Most enterprise leaders do not get a real time view of their business. What they see is an assembled view, drawn from reports, dashboards, reviews, and follow-up discussions that often reflect what happened days or weeks earlier. The AI tools they rely on provide limited automation and thus limited productivity gains.
From a distance, the technology foundation appears sound. Data platforms are modern, AI initiatives are underway, and dashboards indicate progress. Yet when decisions need to be made, uncertainty remains. Numbers require explanation, definitions need alignment, and insights are revisited before action can follow. The issue is not the absence of intelligence, but the absence of full context at the point where work is getting done.
In absence of context, even the smartest AI tools become only isolated experiments.
The Risk of Scattered Intelligence
What makes this gap more serious is not just lost efficiency, but loss of control as AI usage scales across the organization.
AI tools and agents are expanding rapidly across enterprises. By 2028, businesses are projected to have 1.3 billion AI agents automating workflows. Yet most organizations lack clear visibility into what data these agents are learning from, how accurate they are, or whether they are operating within policy. Without proper governance in place, AI agents risk becoming the next form of shadow IT.
Microsoft IQ: A Unified Brain for the Entire Organization
What Is the Microsoft IQ?
Microsoft has introduced a new intelligence layer across its stack comprising Work IQ, Fabric IQ, and Foundry IQ—that together move the platform toward unified intelligence.
While most AI tools today come as bolt-on solutions – integrating with our work tools and systems with connectors, with Microsoft IQ – we have AI Built for Work.
Work context, data meaning, and enterprise knowledge align across teams and systems:
- AI understands how work actually happens inside the organization
- Data carries consistent meaning across systems
- Information is retrieved and used with the right context and permissions
This allows AI to move beyond answering questions to actually getting work done, the way you would have done it...
The 3 Pillars of the Microsoft IQ Framework
Microsoft IQ is currently conceptualized with 3 primary components:
- Work IQ: Understands how work happens
- Fabric IQ: Defines shared meaning across data
- Foundry IQ: Connects enterprise knowledge
Work IQ
Work IQ is the intelligence layer powering M365 Copilot. It understands you, your job, and your company. Unlike other AI tools (e.g. ChatGPT) which connect to your work apps (like Outlook, Word, Excel) with connectors and rely only on the data extracted, Work IQ knows the ‘Context’ and ‘Relationships’. It works with all your data, in real-time, with full context. It knows what you are working on, who you are working with, it has access to all your data, files, documents, chats, meetings and emails.
How Work IQ Understands Work
Work IQ learns from everyday activities across the organization. It observes how people collaborate, which information they rely on, how work flows across tools, and where decisions take shape.
This allows AI to move beyond generic responses. Instead of reacting to isolated prompts, it responds with an understanding of role, timing, and intent.
As a simple example, let’s say the health of a long-term customer account changes from green to orange.
Customer Success notices a gradual rise in support tickets and slower progress during routine check-ins. Sales sees that expansion conversations are no longer moving forward as expected. Around the same time, the support team sees the same issue repeating across support summaries while the product teams get repeated requests for a new feature and major drop in usage of previously well adopted features.
Individually, none of these signals may seem critical. Taken together, they usually point to a major risk ahead.
With Work IQ in place, these signals do not remain isolated. Context connects across teams. What Customer Success is sensing, what sales is experiencing, and what product is observing are understood as part of the same situation as it develops. Teams align earlier, while there is still time to act.
The Intelligence Behind Work IQ
Work IQ has three components:
- Data: It draws signals from emails, meetings, documents, and conversations to reflect how work really moves through the organization.
- Memory: It builds a persistent model of collaboration and decision patterns, capturing how teams operate over time rather than relying on static structures.
- Inference: It uses context and memory to anticipate what matters next, surface relevant connections, and support decisions at the moment they are being made.
From Answers to Actions
With access to all our work data, Work IQ identifies Patterns and Insights. It starts picking signals to learn what we are doing, how we respond to people and situations, and how we solve a problem.
For example, to learn about us, who do we work for, and who do we work with, Work IQ in Microsoft Copilot does not rely solely on our formal org chart (from HR or Active Directory). Instead, it builds a dynamic, real-time “work chart” by analyzing signals from across our Microsoft 365 environment.
1. Microsoft Graph Directory (Org Chart)
- Work IQ uses Microsoft Graph as the foundation, which includes our official org chart, reporting lines, and directory information from Azure Active Directory (now Entra ID).
- This gives Copilot access to our manager, direct reports, department, and other formal relationships.
2. Collaboration Signals (Work Chart)
- Work IQ goes beyond the static org chart by continuously analyzing:
- Emails: Who we communicate with most frequently.
- Teams chats and meetings: Who we collaborate with in real time.
- Shared documents and projects: Who co-authors, reviews, or comments on our files.
- Calendar invites: Who we meet with regularly.
- This creates a “work chart” that reflects our actual day-to-day collaborators, project teams, and informal networks—often more accurate than the HR org chart for how work really gets done.
3. Inference and Memory
- Work IQ builds a persistent memory of our work patterns, preferred collaborators, and recurring teams.
- It uses inference to connect the dots between formal org structure and real working relationships, surfacing the people and teams most relevant to current context.
