What Is SharePoint and How Does SharePoint Work?

If your team stores documents in email threads, desktop folders, Teams chats, and personal OneDrive accounts, finding the latest file quickly becomes frustrating. I have seen this happen often with HR teams managing policies, finance teams handling invoices, and project teams sharing plans.

That is where SharePoint Online helps. It gives your organization one structured place to store documents, track information, control access, and build collaboration spaces around real business work.

Let’s look at what SharePoint is, how SharePoint works, and how you can start using it without overcomplicating the setup.

What Is SharePoint?

SharePoint is a Microsoft 365 platform for storing, organizing, sharing, and managing business content. Teams use it to create internal sites, manage shared documents, track business data, publish news, and automate processes.

At its core, SharePoint gives you a secure workspace where people can work with the same information. Instead of emailing updated files back and forth, your team works from one shared location.

For example, imagine a small project team working on a new product launch. They may need:

• A shared place for project plans, contracts, and design files
• A task or issue tracker
• A news page for project updates
• Controlled access for internal team members and external vendors
• Approval workflows for documents or requests

A SharePoint site brings these pieces together.

SharePoint is part of Microsoft 365, so it works closely with Microsoft Teams, OneDrive, Outlook, Power Automate, Power Apps, and Power BI. If you use Teams today, you already use SharePoint more than you may realize. Files uploaded to a Teams channel are stored in a SharePoint document library behind the scenes. You can learn more about the relationship in this guide on Microsoft Teams vs SharePoint.

If you want to learn SharePoint, check out the SharePoint Online training course.

How Does SharePoint Work?

To understand how SharePoint works, think of it as a set of connected building blocks:

1. You create a SharePoint site for a team, department, project, or organization-wide purpose.
2. The site contains document libraries for files and lists for structured information.
3. You give people the right permissions to view, edit, or manage content.
4. Team members work on files together, update list items, and use views to find what matters.
5. You connect the site with Teams, Power Automate, Power Apps, and other Microsoft 365 tools when needed.

Let’s use a consistent example: a SharePoint project site for a small marketing team launching a new campaign.

The team creates one site called “Spring Campaign.” Inside that site, they store creative files, maintain an issue tracker, publish campaign updates, and manage approvals.

A SharePoint Site Is the Workspace

A SharePoint site is the main workspace for a group of people or a business purpose. Each site has its own content, navigation, document libraries, lists, pages, and permissions.

There are two main modern site types you need to know.

Site type	Best for	Typical contributors
Team site	Working together on files, tasks, and project information	Project teams, departments, working groups
Communication site	Sharing information with a broad audience	HR, leadership, internal communications teams

A Team site supports active collaboration. In the Spring Campaign example, marketing team members upload files, update tasks, and work on campaign content every day.

A Communication site focuses on publishing. For example, HR may use one to publish policies, company news, benefits information, and training resources for employees.

Before creating a site, decide whether people need to actively contribute or mainly consume information. That one decision avoids many messy site designs later. For a closer look at the differences, read SharePoint communication site vs Team site.

How SharePoint Stores Files

A document library is a secure file storage area inside a SharePoint site. It works like a shared folder, but it offers much more control than a normal network drive.

For the Spring Campaign site, I would create a document library named Campaign Files. The team can store briefs, images, PowerPoint decks, contracts, and final assets there.

Here is how to create one:

1. Open your SharePoint site and select New from the site home page.
2. Select Document library.
3. Then choose Blank library. Enter a clear name, such as “Campaign Files”.
4. Select Create.
5. Upload a few files or create folders only where they make sense.

Here is a screenshot for your reference from one of my SharePoint Online sites.

A document library supports versioning, which saves earlier versions of a file whenever someone changes it. If a team member overwrites an approved design, you can restore an older version instead of starting over.

It also supports real-time co-authoring. Several people can edit the same Word, Excel, or PowerPoint file at once, and SharePoint keeps the changes in the shared copy.

Pro Tip: I have found that teams often create too many folders before they understand how they will search for files. Start with a simple structure, then use metadata and views as the library grows.

Use Metadata Instead of Deep Folders

Metadata means information that describes a file or list item. In a document library, metadata usually appears as columns.

For the Campaign Files library, add columns such as:

• Campaign Phase — Choice column with Planning, Design, Review, Launch, and Complete
• Document Type — Choice column with Brief, Design, Contract, Report, or Presentation
• Owner — Person column for the responsible team member
• Approval Status — Choice column with Draft, In Review, Approved, or Archived

To add a column, open the library, select Add column, choose the column type, give it a name, and save it.

