Best Practices with Microsoft 365 Compliance Center

Archiving is not just about saving space; it’s about maintaining control over your data’s lifecycle, ensuring that documents are retained or removed according to legal, regulatory, and operational requirements. Microsoft provides built-in archiving tools within the Microsoft 365 Compliance Center, which help organisations manage data retention, govern compliance, and enable efficient document lifecycle management. This post will explore how you can leverage these features and how Squirrel—an automated document archiving solution for SharePoint—can further enhance your archiving strategy.

Key Takeaway	Description

Retention Labels

Classify and manage document lifecycles in SharePoint Online for compliance purposes. Labels can be applied manually or automatically.

Retention Policies

Apply broad retention rules across entire SharePoint sites to ensure consistency in document management and compliance.

Microsoft Information Protection (MIP)

Use MIP to classify and protect sensitive documents through encryption and restricted access, ensuring only authorised users can view or edit documents.

Squirrel Integration

Squirrel enhances SharePoint Online by automatically archiving documents to Azure Blob Storage, optimising costs and storage management.

Stub Files

Squirrel leaves stub files in place of archived documents, allowing users to easily rehydrate files with one click, maintaining a seamless user experience.

Version Control

Squirrel preserves document versions and metadata, ensuring full restoration of documents with their complete history.

Cost Savings

Archiving older or inactive documents to Azure Blob Storage with Squirrel reduces SharePoint storage costs significantly.

Compliance and Security

Combining Microsoft 365 Compliance Center with Squirrel ensures compliance with regulatory requirements while maintaining secure and encrypted document archives.

Best Practices

Regularly test your archiving strategy, ensure encryption keys are managed correctly, and adjust archiving policies to match evolving business and legal requirements.

Microsoft 365 Compliance Center Overview

The Microsoft 365 Compliance Center is your command center for managing data retention, information protection, and compliance across all Microsoft 365 services, including SharePoint Online. It is designed to help organisations address a range of data governance needs, from basic archiving and retention to advanced compliance requirements such as legal holds and information governance.

Through this centralized interface, you can configure policies that determine how long your content is kept, when it is deleted, and how you can ensure compliance with both internal policies and external regulations. Let’s dive into two of the most important tools offered by the Compliance Center for archiving and retention in SharePoint Online: Retention Labels and Retention Policies.

Retention Labels

Retention labels are one of the primary ways you can classify and manage the lifecycle of documents in SharePoint Online. By applying retention labels, you essentially instruct SharePoint on how to handle a document over its lifetime—whether that means retaining it for a specified period, archiving it, or deleting it after it’s no longer needed.

Key Features of Retention Labels:

• Classification and Lifecycle Control: Retention labels allow organisations to classify documents based on predefined criteria such as document type, content, or sensitivity. This classification directly informs how long the document will be retained, when it should be archived, and when it should be deleted.
• Automatic and Manual Application: Labels can be applied manually by users or automatically based on rules that examine the document’s content or metadata. For example, you could configure a rule to automatically apply a retention label to all documents containing sensitive information, like financial data or client records.
• Retention Without Deletion: One of the standout features of retention labels is the ability to preserve documents without necessarily deleting them. This means you can configure a document to be retained and archived beyond its active use, ensuring it is still accessible for legal or compliance reasons while not cluttering up active document libraries.
• Label Policies: Retention labels are part of a larger retention strategy where you can define policies that group multiple labels together, helping ensure that documents across various departments, such as HR, Finance, or Legal, are archived or retained according to specific rules.

How Retention Labels Work in SharePoint Online:

Retention labels work seamlessly within SharePoint Online by attaching directly to documents or entire libraries. For instance, you could apply a retention label to every document within a particular site collection or document library to ensure that all documents are kept for a period of 7 years (a common legal requirement) before being archived or deleted.

Once the label is applied, SharePoint enforces the retention period defined by the label. If a document needs to be archived after 5 years, the system ensures that the document is preserved in its archived state and is either automatically moved to an archive library or retained in place for further compliance purposes.

