Using Copilot AI on your company’s internal data is a real game-changer: you can build custom AI assistants that know all about your organisation’s policies and procedures. These assistants can give employees data and answers quickly, saving them tons of time digging through documents or waiting for HR and IT to answer their Teams messages. 

Plus, you can plug Copilot AI right into your current systems, so everyone can get the info they need without switching between a bunch of different tools. 

But you might have trouble deciding between Copilot and Copilot Studio. While they share a name, these tools serve distinctly different purposes and could benefit your organisation in unique ways. 

In this post, we’ll break down the key differences between these AI solutions and guide you through a practical example of creating custom AI assistants for your business.  

If you’d prefer to watch Matt’s video demonstration, feel free to check it out below—otherwise, read on for everything you need to know. 

The key differences: Copilot 365 vs Copilot Studio

Copilot is Microsoft’s AI chatbot technology, which comes in two business-related flavours.  

(Firstly, let’s ignore Copilot for Individuals: a general-purpose AI chatbot that individuals can use for free on their own Windows PCs or through a web browser. We wouldn’t recommend anyone use this in a business context for security reasons.) 

The two Copilot for business apps are designed to be used on your work data. This means you can use them on internal organisational data that is part of your Microsoft 365 ecosystem — and you can do some pretty magical stuff with it. 

If you want to figure out which one to use, take a look at the differences below. 

Purpose and functionality of each Copilot tool 

Microsoft 365 Copilot is built directly into Microsoft 365 applications and focuses on enhancing individual productivity. It’s designed to be used straight out of the box, helping users generate content, summarise documents, and automate everyday tasks within familiar applications like Word, Excel, and Outlook. Because this is the standard version, it’s often referred to as simply ‘Copilot’.  

Copilot Studio, on the other hand, allows you to build custom AI assistants with much deeper automation capabilities. These custom bots can function more like AI agents, performing actions based on predefined rules or workflows rather than simply responding to queries. With proper configuration, they can integrate with your specific business processes and data sources. 

Security in Copilot  

Security is a big factor when rolling out any AI tool. With Copilot, the AI works within the user’s existing permissions. This keeps things simple, but it does mean that if access management isn’t carefully implemented, sensitive information like payroll records could potentially surface in responses to queries. 

Copilot Studio offers more granular control. You can limit the AI’s queries to specific data sets, whether they’re SharePoint libraries, databases, or even external websites. This makes sure that users only access approved information — crucial for handling confidential data and maintaining compliance. 

Copilot Pricing models 

The pricing structures for these tools differ significantly: 

• Copilot is licensed per user, meaning costs scale directly with the number of employees using the tool. 

• Copilot Studio is priced per query, making it potentially more cost-effective for organisations that need centralised AI assistance rather than individual licenses for every user. At around £200 per month, you get 25,000 queries, which can be distributed across your organisation. 

How to build a custom AI assistant in Copilot Studio 

When making your own bot, you’ll start on this screen, on copilotstudio.microsoft.com.  

As you can see, there are templates you can pick from if you want a pre-built agent. But that’s not as fun as building your own.  

So, head to the natural language text box and describe what you want from your agentic Copilot. Be as specific as you can here, so it can’t misinterpret your instructions. 

Here’s how the agent creation process will go:  

1. You’ll want to explain the specific business scenario or workflow you want the agent to assist with (e.g., helping with customer service, managing HR tasks, or automating data processing).  
2. You’ll also outline the agent’s role by specifying the tasks it should handle, such as answering queries or performing actions. 
3. Then, it’ll ask you to integrate the data sources you’ll be using (SharePoint libraries, databases, third-party tools via APIs, and so on). You also have the chance to add specific skills (functionality modules) and external services to connect to if you like.  
4. After that, you get to configure permissions and security. You’ll define the agent’s access controls and make sure your policy compliance is water-tight. 
5. Now it’s set up, it’s time to test your agent. You can try it out in a safe sandbox environment to check it performs well. Validate its ability to interpret user queries, handle tasks, and interact with your integrated data sources. 

After those steps, you’re ready to deploy. You can roll it out through the whole organisation, or only within specific departments or teams.  

See how people use it and like it, take their feedback, and make changes over time.  

Meet Marvin: A practical Copilot Studio example 

Now, when you enter Copilot Studio, you’ll see a dashboard where you can manage your AI agents.  

To demonstrate the power of Copilot Studio, we’ve created a custom AI assistant named Marvin — a friendly, dog-themed chatbot with specific knowledge and capabilities. 

