What Are Microsoft Copilot Agents and What Can They Do to Improve Your Business?

Microsoft Copilot agents can dramatically improve your employee and customer experience. With their ability to understand natural language, connect to enterprise data sources, and operate across multiple communication channels, Copilot agents are a powerful — and easy-to-build — improvement over previous generations of chatbots.

In brief:

• Microsoft Copilot agents (formerly Power Virtual Agents) use artificial intelligence (AI) to understand natural language, connect to enterprise data, and operate across multiple communication channels.
• Organizations that have implemented Copilot agents have seen up to 291 percent return on investment while reducing customer support staff time for routine requests by approximately 50 percent.
• These AI agents integrate natively with Microsoft Dynamics CE applications and Azure AI services.
• Microsoft Copilot Studio allows you to create and deploy these agents with minimal coding through a user-friendly interface.

Microsoft Copilot agents offer many benefits for businesses that want to lower costs, increase customer and employee satisfaction, and streamline operations.

In this blog post, we’ll explore what Copilot agents are, how to use them in your organization, and the many benefits they offer. We’ll also walk through how to build your own virtual agent step-by-step.

First, let’s explore how these powerful tools have evolved rapidly in the past few years.

From Microsoft Power Virtual Agents to Microsoft Copilot Agents: A (Brief) History of Microsoft’s Virtual Agent Evolution

When Microsoft released its Microsoft Power Virtual Agents in 2019, the company revolutionized the creation of chatbots, those virtual assistants that allow you to get answers to your questions on companies’ websites by interacting with your computer.

Power Virtual Agents made it much easier to create chatbots without a lot of coding. Microsoft’s simple user interface gave developers a low-code way to add questions, responses, conditions, and actions to their chatbots and quickly publish them to websites.

Then, generative artificial intelligence (AI) introduced a new world of possibilities for those chatbots. With generative AI, chatbots were no longer limited to preprogrammed menus or rules. Their ability to understand natural language and human voices increased exponentially. AI also allowed chatbots to integrate with machine learning (ML) or build on the previous menu-based tools.

In late 2023, Microsoft further enhanced AI-powered chatbots, or AI agents, by absorbing Power Virtual Agents into Microsoft Copilot Studio. A more comprehensive platform, Copilot Studio offers the expanded capabilities of fully autonomous AI agents while maintaining Power Agents’ core functionalities. However, for the sake of clarity, Microsoft now includes both technologies under the term “Copilot agents.”

But regardless of the name, Copilot agents are a powerful tool that you can put to work. Let’s take a closer look at how you can integrate Copilot agents into your processes and workflows.

How to Use Copilot Agents in Your Organization

You can use Copilot agents to:

Understand User Intent

In Microsoft Copilot Studio, users can create topics and assign trigger phrases to them. For example, if the topic is “Order Status,” a trigger phrase might be “I want to check on my order.”

Using natural language understanding, a Copilot agent that receives the trigger phrase — or even a variant of the trigger phrase — can then match the phrase’s intent to the topic and send it down the appropriate conversation path. If the customer’s phrase is unclear, Copilot Studio uses disambiguation tools to clarify the user’s intent.

Communicate on Multiple Channels

Copilot agents can serve customers through phone, chat, text, and email and manage multiple conversations simultaneously. These agents make it easier for customers to conveniently engage with your brand, get what they need sooner, and create an intensive, branded omnichannel experience for them.

Among the channel venues that Microsoft Copilot Studio enables are Microsoft Teams, Microsoft 365 applications, Facebook Messenger, WhatsApp, custom websites, and a wide variety of mobile apps.

Respond Quickly, Consistently and Compliantly

Copilot agents are built on role-based permissions and rule sets to ensure communications with customers are always consistent and on brand and adhere to regulations and compliances.

For example, Copilot Studio’s security model can have predefined roles like “Environment Maker” or “Bot Contributor” to control agent creation or coauthoring. Copilot also regularly rotates security certificates and follows Microsoft’s security development policies.

Reduce Employees’ Workloads and Stress

Workers are often asked to assume more tasks to meet changing business needs, which can result in burnout and bad performance.

However, since Copilot agents can handle so many tasks that otherwise might weigh down people, they reduce workloads, helping employees be more energetic and relaxed and able to produce at their maximum potential. Agents also enhance in-house talent in all areas, which can lead to lower outsourcing costs.

Now that we’ve reviewed how you can put these Copilot virtual agents to work, let’s explore some of the benefits of Microsoft agents.

The Many Advantages of Microsoft Agents

As part of Microsoft’s Power Platform and AI ecosystem, Copilot Studio natively integrates with Microsoft Dynamics CE applications and can use Azure AI services for enhanced capabilities. This gives your Copilot agents comprehensive information and intelligence at their disposal.