These columns help the team filter files without placing every item inside a complicated folder structure. A designer can quickly filter for “Design” files that are “In Review,” while a project manager can see every file owned by a particular person.

A view is a saved way to display data. You can create a view called “Files Awaiting Review” that filters Approval Status to “In Review.” Another view could group files by Campaign Phase.

How SharePoint Tracks Information

Use a SharePoint list when you need to track structured information rather than files. A list looks similar to an Excel table, but it lives in SharePoint and supports permissions, views, automation, attachments, and integration with Microsoft 365.

In the Spring Campaign site, I would create a list named Campaign Issues. Each item represents one issue that needs attention.

Create the list like this:

1. On the SharePoint site, select New.
2. Select List.
3. Choose Blank list.
4. Name it “Campaign Issues.”
5. Select Create.

Next, add useful columns:

• Issue Title — Use the default Title column
• Status — Choice column with New, In Progress, Blocked, and Closed
• Priority — Choice column with Low, Medium, High, and Critical
• Assigned To — Person column
• Due Date — Date column
• Details — Multiple lines of text column

The team can create a view named “My Open Issues” that filters Assigned To to the current user and hides closed items. You can also create a board-style view that groups work by Status. For more ideas, see this guide on SharePoint list views.

A list is a better choice than an Excel file when multiple people need to update data regularly. It also gives you a stronger foundation for workflows and apps.

How SharePoint Controls Access

Permissions control who can access a SharePoint site and what they can do there. SharePoint usually uses three main groups:

• Owners can manage the site, settings, and permissions
• Members can add, edit, and delete content
• Visitors can view content without changing it

For the Spring Campaign site, I would make the project managers site owners, the marketing team members, and leadership visitors.

SharePoint uses permission inheritance, which means libraries, lists, folders, and files normally inherit permissions from the site. This keeps access simple and predictable.

You can break inheritance when you have a genuine exception. For example, the campaign contract library may need access only for project managers and finance. However, do not break permissions for every folder or document. That approach becomes difficult to audit and support.

If you need to review access before sharing a site, follow these steps to check site permissions in SharePoint Online.

How SharePoint Connects With Microsoft 365

SharePoint becomes more valuable when you connect it to the tools your team already uses.

SharePoint and Microsoft Teams

When you create a team in Microsoft Teams, Microsoft creates a connected SharePoint site in the background. The Files tab in a Teams channel shows documents from the corresponding SharePoint document library.

This setup works well because Teams handles conversations and meetings, while SharePoint handles the documents, pages, lists, and long-term structure.

SharePoint and Power Automate

Power Automate lets you build workflows that respond to SharePoint activity.

For example, your team can create a flow that:

1. Starts when a new Campaign Issues item is created.
2. Sends an email or Teams notification to the assigned person.
3. Reminds them before the due date.
4. Updates the issue status when they complete the work.

You can also send reminders from tracked data. This walkthrough on sending email reminders from a SharePoint list is a practical next step.

SharePoint and Power Apps

Power Apps lets you create a more tailored form or mobile-friendly app on top of a SharePoint list.

For example, field staff could report campaign display issues from a phone. Instead of opening a standard SharePoint form, they use a Power Apps form with dropdowns, photos, and a clean layout. You can create a canvas app from a SharePoint list when the standard list form no longer meets the team’s needs.

Things to Keep in Mind

• Keep site purposes clear: Create a site for a defined team, project, or communication need. Avoid creating sites without an owner or business purpose.
• Use groups, not individual permissions: Add people through Owners, Members, and Visitors groups whenever possible. It makes access changes much easier later.
• Avoid excessive unique permissions: Breaking permission inheritance on many files and folders creates support problems and security confusion.
• Prefer metadata and views: Use columns and saved views to organize growing libraries instead of building many nested folders.
• Plan for lifecycle: Decide who owns the site, when content should archive, and what should happen when the project ends.
• Review sharing carefully: External sharing can help vendors and clients collaborate, but site owners should understand exactly what they share and with whom.

Frequently Asked Questions

SharePoint gives teams a practical way to centralize documents, manage structured information, control access, and collaborate across Microsoft 365. Start with a simple site and one list or library, then add views, permissions, and automation once people are using it. I hope you found this article helpful.

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