What a business skill is
Through Business Applications in Work IQ, Copilot and connected agents can discover and use the active business skills they have access to. The skills are plain-language descriptions of how your organization does a type of work: the steps, the information needed, and the business rules that apply. When multiple agents use the same skill, they follow the same process.
The most important caveat is in the documentation itself: business skills are not executable code. A skill is closer to a process document written for a new hire than to a workflow engine. Microsoft's guidance says that if you build your own agent, you must add any other tools it needs, such as MCP servers and connectors, to actually carry out the processes. A skill can tell an agent what to do, but the agent still needs the tools and permissions to do it.
How a skill is structured
Skills use three layers, per the Learn overview:
- Frontmatter: a name, a description and optional key-value metadata. Agents scan this first to find relevant skills.
- Instructions: the full process definition.
- Resources: attached reference files such as policies, templates and other supporting documents.
Agents query the metadata, then pull the full instructions and resources only when needed.
A concrete example from Microsoft
Microsoft's Dynamics 365 blog describes a sales lead preparing for a customer renewal. The company's "renewal readiness" skill includes steps such as checking unresolved critical cases and getting approval before offering a concession. The lead asks Copilot to use that process to recommend next steps, and the skill is invoked. Microsoft says that skills are an inherent part of Work IQ across Copilot experiences, and that teams can reuse one skill across agents connected to Work IQ MCP, including agents in Copilot Studio.
This is Microsoft's illustration, not an independent test. It does show the intended pattern: one process definition replaces many copies of the same instructions pasted into individual agents.
Creating and activating a skill
According to Microsoft Learn, the process runs through the Business skills page in the Power Apps maker experience. The prerequisites are:
- A Dataverse environment where a Power Platform administrator has turned on Work IQ.
- Permission to create or use skills in that environment.
- Access to a supported Copilot experience or connected agent.
- A configured Dataverse MCP server, but only if you connect directly through Dataverse MCP. This configuration isn't required for Work IQ MCP connections.
To create a skill, follow these steps:
- On the Business skills page, select Start from scratch to open the editor.
- Optionally describe the process to Skill Builder, an agent that proposes a name, description, instructions and resources from a description or a supplied document. You can also write the content yourself.
- Review the name, then explain in Description what the skill is for and when agents should use it.
- Write or review the step-by-step instructions in Markdown. Check that they reflect your business rules and use the correct Dataverse tables and columns.
- Optionally add key-value metadata, such as the organization the skill applies to.
- Optionally attach reference files under Resources. The documented limit is 20 MB.
- Select Save to keep working, or Save and activate when the skill is ready for agents.
If you already have a Skill.md or .zip file, you can upload it instead. The documented upload limit is 30 MB. The uploaded skill is saved in your environment, where you can review and edit it before use.
Save versus activate
This distinction matters for change control:
- Save keeps your working copy and leaves the live version untouched. A new skill stays inactive.
- Save and activate makes your changes the active version, including its resources. The previous active version stays in version history.
- A skill has only one active version.
- Repeated saves update the same working copy rather than creating a new history entry each time.
- Restoring an earlier version creates a new active version. It does not overwrite the old one. You need edit access to restore.
Limits to know about
- In Copilot Studio agents, only text-based resource files are supported, and the agent reads only the first 20 KB of a text resource.
- A large policy PDF attached as a resource will therefore not necessarily behave as you expect in every agent. Test with the actual agent.
Sharing and security
Skills are stored in Dataverse and follow Dataverse security patterns. The same permissions apply whether you use a skill in Copilot, a Work IQ-connected agent, or an agent connected directly to the Dataverse MCP server. Each skill has an owner, and owners can share it in three ways:
- General access: everyone in the environment, view-only.
- Security role access: selected Dataverse roles, with view or edit permission.
- Direct access: specific users or groups, with view or edit permission.
The common failure point is that role-based sharing needs two roles. A user needs the role the skill is shared with and also the Skill Sharing Role. Microsoft's example is a skill shared with the Customer Service Representative role. Only users who hold both that role and the Skill Sharing Role can access it. If a user can't see a skill that was shared by role, check this first.
