Executive Briefing
Protect your Microsoft 365 environment with these essential security configurations and best practices.
Why Microsoft 365 Security Matters
Microsoft 365 processes billions of emails daily and stores vast amounts of sensitive business data. Attackers specifically target M365 environments because they know a single compromised account can provide access to emails, files, and even downstream systems. The good news? Microsoft provides powerful security tools—you just need to enable and configure them properly.
10 Essential Security Configurations
1. Enable Multi-Factor Authentication (MFA) for All Users
MFA is the single most effective security control you can implement. Microsoft reports that MFA blocks 99.9% of account compromise attacks. Enable Security Defaults or configure Conditional Access policies to require MFA for all users, especially administrators.
2. Implement Conditional Access Policies
Go beyond basic MFA with Conditional Access. Create policies that require MFA only from untrusted locations, block legacy authentication protocols, and require compliant devices for access. This provides security without frustrating users on trusted networks.
3. Configure Email Authentication (SPF, DKIM, DMARC)
Email authentication protocols prevent attackers from spoofing your domain. SPF specifies which servers can send email for your domain. DKIM adds a digital signature to verify message integrity. DMARC tells receiving servers what to do with failed messages. All three should be configured correctly.
4. Enable Advanced Threat Protection (ATP)
Microsoft Defender for Office 365 (formerly ATP) provides advanced protection against phishing, malware, and zero-day threats. Safe Links rewrites URLs to check them at click-time. Safe Attachments scans attachments in a sandbox environment before delivery.
5. Configure Data Loss Prevention (DLP) Policies
DLP policies prevent sensitive information from leaving your organisation via email or SharePoint. Create policies to detect and block Australian financial data (TFN, ABN), credit card numbers, and other sensitive information types.
6. Review and Restrict App Permissions
Third-party apps with excessive permissions are a common attack vector. Review OAuth app consents regularly, restrict user consent to approved apps, and require admin approval for apps requesting high-privilege permissions.
7. Enable Unified Audit Logging
You can't investigate what you can't see. Enable unified audit logging to capture user and admin activities across Microsoft 365 services. Configure log retention based on your compliance requirements—90 days minimum, 365 days recommended.
8. Secure Administrative Accounts
Admin accounts are high-value targets. Use dedicated admin accounts separate from daily-use accounts. Enable Privileged Identity Management (PIM) for just-in-time admin access. Require hardware tokens or phishing-resistant MFA for all admin operations.
9. Configure External Sharing Controls
SharePoint and OneDrive external sharing can inadvertently expose sensitive data. Configure sharing policies to require sign-in, set expiration dates on shared links, and limit sharing to specific domains for sensitive content.
10. Implement Information Protection Labels
Sensitivity labels help users classify and protect documents appropriately. Create labels for different data classifications (Public, Internal, Confidential, Highly Confidential) and configure encryption and access restrictions for sensitive labels.
Microsoft Secure Score
Microsoft Secure Score provides a measurement of your organisation's security posture. Check your score regularly at security.microsoft.com and work to improve it over time. Most organisations should aim for a score of 80% or higher.
Important Note
Pro tip: Don't enable every security feature at once. Roll out changes gradually, communicate with users, and monitor for any productivity impacts before proceeding to the next configuration.
How We Researched This Article
This article was compiled using information from authoritative industry sources to ensure accuracy and relevance for Australian businesses.
Sources & References
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Microsoft 365 Security Best Practices
Official Microsoft documentation for M365 security configuration
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Microsoft Security Blog
Latest security research and recommendations from Microsoft
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CISA Microsoft 365 Security Configuration Guidance
US Government cybersecurity agency recommendations for M365 security
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Australian Cyber Security Centre Cloud Security Guidance
ACSC guidance on securing cloud services including Microsoft 365
* Information is current as of the publication date. Cybersecurity guidelines and best practices evolve regularly. We recommend verifying current recommendations with the original sources.
Frequently Asked Questions
Which Microsoft 365 plan do I need for these security features? ▼
Basic security features like MFA and Security Defaults are available in all plans. Advanced features like Conditional Access, Microsoft Defender for Office 365, and Information Protection require Microsoft 365 Business Premium or E3/E5 licenses. For most SMBs, Business Premium provides the best balance of features and cost.
How do I check my current Microsoft 365 security configuration? ▼
Log into the Microsoft 365 Admin Center (admin.microsoft.com) and navigate to Security. Check your Microsoft Secure Score at security.microsoft.com for a comprehensive assessment of your current configuration against best practices.
Will enabling these security features impact user productivity? ▼
Some features like MFA require an adjustment period for users. However, modern MFA methods like the Microsoft Authenticator app are quick and user-friendly. Proper communication and training help ensure smooth adoption with minimal productivity impact.
How often should we review our Microsoft 365 security settings? ▼
We recommend a comprehensive security review quarterly, with ongoing monitoring via audit logs and security alerts. Microsoft frequently adds new security features, so staying current ensures you benefit from the latest protections.