Best Practices for Protecting Your Company Data with Microsoft 365

10 November 2025

A world where data breaches cost companies millions, Microsoft 365 is a solid platform for collaboration and security. From common risks to hands-on implementation, this guide walks you through proven best practices to protect your company data. You'll learn to enable multi-factor authentication, configure data loss prevention, encrypt files on endpoints, and conduct regular audits. Whether you're working with customer records or internal documents, here are the best practices to reduce vulnerabilities without slowing your team down. 

Spotting Data Risks in Microsoft 365

All businesses use Microsoft 365 but the tools also provide entry points for attackers. Cyber threats go after shared documents in OneDrive or phishing emails in Outlook and then steal credentials or leak files. Realising these risks early lets you select defences that fit your operations. Microsoft says that 99% of breaches start with compromised identities. Therefore, look first at user habits and system gaps.

• Phishing and Social Engineering: In fake emails posing as trusted sources, attackers trick users into giving login details. Teach staff to check sender addresses & hover over Links before clicking. Microsoft's Safe links scans attachments in real time.
• Unpatched Vulnerabilities: Alt apps like Excel or Teams can let data slip when exploits strike. Allow automatic updates in the admin centre to fix issues within days of release.
• Insider Threats: Some employees accidentally post private files through external links. Watch sharing settings in SharePoint for restricted access by verified domains.
• Ransomware Hits: Malware locks files in OneDrive and demands payment. Back up data outside of the platform and scan for suspicious patterns with Microsoft's Advanced Threat Protection.
• Third-Party App Risks: Connected apps from the Microsoft marketplace could pull data unchecked. Review permissions weekly & revoke access for unused integrations. 

For setup, maintenance and security of your Microsoft apps, work with an experienced Office 365 managed service provider for end-to-end support.

Setting Up Multi-Factor Authentication

A second check beyond passwords makes it hard for hackers to break in even if they do manage to get in with login credentials. Microsoft markets MFA as a defence tool where it blocks more than 99.9% of all account compromise attempts when enabled. Try rolling it out across  for admins and then all users. This simple layer protects emails, calendars and files without much effort.

• Turn on MFA in Entra ID: Sign in to the Microsoft Entra admin centre, open the Protection section, go to Multifactor Authentication, and then select your users. For quick approvals, use app-based methods such as Microsoft Authenticator.
• Phased Rollout: Start with high-risk groups like executives and expand from there. Ease adoption by requiring MFA only on risky sign-ins with conditional policies.
• App and Device Support: MFA works on phones, hardware keys or SMS. Choose options that match your team's tech setup. Testing it in offline hours will cause no disturbances.
• User Training: Brief guides on why MFA matters and how to set it up via Teams. Remind them it's a one-time effort for ongoing peace of mind.
• Monitoring Compliance: Track usage on reports to identify non-compliant users. Set reminders to enforce it consistently across the board.  

To understand which Microsoft 365 plan gives you the right balance of security and features, explore our comparison of Microsoft 365 Standard vs Premium  for a clearer breakdown.

Deploying Data Loss Prevention Policies

The data loss prevention scans for sensitive info like credit card numbers or health records and blocks or alerts on risky actions. In Microsoft 365, DLP works across Exchange, SharePoint and Teams to detect leaks before they occur.  

• Define Sensitive Types: Create custom classifiers for data patterns like employee IDs/project secrets in the Compliance Centre. Combine with prebuilt templates for quick starts.
• Policy Locations: Rules for email, endpoints & cloud apps. For example, block attachments with social security numbers from leaving your domain.
• Action Choices: Choose between admin alerts, user notifications or outright blocks. Test first with audit mode; refine while not interrupting work.
• Integration with Labels: Use sensitivity labels to mark files automatically and tie to DLP for additional enforcement on shared links.
• Reporting and Tuning: Check activity logs weekly for threshold adjustments. This means policies change as your data flows. 

Strengthening Endpoint Security

Endpoints such as laptops and phones store a lot of your data, so endpoint security protection is the front line. Microsoft Defender for Endpoint monitors malware and unusual behavior in your Microsoft 365 setup, helping detect threats early and isolate infected devices before they spread.

• Deploy Defender Agents: Install via Intune to enable automatic rollout. It scans on Windows, macOS and mobiles too, and files in OneDrive as well.
• Threat Detection Rules: Configure custom alerts for behaviours like unauthorised USB access. AI can spot real dangers before false alarms.
• Automated Responses: Configure actions like quarantining files/blocking IPs on detection. Connect to your SIEM for more analysis.
• Vulnerability Management: Run scans for weak software and push patches through Microsoft Update.
• Compliance Checks: Make sure devices meet encryption standards before using 365 resources. Fixes need regular health reports. 

Encrypting Data and Planning Backups

Encryption scrambles data so only authorised eyes can read it during transit or storage. Microsoft 365 does this natively via BitLocker on devices and service-side encryption for cloud files. Combine this with backups to recover from deletions or attacks using the 3-2-1 rule: three copies, two media types, and one offsite. This duo makes data available and confidential.

• Enable BitLocker: Windows devices can turn it on via Intune for full-disc encryption. Securely recover keys in Azure.
• Cloud Encryption: OneDrive and SharePoint all by default encrypt-check customer-managed keys to get more control.
• Email Encryption: With Office Message Encryption, you secure Outlook attachments. Make it the default for external sends.
• Backup Schedules: Automated copies can use Veeam or native retention policies. Test restores quarterly.
• Immutable Storage: Back up in read-only vaults to prevent ransomware overwrites. 

Conclusion

Securing Microsoft 365 requires combining strong technical measures with informed workflows. Implementing multi-factor authentication, data loss prevention, endpoint security, and regular audits helps reduce vulnerabilities and protect sensitive company data.

Ongoing monitoring, timely updates, and staff awareness ensure long-term protection. Following these practices enables businesses to safeguard information, maintain compliance, and focus on daily operations confidently.