AI readiness and legal compliance: Practical strategies for MSPs in the age of Copilot

Since artificial intelligence (AI) first hit the mainstream, its capabilities have evolved significantly. AI adoption has become widespread; a McKinsey report found that 62% of organizations are experimenting with AI agents to boost productivity, increase efficiency, and enable creativity across multiple businesses.

This boost in AI adoption presents a significant opportunity for Managed Service Providers (MSPs) to position themselves as trusted experts guiding customers through the AI adoption process. With proper preparation, this can help them stand out from the competition and foster long-term relationships with their clients.

Why AI is crucial for MSPs

As AI becomes commonplace, customer expectations are growing. Almost three quarters of small-to-medium businesses (SMBs) are currently experimenting with AI, with 83% of high-growth SMBs in the adoption stage. Ninety-two per cent of MSPs say that their own business has expanded as a result of an increased interest in AI.

In today’s surging market, MSPs must be prepared with an AI-ready offering to maintain their market position. Failing to do so significantly limits potential revenue and the risk of losing clients to competitors that are ahead of the curve.

Legal challenges in the AI era

Many companies are overlooking the risks of shadow AI, the unauthorized use of AI tools or applications within an organization.

The spike in interest in AI among SMBs indicates that MSPs’ customers are likely beginning to use AI tools at work. The downside of this trend is that it raises concerns about the security of sensitive information that they neither own nor have the right to share.

An accidental confidentiality breach is often the result of human error. For example, users may be unaware of the risks of integrating personal AI tools into their work, or of the sensitive content they are dealing with.

Businesses must ensure that privacy and HR policies are airtight and well communicated across departments. Alongside this, the ever-changing landscape of AI regulation means legislation and guidance must be regularly reviewed to stay on track.

The benefits and challenges of Copilot

Designed specifically for business use, Copilot operates as an isolated instance of AI per business, enabling secure access to internal data with a reduced risk of data leaks compared to traditional OpenAI sources.

As part of the Microsoft 365 suite, Copilot ensures secure access to all data and environments, streamlining administrative tasks and saving businesses valuable time and resources.

Despite its advantages, Copilot comes with its own security challenges. Given that it draws upon an organization’s internal data to form answers, there is always a risk that sensitive data could end up in the wrong hands.

Such breaches leave data vulnerable to being maliciously exploited, potentially leading to devastating consequences. To mitigate risk, MSPs must ensure their customers’ Microsoft 365 tenants are secured in accordance with best practices before rollout. Microsoft data must be properly secured and strengthened access controls to prevent unauthorized users from accessing sensitive information.

Once deployed, education is paramount. MSPs should properly educate customers on how to integrate Copilot into existing processes to optimize efficiency effectively. For instance, customers should understand how Copilot integrates with the rest of their business data in Microsoft 365.

How to become AI-ready

MSPs must understand their customers’ business goals, analyse their data environment, and develop an intuitive deployment plan for Copilot ahead of selling AI services. MSPs that succeed with AI services won’t be those who rush to roll out subpar agentic enablement services. Assessing what drives business value and defining use cases is key.

Proactively reviewing customers’ data environments to ensure that their security posture is up to scratch is critical. They should have established content management practices and data governance and carry out a thorough audit of security policies, including data access controls, retention policies, and sensitivity labels.

These are managed and updated centrally and rolled out across their Microsoft 365 environment. If security gaps are uncovered, this is a good opportunity to upsell the benefits of a Microsoft 365 Business Premium license, which provides access to Entra ID for identity access management, Purview for data security, and Defender for ransomware and device protection.

Once it’s established that the tenant is secured, MSPs can help customers to identify champions for Copilot within their organization. A small group of employees can initially test Copilot, demonstrating its potential and driving wider adoption by becoming advocates. This approach enables the organization to make the most of its 365 licenses.

Today, MSPs must not only be prepared to leverage AI internally within their operations, but also ensure they are well-equipped to support and guide customers as Copilot becomes central to their technology stack.