What Microsoft's Work IQ Expansion Means for Business Terms and Decision Criteria

Imagine the following rule in a sales procedure:

“Do not propose a contract renewal to a customer with an unresolved critical support case.”

If you hand this procedure to an AI agent, which data — and which values in that data — will the agent use to decide what counts as “unresolved” and what counts as “critical”?

On September 25, 2026, Microsoft announced capabilities that let Work IQ draw on business data and business processes in Dynamics 365 and Power Platform. Work IQ itself was introduced at Microsoft Ignite in November 2025 as the intelligence layer behind Microsoft 365 Copilot and agents; this announcement extends it into business applications.

This article looks at that extension with a focus on how business terms and procedures are defined, and who is responsible for them.

What the announcement adds

According to Microsoft, the extension lets Copilot and agents reference data from business applications such as sales, service, and finance alongside activity in Microsoft 365. This article focuses on three mechanisms.

The first is the Dataverse semantic model. It organizes the meaning of data fields and the relationships between them in a form AI can interpret. Microsoft’s technical documentation says it is generated automatically from existing table relationships, views, forms, and column descriptions. A glossary supplements the model with definitions of business terms.

The second is business skills. A business skill describes the steps for completing a task as reusable instructions. Microsoft describes agents with access to a skill discovering and using it as needed through MCP (a protocol that lets AI connect to external information and capabilities). Microsoft states explicitly that business skills are not executable code but natural-language instructions that guide agent behavior.

The third is operations, such as data updates, that follow permissions and approval conditions. Microsoft describes a flow in which Copilot or an agent proposes a change, obtains the required approval, and updates the source record within the user’s permissions.

On timing, the newly announced business-application capabilities are scheduled to enter public preview on September 30, 2026, and to roll out through October. The Dynamics 365 ERP applications are scheduled to follow in late October.

Check that inferred definitions match your business criteria

Back to the opening question.

Work IQ does not guess the meaning of “critical” with nothing to go on. If there is already a view called “Critical cases,” with the relevant priority and status conditions configured, the semantic model may be able to infer the meaning from it. The glossary also contains system-defined entries, not only entries added by users, and Microsoft says those system-defined entries can be edited. In other words, a company does not need to redefine every term from scratch.

At MIF, we focus on checking that the system’s interpretation matches the decision criteria the company intends to apply.

When ambiguous internal rules are handed to AI, it can fill the gaps with its own inferences and act on them. Even if an inference is reasonable, that does not mean the company has decided to adopt that criterion.

For terms that shape how a case is handled, such as “critical,” we recommend checking three things:

• Which fields and conditions are being referenced
• Whether they match your own criteria
• Whether missing definitions have been added and inconsistencies corrected in the glossary

Alongside this, decide who approves each definition and who reviews it when the business changes.

The glossary will also hold terms that do not directly affect decisions, such as abbreviations and synonyms. Start by reviewing the terms that affect business decisions.

The glossary, skills, and approval controls do different jobs

Mechanism	Main role
Glossary	Explains business terms and how they map to data fields or values
Business skills	Capture the information to check and the steps to follow as reusable instructions
Permissions and approval controls	Govern which operations are allowed and when approval is required

The difference shows most clearly with approvals.

Writing “Obtain approval before offering a discount” in a skill tells the agent about a step in the procedure. To enforce this approval requirement, the system that records the discount or sends the offer to the customer must verify approval before proceeding.

We recommend a setup that does not rely on natural-language instructions alone to authorize important operations. In the skill, describe the situations that require approval and what should be checked. Then confirm that those conditions are reflected in the systems and approval workflows that actually carry out the operation.

Test business skills before sharing them

The advantage of business skills is that a procedure written once can be used by multiple agents. Reducing the situations in which each person or agent follows a slightly different procedure is a real benefit.

The flip side is that if a shared skill contains ambiguous instructions or errors, that can affect the multiple agents that use it. Microsoft’s authoring guidance also notes that vague instructions lead to inconsistent agent behavior, and recommends writing specific instructions and testing with real scenarios before sharing. The same guidance suggests including troubleshooting steps and checks to perform before moving to the next step.

When information needed for a decision is missing, the skill should tell the agent what to confirm and whom to ask before proceeding.

In the opening example: if a support case has no recorded status or the relevant contract cannot be identified, the agent should ask the designated person for clarification rather than conclude that there are no unresolved critical cases.

