If you use Microsoft 365 every day, you will have noticed Copilot has not stood still. It has been quietly working its way deeper into Word, Excel, Outlook and Teams. Microsoft ships these changes in waves, and the latest one, Wave 3, feels different from what came before.
Hi, I am Andy from Initial IT in Lichfield. We help businesses across Staffordshire and the West Midlands get real value from Microsoft 365 and Copilot, so here is the plain-English version of what is changing and what, if anything, you should do about it.
Key takeaways
- Earlier Copilot versions helped with tasks: drafting, summarising, tidying. Wave 3 shifts Copilot towards taking on whole pieces of work inside your workflows.
- The headline feature is AI agents: small, task-focused assistants you can build inside Microsoft 365 to handle repetitive processes with rules you set.
- Work IQ is a new layer that feeds Copilot your business context, so answers draw on how your team actually works rather than generic knowledge.
- Copilot coworker, still in testing, points at where this goes next: assigning multi-step jobs to an agent and letting it run.
- More capability means more need for control. Agents need the same access discipline as a new starter: only the data they need, with visibility of what they do.
What is Copilot Wave 3, in plain English?
Waves are Microsoft’s way of grouping big Copilot updates rather than dripping them out one feature at a time. Waves 1 and 2 were mostly about helping you with tasks you were already doing: draft this email, summarise that document, build a first-cut presentation. Useful, but you steered every step.
Wave 3 changes the relationship. Copilot starts taking on responsibility inside workflows rather than just assisting alongside them. You can now make changes to documents, emails, spreadsheets and presentations directly from a chat conversation, without hopping between screens. And for the first time, you can build your own AI agents.
AI agents: what can they actually do for a small business?
An agent is a small, task-focused assistant that lives inside Microsoft 365. You give it a job and a set of rules, and it carries out that job without needing constant input. Think of the repetitive processes that eat admin time: keeping documents filed correctly, chasing a standard internal process along, producing the same weekly summary.
For a firm of ten to thirty people, that is where the real gain sits. Not a robot doing anyone’s job, but the dull, rule-based work handled consistently so people can do the parts that need judgement.
What are Work IQ and Copilot coworker?
Work IQ is Microsoft’s name for a layer that helps Copilot understand your business context: your data, your communication patterns, your internal content. In practice it should mean less generic output and more answers that sound like they were written by someone who works there. Microsoft is also widening the underlying AI models Copilot can draw on, which should make it more capable over time without you doing anything.
Copilot coworker is the one to watch. It is in testing now, and it takes agents a step further: instead of responding to single requests, it can carry out longer, multi-step pieces of work you assign to it. That is genuinely useful and genuinely worth being careful with, in equal measure.
How should a Lichfield business prepare?
Two things before anything else. First, data permissions. Copilot and its agents see whatever the signed-in user can see, so if your file permissions are messy, Wave 3 will surface that mess quickly. Tidy access first.
Second, governance. Microsoft is shipping tools to manage agents properly: what they are doing, who is using them, how they connect to your systems. Use them from day one. An agent with a clear job, limited access and someone accountable for it is an asset. An unmanaged one is a risk.
This is exactly the groundwork we do in our Copilot and AI rollouts for firms across Lichfield, Staffordshire and the West Midlands: licensing, data hygiene, sensible guardrails, then the training that turns the features into time actually saved.
Quick check: is your business ready to get real value from Copilot?
Our free 2-minute Copilot Readiness Quiz asks the same questions we ask every business before a rollout: data, licensing, habits and guardrails. Score yourself and see exactly where to start. No marketing list.
Take the 2-minute Copilot Readiness Quiz
If you are already using AI day to day, the quiz is a quick way to check the foundations are as solid as the output looks.
Frequently asked questions
Do we need new licences to get Wave 3 features?
Most Wave 3 capability lands within Microsoft 365 Copilot licensing, but agent features and usage can be priced differently, and Microsoft adjusts this regularly. Check what your current licence includes before assuming, or ask us to map it against what you actually use.
Are AI agents safe to let loose on our business data?
They are as safe as the access you give them. Agents inherit permissions, so the real question is whether your Microsoft 365 permissions are tidy. Give each agent the minimum access its job needs, keep visibility of what it does, and review it like you would a new starter.
What is Work IQ, and does it see everything?
Work IQ feeds Copilot your business context, drawing on your data, content and communication patterns, so responses fit how your team works. It operates within your Microsoft 365 tenant and its existing permissions. The better your access hygiene, the better and safer it works.
Where should a small business start with all this?
Do not start with the shiniest feature. Start with data permissions and a short list of repetitive processes that eat admin time. Pick one, build or configure an agent for it, measure the time saved, then expand. A deliberate rollout beats a big bang every time.
– Andy Price, Founder & MD, Initial IT · 01543 524 594 · hello@initialit.co.uk