Creating AI Agents with Microsoft Copilot

Issue/Question

I want to create my own AI Agent, which tool do I use?

Environment

• AI
• Copilot
• Agent
• Copilot Chat
• Copilot Agent Builder
• Copilot Studio
• Azure AI Foundy
• Microsoft Power Platform

Cause

Need to increase or automate business or personal processes to gain efficiency and capacity.

Resolution

1. Overview of Each Tool

1.1 Agent Builder (Microsoft 365 Copilot)

The easiest way to build your own declarative agents is to use the Agent Builder feature in Microsoft 365 Copilot. It offers an immediate, interactive AI development experience that's perfect for quick and straightforward projects.

Key Characteristics:

• You can specify dedicated knowledge sources, including content on SharePoint and information provided by Microsoft 365 Copilot connectors. You can also test the agent before deploying it for use in your conversations with Microsoft 365 Copilot or sharing it with others in your organization.

Access Points:

• You can build agents from the following apps and sites: microsoft365.com/chat, office.com/chat, Microsoft Teams Desktop and web client.

Use Cases:

• An agent that provides writing or presentation coaching tailored to organizational standards. A team onboarding agent that responds with specific information about the user's new team and helps them complete onboarding tasks.

1.2 Copilot Studio (Full Platform)

Copilot Studio is a platform for building and managing agents. Connect them to your business data, create your own with natural language, and publish them across the channels your teams and customers use.

Key Capabilities:

• Build conversational capabilities - Design agents that respond to natural language prompts with a conversational flow—answering questions, guiding workflows, or completing tasks using your business data.
• Add autonomous capabilities - Build agents that manage tasks or business processes autonomously—planning, learning, and escalating work items when needed.
• Use pre-built agents and templates - Get ready-to-use agents from the Agent Store or start with a template and customize it based on your business needs.
• Design agents with voice - Create voice or phone-based agents powered by generative AI to help users and customers more quickly.

Integration Options:

• Build agents that can complete actions on your behalf through a variety of tools such as flows, prompts, and APIs that connect to your business systems. Use multi-agent orchestration for complex processes, routing tasks to the right agent when specialized knowledge or actions are required.

Deployment Channels:

• Deploy your agents directly in the Microsoft 365 apps your employees use every day—such as Microsoft Teams, SharePoint, and Microsoft 365 Copilot. Publish agents in the tools or channels your customers already use, from web apps to messaging platforms.

1.3 Microsoft 365 Copilot Chat

Microsoft 365 Copilot Chat offers secure, AI chat that adds pay-as-you-go agents. Copilot Chat includes: Secure, AI chat grounded in the web and powered by the latest models. A side-by-side experience that's aware of a user's open content in select Microsoft 365 apps like Word, Excel, PowerPoint, OneNote, and Outlook.

Key Features:

• Pay-as-you-go agents accessible from chat, priced on a metered basis. IT controls, enterprise data protection, and agent management. Features like Copilot Pages, file upload, and image generation.

Data Access (Key Differentiator):

• Copilot uses Microsoft Graph to access user data that's in the user's unique context. This user data includes emails, chats, and documents that the user has permission to access.
• Copilot only accesses data that an individual user is authorized to access, based on, for example, existing Microsoft 365 role-based access controls. Copilot doesn't access data that the user doesn't have permission to access.

2. Feature Comparison Matrix

2.1 Core Capabilities

2.2 Target Users and Complexity

Copilot Studio Agent Builder serves as an entry point for business users and knowledge workers without programming expertise. Implemented directly within the M365 Copilot interface, it functions as a simplified agent creation tool with a conversational interface.

By comparison, Microsoft Copilot Studio targets technical practitioners, solution architects, and IT professionals tasked with developing comprehensive agent solutions. While classified as a low-code platform (with optional pro-code capabilities), it requires technical proficiency beyond what's needed for Agent Builder.

2.3 Deployment and Sharing

2.4 Knowledge Source Limits

2.5 Licensing and Cost

Microsoft 365 Copilot includes agent-building capabilities for use within your organization. To publish or share agents to outside channels, choose a standalone Copilot Studio plan.

Microsoft 365 Copilot $29.00 user/month, paid yearly. Includes Copilot Studio access for all licenses—great for empowering employees to build and use agents internally. Create internal agents that work within Microsoft 365. Access Copilot Studio at no extra cost—available to all licensed Microsoft 365 Copilot users. Build and access agents for internal workflows as often as you need without usage limits.

3. When to Use Each Tool

3.1 Use Agent Builder When:

3.2 Use Copilot Studio When:

Instead of having one generic AI helper—it's about building dozens of specialized agents that understand your company's unique way of operating. A customer service agent knows your products, policies, and support procedures. An HR agent understands your benefits, policies, and organizational structure. A supply chain agent knows your inventory systems, supplier relationships, and logistics networks.