For example, your Copilot agents could have real-time access to purchase order history, customer service knowledge articles, or inventory updates. Access to all that data also powers other benefits, such as:

1. 24/7 Availability

Customers expect responses to their inquiries in as little as one hour. Copilot agents can manage such inquiries around the clock by immediately assisting customers without human help.

As tremendous as that is, agents can perform a wide array of support tasks. So while Copilot Studio’s current pricing is based on user sessions, businesses can reduce labor costs — and free employees up for more valuable work — by turning even more routine tasks over to Copilot agents.

2. Multiple Industry Applications

While Copilot agents clearly have uses on consumer-facing websites, they have uses in other scenarios and industries, too:

• In ecommerce, companies use them for order processing tasks, such as tracking, status updates, and customer support. For example, online stores can use Copilot agents’ Conversation Booster feature to connect a company’s product catalog. This allows agents to provide more nuanced responses about product pricing, availability, or features.
• In healthcare, Copilot agents streamline scheduling and confirming appointments, collecting feedback, managing prescriptions, triaging, and helping with patient education.
• In finance, virtual agents assist with account inquiries, transaction processing, and financial advice.
• In call center operations, virtual agents reduce wait times by handling common tasks and interactions so human agents can concentrate on difficult issues that require personal attention.

Ultimately, the proof of virtual agents’ effectiveness is the bottom line itself.

A 2023 Microsoft-commissioned Forrester study found that Microsoft agents resulted in an overall return on investment (ROI) of up to 291 percent (up from 261 percent in previous studies) while reducing customer support staff time for handling routine requests by approximately 50 percent.

3. More Self-Service Options

Copilot agents can provide self-service options by guiding customers to the experience of their choice.

For example, if a customer prefers voice chat to text, an agent can ask them if they would rather use their landline instead of a smartphone and facilitate that transfer for the same level of highly personalized service. Similarly, these AI agents can search a customer’s chat history to automatically switch a chat to their primary language.

4. Increased Sales

Copilot agents help close sales because they can follow up with customers who have abandoned their carts, provide upsell and cross-sell opportunities, and collect customer information up-front to qualify leads.

In addition, agents can set up appointments, use personalized conversations that increase conversion rates, boost lead generation by automating early-stage interactions, and automate routine customer interactions. In this way, virtual agents let sales teams concentrate on challenging sales opportunities.

In short, using Copilot agents is like cloning your salespeople. They can engage in multiple conversations simultaneously, letting your business reach more customers at scale.

Now that you understand how to use Microsoft Copilot agents and their advantages, let’s walk through how you can create one with Microsoft Copilot Studio.

How to Create Your Copilot Virtual Agent in Copilot Studio

Here’s how to use Microsoft Copilot Studio to establish a virtual agent in your business.

1. Sign in to the Microsoft Copilot Studio portal at copilot.microsoft.com. Note: You need a license to create and manage agents in Copilot Studio. However, individual users can sign up for a free trial to explore the functionality and quickly get started. A license is unnecessary to use or interact with the bot as long as users can access the publishing location.
2. Give your agent a name and select Create.
3. Start using your agent right away with available templates or create your own topics. Topics serve as a guide on how your agent should respond to requests from users. Other key concepts include:

• • • Variables, stored customer responses the agent can use to provide relevant responses
    • Entities, which use natural language processing to categorize user input
    • The authoring canvas, which provides guided steps for building conversation flows

4. Set up actions. Actions can be either a simple response to a question from the user or result in a call to Power Automate flows.
5. Test your agent using the built-in testing tools. Throughout the build process, you can test your bot in the left-hand conversation box and use analytics to refine performance.
6. Publish to your desired channels. Once you’re satisfied, publish your Copilot agent and share it to your desired location, including websites, Teams, and other messaging platforms.

Tip: A starting point can be a simple dialogue tree that can evolve into a sophisticated AI agent. Copilot Studio now offers enhanced prompt engineering capabilities and generative AI features that can significantly improve your agent’s conversational abilities. To read about advanced AI capabilities for Copilot Studio, check out the Microsoft documentation.

Move Forward Today With Microsoft Copilot Studio

Microsoft Copilot agents represent a significant advancement in business automation, bridging the gap between traditional virtual agents and fully autonomous AI agent assistants.

With its user-friendly implementation and minimal coding requirements, Microsoft Copilot Studio empowers businesses to deploy agents rapidly that understand natural language, connect to enterprise data sources, and operate across multiple communication channels.

Whether they support e-commerce operations, healthcare services, financial institutions, or internal help desks, Copilot agents adapt to industry-specific needs while maintaining consistent brand messaging and regulatory compliance. Embrace this technology now to position your organization at the forefront of digital transformation.