Decide who configures the system and who approves business rules

Microsoft describes three groups involved in governance. AI admins manage who can use AI and the organization’s AI policies. Power Platform admins govern which business environments participate and who has access. Makers and developers shape how specific business data is exposed within those admin boundaries.

These are product roles; they do not designate who approves a company’s business rules. For example, the person with permission to edit the glossary is not necessarily the person responsible for deciding what “critical case” means for the business.

So in addition to the product roles, we recommend making clear who approves business terms and decision conditions. One division of labor: business process owners confirm the meaning and scope, and the configuration team incorporates those definitions into the glossary, skills, and approval workflows. Depending on the size of the company, one person may hold both roles.

Distinguishing definitions that apply company-wide from conditions that vary by product, contract, or business line makes them easier to reflect in configuration.

Definitions and approval conditions to settle for contract renewals (an example)

Let’s use the pre-renewal checks Microsoft gave as an example in its announcement. The announcement lists four steps: “Check unresolved critical cases,” “Confirm a service improvement plan owner,” “Document customer commitment,” and “Obtain approval before offering a concession.”

What follows is one example of how MIF would organize this work. It does not describe required product settings. Use it as a starting point to fill in according to your own operations, regulations, and risk tolerance.

What to check	What to decide in advance	Where to document or implement it	Example approver of the definition or condition
Unresolved, critical support cases	Which cases relate to this contract, which statuses count, and what makes a case critical. If priority is used, which values qualify	Glossary, data fields, filter conditions, skill	Head of service
Owner of the improvement plan	Which record identifies the owner, and whom to ask if no owner is assigned	Customer and contract records, skill	Head of customer success
Customer’s renewal intent and conditions	Which record captures the customer’s renewal intent and conditions, and how to confirm whether those conditions have been agreed	Customer and contract records, skill	Sales and service leads
Concessions such as discounts	Which concessions are covered, what limits apply, who approves them, and when approval is required	Delegation-of-authority policy, skill, approval workflow	Business unit lead
Missing information needed for a decision	Whom to ask when a field is blank, data cannot be accessed, or records conflict	Skill, operating procedure	Process owner

Decide whether the priority field will be used to identify critical cases and, if so, which values qualify.

The last row is the key to the table. If the information needed for a decision cannot be confirmed, the agent should not conclude that there are no unresolved critical cases, but hand the matter to the designated person. Before offering a concession, the agent should confirm that the specific proposal has been approved.

What to check when preparing for adoption

The first is where to test. Microsoft states that the preview features are not intended for production use. In a test environment, try both representative cases and cases with missing information, and check whether the definitions, procedures, and approval conditions have gaps. Starting with low-impact work is sensible, but low impact does not mean it is fine to make production work depend on a preview.

The second is checking when changes take effect. According to Microsoft’s documentation, the semantic model is regenerated periodically and picks up configuration changes, and glossary changes take effect at the next regeneration rather than the moment they are saved. When business requirements change, review the existing views and term definitions. After updating them, confirm that the changes have been incorporated into the semantic model and test the agent’s responses and actions in the affected workflow.

The third is distinguishing interpretation from access. Changing which views inform the semantic model and restricting access to the underlying data are separate configuration tasks. When documenting a change, specify which type of setting was changed.

Summary

At MIF, we recommend clarifying the terms used in business decisions and the criteria behind those decisions. Start with existing policies and application settings, add missing definitions, and resolve any inconsistencies in the definitions the AI uses.

Use the glossary to define business terms. Use skills to specify what to check and how to proceed when there is not enough information to make a decision. Confirm that the systems performing the actions enforce the required approvals and permission limits.

Assign responsibility for approving definitions and procedures and reviewing them as the business changes. Then test one workflow using both typical scenarios and cases with missing information to check that the agent behaves as intended.

Sources and scope

This article is based on the following sources as reviewed on September 29, 2026: Microsoft Dynamics 365 Blog, “Work IQ: Business and workplace intelligence in the flow of work” (September 25, 2026); Microsoft 365 Blog, “Microsoft Ignite 2025: Copilot and agents built to power the Frontier Firm” (November 18, 2025); and the Microsoft Learn articles “Overview of Dataverse semantic model,” “Manage semantic model glossary entries,” “Business skills overview,” and “Create and use business skills.”

Availability dates, supported applications, and feature specifications may change. Check Microsoft’s current documentation before adopting these features.

Product capabilities and planned availability are based on Microsoft’s published materials. The recommendations on business definitions, procedures, and approval requirements, along with the worked example, are MIF’s own. MIF has not independently tested how the features operate or how effectively their controls work.