3.3 Use Microsoft 365 Copilot Chat When:

The work graph can include signals from: Emails, meetings, and calendar invites in Outlook. Files in OneDrive and SharePoint. Chats, channels, and meetings in Teams. People, roles, and relationships across your business.

4. Architectural Differences

4.1 Data Access Model

┌─────────────────────────────────────────────────────────────────────────────┐
│                        DATA ACCESS ARCHITECTURE                              │
├─────────────────────────────────────────────────────────────────────────────┤
│                                                                              │
│  AGENT BUILDER / COPILOT STUDIO                                              │
│  ┌─────────────┐    ┌─────────────────┐    ┌─────────────────┐              │
│  │   Maker     │───▶│ Pre-configured  │───▶│  Agent serves   │              │
│  │ configures  │    │ knowledge       │    │  users with     │              │
│  │ sources     │    │ sources         │    │  filtered       │              │
│  └─────────────┘    │ (static)        │    │  results        │              │
│                     └─────────────────┘    └─────────────────┘              │
│                                                                              │
│  • Sources defined at design time                                            │
│  • Limited to configured SharePoint sites, files, websites                   │
│  • User permissions filter results, but don't expand scope                   │
│                                                                              │
├─────────────────────────────────────────────────────────────────────────────┤
│                                                                              │
│  MICROSOFT 365 COPILOT CHAT                                                  │
│  ┌─────────────┐    ┌─────────────────┐    ┌─────────────────┐              │
│  │   User      │───▶│ Microsoft Graph │───▶│  Dynamic access │              │
│  │ asks        │    │ (live query)    │    │  to ALL user's  │              │
│  │ question    │    │                 │    │  permitted data │              │
│  └─────────────┘    └─────────────────┘    └─────────────────┘              │
│                                                                              │
│  • No pre-configuration needed                                               │
│  • Access to emails, files, chats, calendar, Teams - dynamically             │
│  • Scope expands/contracts based on user's actual permissions                │
│                                                                              │
└─────────────────────────────────────────────────────────────────────────────┘

4.2 Agent Complexity Spectrum

Simple ◄─────────────────────────────────────────────────────────► Complex

 Agent Builder          Copilot Studio              Copilot Studio
 (Lite)                 (Standard)                  (Advanced)
     │                       │                           │
     ▼                       ▼                           ▼
┌──────────┐           ┌──────────┐               ┌──────────┐
│ Q&A Bot  │           │ Workflow │               │ Multi-   │
│ with     │           │ Agent    │               │ Agent    │
│ docs     │           │ with     │               │ System   │
│          │           │ actions  │               │ with     │
│          │           │          │               │ APIs     │
└──────────┘           └──────────┘               └──────────┘

Minutes to build       Hours to build            Days/weeks to build
No code                Low-code                  Low-code + pro-code
Internal only          Internal + external       Enterprise-wide

5. Decision Framework

5.1 Decision Tree

START: What do you need?
    │
    ├─► "I need to ask questions about MY files, emails, calendar"
    │       └─► Use Microsoft 365 Copilot Chat ✓
    │
    ├─► "I need a simple Q&A bot for my team"
    │       │
    │       ├─► "I have 15 minutes and no coding skills"
    │       │       └─► Use Agent Builder ✓
    │       │
    │       └─► "I need more control over the experience"
    │               └─► Use Copilot Studio ✓
    │
    ├─► "I need to automate workflows with approvals, notifications"
    │       └─► Use Copilot Studio ✓
    │
    ├─► "I need to serve external customers"
    │       └─► Use Copilot Studio (standalone plan) ✓
    │
    ├─► "I need the agent to connect to Salesforce, SAP, custom APIs"
    │       └─► Use Copilot Studio ✓
    │
    └─► "I need voice/phone support"
            └─► Use Copilot Studio ✓

5.2 Quick Reference Table

6. Migration Path

If you need more advanced capabilities like Actions to integrate external services, we recommend that you use Microsoft Copilot Studio, which provides a comprehensive set of tools and features for more complex requirements.

From Agent Builder to Copilot Studio:

Organizations can start with Agent Builder for quick wins and migrate to Copilot Studio as needs grow:

7. Summary Comparison Matrix

8. Recommendations

For University of South Dakota:

Based on your use case (allowing users to analyze their own cybersecurity documents against CIS Controls):

Recommendation: For the most seamless user experience where users can reference any document they have access to, Microsoft 365 Copilot Chat is the appropriate tool. For a specialized agent with expertise that requires users to upload documents, Copilot Studio with file upload enabled (which you've already configured) is the best approach.