Documented built-in role capabilities:
| Role | What it can do |
|---|---|
| Basic User | Create skills it owns and use skills it can access |
| Environment Maker | Create and share owned skills, and manage solution deployment |
| System Administrator or System Customizer | Create and share skills, and manage solution deployment |
Testing a skill
Microsoft's suggested procedure for using skills is:
- Open Copilot Chat, Copilot Cowork or your connected agent.
- Ask it to find the business skills you can access, naming the environment that holds them.
- Run a scenario that matches the skill's intended use. Microsoft's example is supplying a sample call transcript and asking the agent to log it into Dataverse.
- Confirm that the intended actions actually succeeded, then refine the instructions.
If the agent doesn't pick up skills automatically, Microsoft says to ask explicitly. When building an agent, you can add an instruction telling it to look for relevant business skills in the specified environment, retrieve their instructions and follow the process they describe.
Deployment between environments
Skills are solution-aware, so they can be packaged for application lifecycle management. Managed and unmanaged solution exports include only the active version of each skill, with its metadata and associated resources. Saved-but-inactive changes and version history do not travel with the export. In practice, activate the exact version you intend to ship before adding the skill to a solution. Microsoft also points to a sample business skills repository on GitHub, with a downloadable solution that can serve as templates.
Admin controls and rollout
Business skills sit inside the wider Business Applications in Work IQ configuration, which has three layers:
- Tenant level: a Microsoft 365 admin center setting governs bidirectional sharing between Microsoft 365 Copilot Chat and Dataverse.
- Environment level: a Work IQ switch in the Power Platform admin center (Settings > Product > Features) turns on business skills, semantic modeling and Dataverse access in Copilot Chat, Research and Agent Builder.
- App level: makers decide which model-driven apps expose their data.
The default-settings documentation says Microsoft began turning these capabilities on by default for new eligible environments on September 30, 2026. Starting in November 2026, it turns on Business Applications in Work IQ for existing environments that aren't listed as exceptions. The exceptions are:
- EU and EFTA environments (customers can enable Work IQ there manually during preview)
- Government-related environments
- Nonproduction environments (trial, sandbox and developer)
The documentation also says Business Applications in Work IQ isn't currently available in sovereign or government clouds, including DoD, GCC and GCC High.
Third-party summaries of Message center item MC1483492 say the default-on applies to eligible environments with Copilot Premium and either Power Apps Premium or Dynamics 365 products active. Check your own message center entry for the exact scope that applies to your tenant.
Compliance cautions
Microsoft's documentation is blunt about regulated workloads:
- Compliance attestations for a source service, such as PCI DSS or HITRUST, don't automatically extend to Copilot experiences that retrieve or present Dataverse data.
- For FERPA, educational institutions should evaluate the integrations with their compliance teams before using Work IQ for production or regulated workloads.
- For US tenants using FedRAMP-accredited environments, enabling Work IQ might send data outside the FedRAMP authorization boundary. That data might be processed, stored, backed up or accessed for support in non-US regions.
Review these points before the November default-on reaches existing environments.
Analysis: what admins should do now
This is a good idea with a governance catch. Centralizing process instructions beats scattering near-identical prompts across a dozen agents. But a skill that is wrong now misleads every agent that uses it. These are my own conclusions from the documented behavior, not Microsoft statements:
- Treat skills as controlled content. Use the save-versus-activate split as a review gate, and limit who holds edit rights.
- Audit the Skill Sharing Role assignments. The two-role requirement is an easy source of "it works for me but not for them" tickets.
- Don't rely on a skill for enforcement. Approvals and safeguards in a Markdown file are guidance. Put hard controls in the tools and permissions the agent uses.
- Check your environment settings before November. Decide per environment whether Work IQ should be on, especially in regulated ones.
- Keep GA expectations modest. The roadmap's November 2026 date is an estimate, and the documentation still says preview.
Business skills turn process knowledge into a managed, versioned and shareable Dataverse asset for agents. They don't turn it into automation by themselves, so the real work is writing clear instructions, wiring up the right tools and getting the permissions right.