Clicking into our example reveals its configuration options. 

In the overview section, we’ve defined Marvin’s character—a comical, friendly, dog-themed AI assistant. This section builds the bot’s personality, establishing how it will interact with users and answer questions. 

The task instructions define specific behaviours, such as “Marvin must sign off with paw prints only 25% of the time.” These instructions allow you to create a consistent experience that aligns with your brand and communication style. 

This is also where we define important limitations, like “only provide safe-for-work and legal responses” to prevent data breaches or inappropriate content. 

Controlling knowledge sources with Copilot Studio

One of Copilot Studio’s most important features is the ability to limit where your AI assistant can find information. 

In our example, Marvin can only access three specific SharePoint sites: Internal Policies, Archive Cases, and Active Cases. When we look at the Internal Policies site, we can see standard company documents like IT policies and acceptable use guidelines. 

This restriction means Marvin cannot access the broader internet or any other data sources — he’s limited to exactly what we’ve permitted, ensuring complete control over the information being shared. 

Real-world applications for Copilot Studio

Legal case management 

In our demonstration, we showed how Marvin could assist in a legal practice setting. When asked “What’s the latest on the Smith and Jones case?”, Marvin quickly analyses the permitted documents and provides a concise summary, which would save a big chunk of time compared to manually reviewing files. 

As you can see here, we’ve asked Marvin through his Teams interface, and he’s responded with a ‘1’ at the end. You can click on these citations to see where the answer data is coming from — in this case, a .docx file we’ve given permission to read.  

Marvin can also draft client communications based on the latest case information; great for allowing legal professionals to focus on more complex tasks whilst making sure clients stay informed. 

Security in action 

To demonstrate the security features, we asked Marvin for information outside his permitted knowledge base: “Can you tell me the weather for this week?” 

As expected, Marvin responded that he doesn’t have real-time access to weather data, offering suggestions for where to find this information instead but not attempting to retrieve it himself. This confirms that the chatbot remains secure and only accesses the data sources we’ve explicitly permitted (in this situation, just those Word documents we’ve given him access to).  

HR policy assistance 

Perhaps one of the most practical applications is helping staff navigate internal policies. 

When asked about travel policies for a business trip to New York, Marvin instantly provides information about hotel standards, business class eligibility, and expense claim deadlines — all pulled directly from company policy documents stored in SharePoint: 

This type of instant access to policy information can really reduce the workload on HR teams who are frequently asked similar questions. Instead of exchanging multiple emails to resolve a simple query, employees get immediate answers, and HR can focus on more complex issues. 

The business benefits of Copilot Studio 

Hopefully by now you’ve been convinced to build a Marvin of your own (or a Molly, a Matteo, a Mika, etc.)  

Setting up a custom AI assistant like this will bring your business several advantages: 

1. Time savings on routine queries: Staff can get immediate answers to common questions about policies, procedures, and internal information.  
2. Controlled access to information: Unlike Copilot, which operates within a user’s full permissions, Copilot Studio lets you precisely control what data your AI can access and share.
3. Scalable communication: One bot can handle thousands of queries per month across your organisation.
4. Future applications: You can always expand your bot’s capabilities to help with more tasks, or give it new data sources, or roll it out to different departments.  

The great thing is that you can start small. Test it on some simple data retrieval tasks first, then later on, introduce more complexity. Why not give it a go?  

Which Microsoft AI tool is right for your business? 

So out of the two, which one should you choose? Here’s our recommendation: 

• Choose Microsoft Copilot if individual productivity is your primary goal. It’s ideal for knowledge workers who need AI assistance with drafting, summarising, and organising their daily work in Microsoft 365.

• Choose Copilot Studio if you need tailored, business-wide automation with strict control over data access. It’s perfect for creating centralised knowledge bases, automating routine customer or employee queries, and building custom workflows. 

Many organisations may benefit from implementing both tools strategically—Copilot for certain departments or roles, and Copilot Studio for company-wide processes and information management. 

Getting started with AI at your organisation 

At Synextra, we’re helping businesses across the UK implement AI tools effectively, helping them deliver real value whilst keeping security and compliance in check. 

Whether you’re just beginning to explore AI or looking to expand your existing capabilities, our cloud computing experts can guide you through selecting the right tools, configuring them for your needs, and training your team to maximise their benefits. 

Ready to discover how Microsoft Copilot and Copilot Studio could transform your business? Get in touch with our team today to find out more.