Retention Policies

While retention labels are highly useful for classifying and managing individual documents, Retention Policies provide a broader, more holistic approach to data retention across entire SharePoint Online environments. These policies allow you to define retention rules that apply to entire site collections or even across multiple services within Microsoft 365, such as Exchange or OneDrive.

Key Features of Retention Policies:

• Site-Wide Application: Retention policies apply to all content within a specific site, ensuring that every document, list, or library is managed under a single set of retention rules. This is particularly helpful when you need to ensure compliance across an entire department or project.
• Consistent Retention Across Workloads: One of the most powerful aspects of retention policies is their ability to govern retention across multiple Microsoft 365 services. This means you can apply a single retention policy that ensures consistency across SharePoint, OneDrive, and Exchange—important for organisations with complex workflows that span multiple platforms.
• Archiving and Deletion Triggers: Retention policies can be configured to trigger document archiving or deletion based on various conditions. For instance, documents might be archived after a set period of inactivity, or they might be retained for legal reasons until a case is closed. These automated triggers help organisations stay compliant without requiring constant manual intervention.

How Retention Policies Work in SharePoint Online:

Retention policies in SharePoint Online work by monitoring the activity of documents and applying the rules defined in the policy. For example, a retention policy might specify that all documents within a specific project site must be archived after 3 years of inactivity. SharePoint automatically applies these rules, ensuring that the documents are moved to a more cost-effective archive location or deleted once the retention period has ended.

Microsoft Information Protection (MIP)

In addition to retention labels and policies, organisations often need to go a step further when it comes to protecting sensitive data, especially in industries that require strict compliance with regulations like GDPR or HIPAA. This is where Microsoft Information Protection (MIP) comes into play. MIP helps organisations classify, label, and protect sensitive information across SharePoint Online, as well as other Microsoft 365 services.

How MIP Works in SharePoint Online:

MIP allows organisations to classify and label documents based on sensitivity. For example, documents that contain financial data, intellectual property, or personally identifiable information (PII) can be labelled as “Confidential” or “Highly Sensitive.” These sensitivity labels can then trigger various protection measures, such as encryption or restricted access, to ensure that only authorised users can view or edit the document.

MIP integrates directly with Azure Information Protection (AIP) to apply encryption and other protections to files. Once a sensitivity label is applied, the file is protected, regardless of where it is stored or shared. This is particularly important for SharePoint Online, where documents are often shared widely across teams and departments.

Encryption and Compliance with MIP:

When it comes to archiving, MIP adds another layer of complexity due to its encryption capabilities. Files that are encrypted by MIP are secured with a set of encryption keys managed either by Microsoft or by the customer (in cases where Customer Key is used). This can introduce challenges when archiving encrypted files, as organisations must ensure that the encryption keys remain accessible for the duration of the archive period.

Potential Challenges:

• Key Rollover: Encryption keys can change over time, a process known as “key rollover.” If a document is archived for several years, and the encryption key is rolled over or no longer accessible, it may become difficult—or even impossible—to decrypt the document when it is needed in the future.
• Decryption Limitations: While MIP ensures that sensitive data remains protected, it can also limit how and when documents can be decrypted. For instance, if a document is archived with Squirrel but has MIP encryption applied, Squirrel will not be able to decrypt the document because it cannot access the MIP encryption keys.

To mitigate these challenges, it’s crucial for organisations to carefully manage their encryption policies and key lifecycles, ensuring that they remain in sync with archiving strategies.

How Squirrel Complements SharePoint Online Archiving

While Microsoft provides robust tools for retention and protection, these features alone may not be sufficient for organisations managing large-scale SharePoint environments. This is where Squirrel steps in, offering a powerful, automated archiving solution designed specifically for SharePoint Online.

Squirrel extends and complements Microsoft’s native archiving capabilities, providing additional flexibility, cost savings, and features that make managing the document lifecycle more efficient.

