How to Control Agent Sprawl in Microsoft 365

As organizations embrace AI-driven tools like Microsoft Copilot and custom agents, a new governance challenge has emerged: agent sprawl. This blog explores the implications of decentralized agent deployments across Microsoft 365, the risks they pose to security, compliance, and cost control, and how Rencore Governance provides a comprehensive solution.

Whether you're just beginning your governance journey or managing a mature cloud environment, this guide will help you understand the problem and take actionable steps toward resolution.

Understanding the Rise of Agent Sprawl

Microsoft 365 environments are evolving rapidly as organizations adopt AI-powered tools to enhance productivity and automate workflows. Copilot and custom agents are at the forefront of this transformation. However, their decentralized deployment across services introduces a new layer of complexity: agent sprawl. This phenomenon occurs when multiple agents are created and deployed without centralized oversight, leading to fragmented governance and increased risk.

Agent sprawl is not just a technical issue; it’s a strategic challenge that affects how organizations manage data, security, and operational efficiency. As AI adoption accelerates, the need for robust governance frameworks becomes more urgent.

What Is an AI Agent in Microsoft 365?

AI agents in Microsoft 365 are automated entities designed to perform tasks, interact with users, and integrate with services like Teams, SharePoint, Power Platform, and Copilot Studio. These agents can be custom-built or provisioned through Microsoft tools, and they often operate autonomously once deployed.

While agents can streamline operations and improve user experience, they also introduce governance complexities. Each agent may have access to sensitive data, interact with multiple services, and operate under varying permissions, making it essential to monitor and manage their lifecycle.

Shared Challenges Across Governance Maturity Levels

Whether your organization is just beginning its cloud governance journey or has already implemented lifecycle management, agent sprawl presents a shared challenge. Early-stage teams face compounded cloud sprawl issues, where agents are deployed without clear ownership or oversight. For those organizations with a governance plan in place, they must shift toward self-service governance, empowering users to deploy agents responsibly while maintaining centralized visibility.

Industry analysts, including Gartner, are advocating for this shift. As AI accelerates digital transformation, governance models must evolve to support decentralization and self-service without compromising control.

The Risks of Unmanaged Agents

Agent sprawl introduces risks across three critical dimensions:

• Security:
  Unmanaged agents expand the attack surface, making access control and auditing more difficult. A single rogue agent can expose sensitive data or create vulnerabilities.
  
  
• Compliance:
  Outdated or untracked agent data complicates regulatory compliance and data governance. Organizations may struggle to meet GDPR, HIPAA, or internal policy requirements.
  
  
• Cost:
  Under pay-as-you-go models, unchecked self-service adoption can lead to unexpected expenses and increased operational overhead. Each agent instance may incur licensing, storage, or compute costs.

Consider a scenario where a department deploys multiple agents to automate workflows in Teams and SharePoint. Without proper governance, these agents may access sensitive files, duplicate functionality, or remain active long after their usefulness, all contributing to risk and inefficiency.

Best Practices for Agent Governance

To manage agent sprawl effectively, organizations should adopt the following best practices:

• Establish Naming Conventions:
  Ensure agents are easily identifiable by service, owner, and purpose.
  
  
• Implement Lifecycle Policies
  Define creation, review, and decommissioning processes for agents.
  
  
• Use Provisioning Workflows
  Require approval and documentation for new agent deployments.
  
  
• Conduct Regular Access Reviews
  Audit agent permissions and data access to ensure compliance.
  
  
• Monitor Usage and Performance
  Track agent activity to identify redundancies or inefficiencies.

These practices help build a governance culture that supports innovation while maintaining control.

Rencore Governance: A Comprehensive Solution

Introducing Rencore Governance, our platform is designed to support organizations at every stage of their governance journey, from initial assessment and remediation through to empowering end users. Rencore Governance brings together policies, dashboards, reports, and automated processes in one unified solution. This makes it easy for IT teams to achieve complete visibility and control over all Microsoft 365 services:

• Teams
• SharePoint
• OneDrive
• Power Platform
• Copilot for Microsoft 365
• Copilot Studio
• Viva Engage
• Exchange
• Entra ID

Here is how your Agent lifecycle management can be automated with a click of a few buttons. With Copilot and Agent Governance, currently in preview.

Our new Copilot and Agent Sprawl dashboard enables you to inspect agent connections, review related objects, and instantly assess your tenant’s status. The dashboard provides a visual overview of agent distribution, activity levels, and associated risks, helping you take immediate action.

You can manage policies aligned with your governance objectives using our library of predefined templates. Remediation is streamlined through our automation builder, which also includes ready-to-use templates to accelerate resolution. For example, you can automatically disable inactive agents, notify owners of policy violations.

Why Rencore Governance Is Essential for Managing Agent Sprawl

Rencore Governance is purpose-built to help organizations maintain control, compliance, and data integrity as AI adoption grows. With our platform, you can:

• Protect Sensitive Data:
  Prevent unintended exposure across all Microsoft 365 services. Control AI Agent Behavior: Gain transparency into agent operations, data access, and processing.
• Empower Users Responsibly:
  Provide clear provisioning workflows, access reviews, and usage guidelines to ensure assets and workspaces are Copilot-ready and aligned with responsible AI practices.

Rencore Governance bridges the gap between innovation and control, enabling IT teams to support decentralized deployments without sacrificing oversight.

Unlocking Broader Governance Potential

Agent sprawl is just one of many governance challenges Rencore helps you solve. Our platform delivers comprehensive visibility and control across your entire Microsoft 365 landscape. From managing Cloud sprawl to enforcing policies and securing Tenants, Rencore Governance provides the tools you need to stay ahead.

To explore agent sprawl governance, additional use cases, and unlock deeper governance capabilities, click the button below and head to our get started page, where you can book a demo or get in contact today.