prompt, Copilot will read and display it to the respective users. To prevent this, declutter messy data and review security and permissions.

Q.3 Can I block Copilot from reading certain documents?
Absolutely Yes! You can use Microsoft Pureview Sensitivity Labels to protect confidential data from Copilot. It will make sure that particular data is kept hidden from the Copilot’s sight.

Q.4 How to make sure that the Copilot gives the right answers?
Wiping out old/outdated data and archiving redundant data can prompt Copilot to get right answers with sheer accuracy. You can use SharePoint Advanced Management (SAM) or the native built-in storage metric. It will help you in finding out Teams and SharePoint sites with zero activity in the last 12-18 months.

Q.5 How do I stop Copilot from seeing private files like HR records or salaries?

Here are the best practices to stop Copilot from seeing private files:

  • Create a detailed permission state report using the SharePoint Admin Center.
  • Delete “Everyone Except External Users” (EEEU) groups. And, replace it with controlled Microsoft 365 Groups.
  • Set up a mandatory expiration policy for all “Anyone with the link” URLs using Microsoft 365 Admin Center. Simply go to Org settings >> SharePoint.
    Also, disable anonymous sharing completely for highly sensitive sites.
  • Use Microsoft Pureview Sensitivity Labels.