Here’s how Squirrel adds value:

Squirrel’s Seamless Integration with SharePoint Online

Squirrel is built to work hand-in-hand with SharePoint Online, leveraging Microsoft’s APIs to ensure a seamless and transparent experience for administrators and users alike. The integration with SharePoint allows Squirrel to automatically archive documents based on predefined policies, moving them to more cost-effective storage without requiring manual intervention from users or IT teams.

Unlike Microsoft’s native retention labels and policies, which primarily focus on compliance and governance, Squirrel is designed to optimise storage costs by moving older, inactive documents to Azure Blob Storage, freeing up valuable SharePoint storage space.

Squirrel’s Key Features for SharePoint Online Archiving

• Automated Document Archiving: Squirrel allows organisations to set up lifecycle policies that automatically archive documents from SharePoint Online based on various criteria such as document age, inactivity, or size. Once archived, the documents are moved to Azure Blob Storage, significantly reducing storage costs while maintaining accessibility.
• Stub Files for Easy Rehydration: One of Squirrel’s standout features is its use of “stub files.” When a document is archived, Squirrel replaces the original file in SharePoint with a small placeholder (stub file) that maintains the file’s original name and location. Users can simply click the stub file to “rehydrate” the document back to its original state, restoring all versions and metadata in the process. This creates a seamless experience for users, as they can retrieve archived documents with minimal effort.
• Version Control and Metadata Preservation: When Squirrel archives a document, it doesn’t just move the current version—it archives all versions of the document along with its metadata (e.g., tags, permissions, audit logs). This ensures that when the document is rehydrated, it retains all the historical information that may be required for legal or regulatory purposes.  
• Data Encryption and Security: Like Microsoft, Squirrel takes data security seriously. All documents archived by Squirrel are encrypted and stored securely in Azure Blob Storage. Importantly, Squirrel manages its own encryption layer, which means that while MIP-encrypted documents can still be archived, Squirrel does not handle their decryption. Instead, it stores these documents in their encrypted state, ensuring compliance without compromising security.  
• Cost-Effective Storage: By archiving inactive or infrequently accessed documents to Azure Blob Storage, Squirrel helps organisations significantly reduce their SharePoint storage costs. Given that Azure Blob Storage is much cheaper than SharePoint storage, this can result in substantial savings for organisations managing large volumes of data.  
• Compliance and Retention: Squirrel works in tandem with Microsoft’s retention policies, ensuring that documents are archived according to legal or regulatory requirements. This dual approach ensures that documents are both securely stored and accessible when needed.

Best Practices for Archiving SharePoint Documents

Effectively managing your SharePoint Online environment requires a comprehensive archiving strategy that addresses both storage optimisation and regulatory compliance. By combining the capabilities of Microsoft 365 Compliance Center with a dedicated archiving solution like Squirrel, organisations can create a more efficient, secure, and cost-effective data management system.

Here are some best practices to help you get the most out of both tools:

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1. Leverage Retention Labels and Policies for Compliance

Start by establishing clear data retention policies that align with your organisation’s compliance requirements. Microsoft 365 Compliance Center’s retention labels and policies are powerful tools that help ensure your documents are managed according to internal guidelines and external regulations.

Best Practice: Use retention labels to classify documents based on content sensitivity, legal requirements, or department-specific needs (e.g., legal, HR, or finance documents). For example:

• Apply retention labels to documents that must be archived for a specific period (e.g., 7 years) before deletion.
• Use retention policies to enforce document retention and archival for entire SharePoint sites or libraries, ensuring consistency across your environment.

Retention labels and policies should be reviewed regularly to ensure they remain up-to-date with evolving compliance regulations and business needs.

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2. Implement Sensitivity Labels for Additional Security

For organisations dealing with sensitive information, such as personally identifiable information (PII), financial data, or intellectual property, Microsoft Information Protection (MIP) is essential. Sensitivity labels not only classify data but also protect it through encryption and restricted access.

Best Practice: Apply sensitivity labels to protect sensitive files and ensure only authorised users can access them. If you archive documents with Squirrel, be aware that MIP encryption will remain intact, and you’ll need to manage encryption keys carefully to ensure access during the archiving period.