Copilot and Work IQ can recommend the right people, summarize team activity, and surface relevant files or chats—even if those connections aren’t visible in the formal org chart.
This approach helps Copilot deliver context-aware assistance that matches how organization actually works, not just how it’s structured on paper.
Copilot unlocks 3 patterns of work:
- AI Assistants
- AI Teammates
- AI Operators
When working as an assistant, the Copilot responds to our questions, equipping us with data, information and analysis – picked from external sources as well as from the enterprise data that it gets grounded in.
Equipped with Copilot Agents, we now have an AI Teammate which participates in our work actively. We can get these agents complete routine mundane tasks, that are important to do, but not necessarily the best utilization of our time.
The M365 Copilot app provides a ‘chat 1st’ experience that brings together Chat, Search, Agents, and our work Apps.
With the new ‘Workforce Insights Agent’ and the ‘Project OPAL’ Microsoft’s Work IQ is setting new standards of AI built for Work, as an AI Operator.
Opal – not Generally Available yet - is being built as the Unified Knowledge Layer – unifying and orchestrating enterprise knowledge, data, and AI agents across Microsoft 365, Dynamics 365, and Azure. It acts as a backbone for “Work IQ,” “Fabric IQ,” and “Foundry IQ”. It orchestrates deployment and management of AI Agents (Copilots, custom bots) that can reason act and automate tasks across enterprise. Opal enforces enterprise-grade security, compliance, and permissions, ensuring that agents and users only access what they are authorized to see. It is deeply integrated with Microsoft Fabric, OneLake, Azure AI, and the broader Microsoft 365 suite.
Fabric IQ
Data fuels AI, but Data itself is not enough. AI needs to understand:
- What the data means
- How things relate, and
- Which Actions impact
Fabric IQ is a semantic foundation that gives business meaning to enterprise data. It creates a shared business language by defining core concepts like customer, product, revenue, and region, and how they relate to each other. This semantic backbone ensures that data across Microsoft Fabric and OneLake is interpreted the same way everywhere, by dashboards, reports, and AI alike and enables us to drive action – not just with our teams, but also with AI Agents. As we get ‘signals’ from our Operations, Fabric IQ triggers the ‘Observe’, ‘Analyze’, ‘Decide’ and ‘Act’ cycle.
The core components of IQ include:
|
IQ |
Semantic Models |
Ontology |
Digital Twin Builder |
Graph |
Data Agents |
Operations Agents |
||
|
Copilot |
OneLake |
Governance |
||||||
With IQ, Fabric becomes the ‘Operating System for Modern Enterprise.
Key Benefits of Fabric IQ
- Built on Unified Data Foundation
- Millions of Power BI models available to jumpstart Ontology
- Live, Unified, Real-time view of the business context
- Integrated with M365 and Microsoft Foundry
Foundry IQ
Foundry IQ is Microsoft’s unified knowledge layer for AI agents. It provides a single, governed way for agents to discover, retrieve, and use enterprise knowledge, without requiring custom retrieval pipelines for each use case.
It builds on the shared meaning provided by Fabric IQ and turns it into usable knowledge for AI agents. It brings together data, and content from Fabric, Microsoft 365, and other enterprise sources into governed knowledge bases. AI agents use these knowledge bases to retrieve information, reason across sources, and answer complex questions with the right context and permissions applied.
Instead of building and maintaining separate search logic, indexes, and RAG setups for every agent, Foundry IQ offers a managed retrieval and reasoning layer. It ensures AI agents access the right information, from the right sources, with the right permissions, every time.
Foundry IQ is built on Azure AI Search and extended through the Foundry knowledge framework. It is designed to support AI agents that need reliable, permission-aware access to enterprise knowledge at scale.
The Role Foundry IQ Plays
Central to Foundry IQ is ‘Knowledge Base’ – which can be spread over:
- AI Search Indexes
- Azure Blob Storage
- Fabric OneLake
- SharePoint
- M365 SharePoint
- Web
- MCP Servers
Foundry IQ performs Automated Data Preparation, Vector/ Text indexing, and also semantic re-rank boost.
With these capabilities Foundry IQ is becoming the future of RAG with Agentic Knowledge Retrieval.
Governance is enforced by design. Access rules and permissions are preserved from indexing through retrieval, so agents see only what they are allowed to see, without developers embedding access logic into every workflow.
This allows AI to reason across documents, data, and context without relying on fragile, one-off retrieval setups.
Key Benefits of Foundry IQ
Without a unified knowledge layer, every AI use case becomes an engineering exercise, with duplicated retrieval logic and inconsistent results.
With Foundry IQ in place:
- AI agents access enterprise knowledge through a single, consistent interface
- Knowledge bases are defined once and reused across agents and scenarios
- Retrieval is fast and precise, drawing from the right sources with proper context
- Security and permissions are applied automatically and consistently
- Engineering effort drops as retrieval logic is centralized and managed
The result is AI that acts with greater accuracy, consistency, and trustworthiness, without increasing complexity behind the scenes.
Intelligence to Impact: Putting Microsoft’s IQ Layer to Work
Microsoft’s IQ layer lays the foundation for actionable intelligence—but real value comes only when it is operationalized to fit how your business runs. At Alletec, we help organizations move from isolated AI adoption to a coherent, enterprise-wide intelligence model. To learn more, get in touch.
