Managing Copilot: Billing, Monitoring & Prompts

Maya’s admin checklist

Simple explanation

Think of Maya as the manager of a gym membership programme.

She needs to: give members their access cards (assign licenses), track who’s actually using the gym (monitor adoption), make sure the monthly bill makes sense (manage billing), and set rules about what equipment is available (govern prompts and features).

If she gives everyone a card but nobody shows up, she’s wasting money. If someone runs up a huge bill on the premium equipment, she needs alerts. And if people are using the equipment unsafely, she needs policies.

That’s Copilot admin in a nutshell.

1. Assigning Copilot licenses

Two methods — the exam tests both:

Individual assignment (small scale or pilot)

M365 admin center → Users → Active users
Select the user → Licenses and apps
Check Microsoft 365 Copilot → Save changes

Best for: Quick pilot access (e.g., “give the CEO Copilot today”), testing with a small group.

Group-based assignment (recommended for scale)

M365 admin center → Groups → Active groups
Select the group → Licenses
Assign licenses → select Microsoft 365 Copilot → Save

Best for: Department rollouts. Everyone in the group gets Copilot automatically — new members inherit the license when added.

Exam tip: Individual vs group licensing

The exam often presents a scenario where an admin needs to “enable Copilot for the Marketing department.” The answer is almost always group-based licensing — not individual assignment. Individual assignment doesn’t scale and requires manual work for every new hire.

Watch for: Questions about removing access. With group-based licensing, you remove the user from the group — the license is automatically unassigned. With individual assignment, you must manually remove it.

2. Managing pay-as-you-go billing

Setting up pay-as-you-go is a two-step process:

Step	Where	What You Do
Step 1: Create billing policy	M365 admin center → Copilot → Billing & usage → Billing policies	Name the policy, link to Azure subscription, set user scope, define budget + alerts
Step 2: Connect to Copilot service	Same page → Pay-as-you-go services tab	Select the Copilot service (e.g., Copilot Chat) and attach your billing policy

Critical: Both steps are required. If you only create the policy but don’t connect it to a Copilot service, pay-as-you-go stays disabled for those users.

Budget alerts — set these or regret it

When creating a billing policy, always set budget alerts:

50% threshold → early warning
80% threshold → investigate usage patterns
100% threshold → take action (review, restrict, or convert heavy users to monthly)

Without alerts, a project team that suddenly hammers Copilot (during year-end reporting, for example) can triple your monthly costs. The alerts go to email recipients you specify — include yourself AND finance.

3. Monitoring usage and adoption

This is where Maya answers: “Are people actually using Copilot? Is it worth the cost?”

Where to monitor Copilot usage
Tool	What It Shows	Where to Find It
M365 admin center reports	Enabled vs active users, usage by app	Reports → Usage → Copilot
Copilot Analytics	Adoption trends, feature diffusion, user segments	M365 admin center → Copilot section
Viva Insights	Deeper adoption analysis, productivity impact	Viva Insights Copilot Dashboard
Azure Cost Management	Pay-as-you-go spend, cost trends, budget status	Azure portal → Cost Management

The key metric: enabled vs active

Enabled users = people who have a Copilot license assigned
Active users = people who actually used Copilot in the reporting period

If you have 200 enabled but only 50 active, you’re paying for 150 unused licenses. Maya’s job is to close that gap — either by driving adoption or reallocating licenses.

Scenario: Northwave's monthly Copilot review

Maya runs her monthly check:

M365 admin center → Reports → Copilot — 200 enabled, 142 active (71% adoption)
Breakdown by app: Teams 89%, Outlook 76%, Word 45%, Excel 22%
Action: Excel adoption is low → schedule training for finance team
Azure Cost Management — pay-as-you-go engineers used $1,200 (within $1,500 budget)
Action: 3 engineers used it heavily → consider switching them to monthly licenses (cheaper)

This monthly review cycle is exactly what the exam expects admins to do.

4. Managing prompts

Prompts are how users interact with Copilot. As an admin, you need to govern how prompts are saved, shared, and reused.

Action	What It Means	Where
Save	Users save effective prompts for reuse in their Prompt Library	In-app (personal)
Share	Share prompts with colleagues or M365 Groups	Via Microsoft 365 Groups
Schedule	Set prompts to run automatically (Copilot Scheduler)	Copilot Scheduler
Delete	Remove prompts from the library	Prompt Library
Govern	Admin controls who can share, what’s auditable	Prompt Policies in admin center

Why prompt governance matters

Without governance, users might:

Share prompts containing sensitive instructions — “Summarise all salary data for the exec team”
Create misleading organisational prompts — prompts that look official but produce unreliable output
Bypass compliance — prompts that extract data in ways that violate DLP policies

Admin controls:

Prompt Policies — control who can share prompts and at what scope
Audit logs — track prompt creation, sharing, and usage in Reports → Copilot Usage
Naming standards — encourage descriptive names so prompts are discoverable and trustworthy

Exam tip: The exam tests whether you know that prompt sharing and scheduling are admin-configurable — they’re not just user features.

Operational best practices

The exam also tests general admin best practices:

RBAC / least privilege — don’t make everyone a Global Admin. Use specific roles:
- License Administrator — assigns licenses
- Billing Administrator — manages billing policies
- Compliance Administrator — manages prompt policies and audit
Group-based licensing for onboarding — new hires automatically get Copilot when added to their department group
Service health monitoring — check M365 admin center → Service health for Copilot issues
Communication plans — tell users WHAT Copilot can do, train them on good prompts, set expectations

🎬 Video walkthrough

🎬 Video coming soon

Managing Copilot Day-to-Day — AB-900 Module 26

~12 min

Flashcards

Question

What are the two methods for assigning Copilot licenses?

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Answer

1) Individual assignment — M365 admin center → Users → Active users → select user → Licenses and apps. 2) Group-based — assign to an Entra ID group, all members inherit automatically.

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Question

What two steps are required to enable pay-as-you-go Copilot billing?

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Answer

Step 1: Create a billing policy (link Azure subscription, set budget). Step 2: Connect the policy to a Copilot service (e.g., Copilot Chat) on the Pay-as-you-go services tab. BOTH are required.

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Question

What's the difference between 'enabled users' and 'active users' in Copilot reports?

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Answer

Enabled = have a license assigned. Active = actually used Copilot in the reporting period. A big gap between them means you're paying for unused licenses.

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Question

What four things can users do with prompts that admins need to govern?

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Answer

Save (to Prompt Library), Share (via M365 Groups), Schedule (via Copilot Scheduler), Delete. Admins control sharing scope and auditability through Prompt Policies.

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Knowledge Check

Maya set up a pay-as-you-go billing policy and linked it to an Azure subscription. But users still can't access Copilot. What did she miss?

Knowledge Check

Northwave has 200 Copilot licenses. Maya's report shows 200 enabled users but only 80 active users. What should she do FIRST?

Next up: Building Agents — hands-on: how to create Copilot Chat agents and SharePoint agents, step by step.