Key Consideration: Before archiving, ensure you have a process in place to maintain access to encryption keys, especially if your organisation rotates encryption keys or enforces key rollover policies. Failure to maintain these keys may result in an inability to decrypt archived documents when they are restored.

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3. Use Squirrel for Cost-Effective Archiving

While Microsoft 365 Compliance Center provides robust data governance, it does not directly address storage cost optimisation. This is where Squirrel’s automated archiving solution comes into play, enabling you to move large volumes of inactive or infrequently accessed documents from SharePoint to Azure Blob Storage, where the cost of storage is significantly lower.

Best Practice: Configure Squirrel to automatically archive documents based on criteria such as:

• Document age (e.g., archive documents older than 1 year).
• Inactivity (e.g., archive documents that haven’t been accessed in 6 months).
• File Type (e.g. archive files based on file extension)

By archiving these documents to Azure Blob Storage, you’ll free up SharePoint storage, potentially saving your organisation thousands of dollars annually.

Bonus Tip: Monitor your SharePoint storage usage and adjust Squirrel’s archiving policies regularly to ensure that only the most relevant data remains in active storage. You can also archive entire site collections or large document libraries that are no longer actively used but need to be retained for compliance purposes.

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4. Maintain Metadata and Version History with Squirrel

One common challenge when archiving documents is the risk of losing important metadata and version history. Fortunately, Squirrel ensures that all versions and metadata associated with a document are preserved during the archiving process. This is especially useful when dealing with legal or regulatory requirements where version history must be maintained.

Best Practice: Enable Squirrel’s version control feature to ensure that when a document is archived, all versions are stored and can be restored alongside the original document. This allows your team to easily rehydrate a document back to its original state without losing any historical context.

This level of detail is essential for audit trails, legal discovery, or compliance checks, where the full history of a document’s changes must be available.

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5. Use Squirrel’s Stub Files for Seamless Rehydration

Squirrel’s use of stub files makes it easy for users to access archived documents without disrupting their workflow. When a file is archived, a lightweight placeholder remains in SharePoint Online, allowing users to rehydrate the file with a single click. This eliminates the need for manual document retrieval, making the process transparent to end users.

Best Practice: Leverage stub files to create a seamless experience for your users. When Squirrel archives a document, users won’t even notice it’s been moved to Azure Blob Storage. They can simply click the stub file when they need access, and the document will be rehydrated with all its versions and metadata intact.

This feature can be especially useful in environments where users frequently need access to older documents but don’t want the hassle of navigating an archiving system.

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6. Regularly Test and Validate Your Archiving Strategy

A successful archiving strategy isn’t something you “set and forget.” Regular testing and validation are crucial to ensure that your retention policies, sensitivity labels, and archiving workflows are functioning as expected.

Best Practice: Perform regular checks to:

• Ensure that documents are being archived according to your retention policies.
• Verify that archived documents can be successfully rehydrated using Squirrel’s stub files.
• Test the accessibility of MIP-encrypted documents to ensure that encryption keys are still valid and accessible during the archiving period.

Incorporating these tests into your data governance routine will help avoid surprises when you need to restore critical documents or meet regulatory audits.

Conclusion

Effectively managing the lifecycle of your SharePoint Online documents requires a balance between compliance, security, and storage optimisation. Microsoft 365 Compliance Center offers powerful tools for retention and protection, but integrating a dedicated archiving solution like Squirrel can significantly enhance your organisation’s ability to manage large volumes of data cost-effectively.

By using Microsoft’s retention labels, policies, and sensitivity labels in tandem with Squirrel’s automated archiving, version control, and stub file rehydration features, you can create a comprehensive archiving strategy that meets your organisation’s needs for both compliance and efficiency.

Whether you’re archiving to reduce storage costs, retain documents for regulatory reasons, or secure sensitive data, combining these tools ensures that your organisation stays compliant, secure, and cost-effective—all while providing a seamless experience for end users.