Organizations usually have multiple employees. Small and medium-sized enterprises (SME) is a term describing companies with fewer than 250 employees (EU SME 2018).
Each company may have multiple projects active, involving both internal and external stakeholders. Ideally, all parties involved in a project are able to communicate with each other.

Collaboration in an organizational context is to ensure the smooth communication of ideas, workflow, and effort. As the complexity of a project increases, it is crucial that a collaborative environment is in place.
Complexity may scale with factors such as the number of stakeholders involved, the timescale of the project, and the responsibility of each deliverable.

There are various tools available to support collaborative work. These can be broadly categorized as standalone software and web applications.
An example of standalone software is SharePoint, bundled in the Microsoft Office suite.
Google Docs/Sheets/Slides are web-based collaborative software.