Modern M365 Hardening for Hybrid Teams

Microsoft 365's default security settings aren't enough for today's threat landscape, especially for Australian businesses managing hybrid teams. Here's how to properly harden your M365 environment without breaking productivity.

The Hybrid Challenge

Remote and hybrid work has fundamentally changed how we need to think about M365 security:

Perimeter-less environment: Traditional network boundaries don't exist
Increased attack surface: More endpoints, more locations, more risk
Shadow IT proliferation: Users finding workarounds when security gets in the way
Compliance complexity: Meeting Australian regulatory requirements across distributed teams

The solution isn't to lock everything down—it's to implement smart security that adapts to how your team actually works.

Essential Hardening Steps

1. Multi-Factor Authentication (MFA) - Beyond the Basics

Standard approach: Enable MFA for everyone Better approach: Risk-based conditional access

Conditional Access Policies:
- Require MFA for all cloud apps
- Block legacy authentication completely
- Require compliant devices for high-risk users
- Block sign-ins from unknown locations

Australian considerations:

Use app-based authenticators (Microsoft Authenticator) rather than SMS
Consider phone call backup for rural areas with poor mobile coverage
Implement number matching to prevent MFA fatigue attacks

2. Conditional Access - The Security Brain

Configure these policies for optimal security without user friction:

High-Risk Locations

Block sign-ins from countries where you don't operate
Require additional verification for unfamiliar locations
Allow trusted locations (office IPs) with reduced requirements

Device Compliance

Require device registration and compliance
Block access from non-compliant devices
Implement device-based conditional access

Application Protection

Require approved client apps
Implement app-based conditional access policies
Block risky sign-in attempts

3. Identity Protection - Automated Response

Enable Azure AD Identity Protection to automatically respond to threats:

Risk Policies

Sign-in risk policy: Require MFA for medium/high risk
User risk policy: Require password change for compromised users
Registration policy: Ensure all users register for MFA

Australian Privacy Considerations

Configure data retention policies to comply with Privacy Act
Ensure user risk data is handled appropriately
Document risk assessment procedures for audits

4. Advanced Threat Protection (ATP)

Safe Attachments

Enable for SharePoint, OneDrive, and Teams
Use dynamic delivery for email attachments
Block executable file types in email

Safe Links

Protect links in email, Teams, and Office apps
Enable real-time URL scanning
Track user clicks for security awareness

Anti-phishing

Enable impersonation protection for executives
Protect against domain spoofing
Set up custom blocked senders lists

5. Information Protection - Data Loss Prevention

Sensitivity Labels

Classify documents based on business impact
Automatically apply protection based on content
Integrate with Australian Government Protective Security Policy Framework (PSPF) classifications

Data Loss Prevention (DLP)

Prevent sharing of sensitive Australian data (TFN, ABN, etc.)
Monitor for credit card numbers and bank accounts
Block sharing of confidential documents externally

6. Endpoint Management with Intune

Device Compliance

Require device encryption
Mandate up-to-date operating systems
Block jailbroken/rooted devices

App Protection Policies

Prevent copy/paste of corporate data
Require PIN/biometric for app access
Wipe corporate data on non-compliant devices

Configuration Profiles

Deploy standard security baselines
Configure VPN settings for remote access
Implement certificate-based authentication

7. Teams Security - Collaboration Protection

Guest Access

Allow guest access but control permissions
Require guest approval process
Monitor guest activity

External Sharing

Limit external sharing capabilities
Require business justification for external Teams
Implement expiration dates for guest access

Information Barriers

Prevent communication between conflicted groups
Implement compliance boundaries
Support Chinese walls requirements

Australian-Specific Configurations

Privacy Act Compliance

Data Location

Ensure data residency in Australian datacentres
Configure multi-geo capabilities if required
Document data flows for privacy assessments

Data Subject Rights

Configure eDiscovery for access requests
Implement deletion policies for right to be forgotten
Maintain audit logs for privacy compliance

Government Security Requirements

Essential Eight Integration

Application control through Intune policies
Patch management via Windows Update for Business
Macro restrictions in Office apps
User application hardening policies

IRAP Considerations

Use Australia Government zones where required
Implement additional encryption for sensitive data
Enhanced audit logging and monitoring

Implementation Roadmap

Phase 1 (Days 1-14): Foundation

Enable Security Defaults as baseline
Configure MFA for all users
Block legacy authentication
Enable basic conditional access policies

Phase 2 (Days 15-30): Enhanced Protection

Deploy Advanced Threat Protection
Configure device compliance policies
Implement information protection labels
Set up DLP policies

Phase 3 (Days 31-45): Advanced Features

Configure risk-based conditional access
Deploy endpoint management policies
Implement information barriers if required
Fine-tune security policies based on usage

Phase 4 (Days 46-60): Monitoring and Optimization

Set up security monitoring and alerting
Conduct security awareness training
Review and optimize policies
Document procedures and playbooks

Common Configuration Mistakes

Over-restricting Access

Mistake: Blocking legitimate business activities Solution: Use report-only mode first, then gradually enforce

Ignoring User Experience

Mistake: Implementing security that users circumvent Solution: Involve end-users in policy design and testing

Inconsistent Policies

Mistake: Different rules for different groups without clear rationale Solution: Standardise policies with well-documented exceptions

Poor Change Management

Mistake: Implementing changes without user communication Solution: Communicate changes, provide training, offer support

Security Monitoring

Key Metrics to Track

Sign-in success/failure rates
MFA bypass attempts
Risky sign-in detections
DLP policy violations
Device compliance rates

Australian Compliance Reporting

Privacy breach indicators
Data residency compliance
Access control effectiveness
Audit log completeness

Continuous Improvement

M365 security isn't a set-and-forget exercise. Regular activities include:

Monthly Reviews

Conditional access policy effectiveness
Security incident analysis
User access reviews
Device compliance reporting

Quarterly Assessments

Security baseline comparison
Risk assessment updates
Policy optimization based on usage patterns
Security awareness training effectiveness

Annual Audits

Complete security configuration review
Compliance assessment against Australian requirements
Penetration testing of configured environment
Business continuity testing

Getting Started

Assessment: Use Microsoft Secure Score to understand your current security posture
Baseline: Implement Security Defaults as minimum protection
Plan: Develop phased implementation based on your risk profile
Implement: Roll out changes gradually with user communication
Monitor: Set up reporting and regular review processes

Remember: Perfect security that prevents work isn't security—it's just an obstacle that users will work around. The goal is implementing robust protection that enables secure productivity for your hybrid teams.

Need help implementing M365 security for your Australian business? Contact CIO247 for a security assessment and implementation roadmap tailored to your hybrid workforce.