Microsoft 365 | Power Apps | Power Platform

Folder structures feel intuitive.
They mirror the way physical filing cabinets worked for decades, and for small teams with limited content, they often seem “good enough.”

The problem is that what works for a handful of users and a few hundred documents does not scale to a modern digital workplace. As organisations grow, collaborate more broadly, and introduce governance and compliance requirements, folder-based thinking quickly becomes a bottleneck rather than a solution.

In SharePoint and Microsoft 365, folders are rarely the root cause of poor document management — but they are very often the visible symptom of it.

Why Folder Structures Break Down

Folders are built on a simple assumption: that content has a single, logical place where it belongs. One department, one project, one owner, one path.

In reality, documents rarely behave that neatly. Policies are referenced across departments, procedures evolve over time, and project documents are reused long after the project has finished. The moment content needs to exist in more than one context, folders start to struggle.

To compensate, teams create deeper and deeper folder structures, attempting to encode meaning into the path itself. What starts as a clean hierarchy slowly becomes difficult to navigate, hard to explain, and even harder to maintain.

The Hidden Costs of Folder-Based Design

As folder structures grow, usability degrades. Users stop browsing and start guessing. When they can’t find what they need quickly, they download files locally, create copies, or ask colleagues for help. At that point, version control begins to unravel.

Permissions compound the problem. Folder-level permissions might appear flexible at first, but they quickly become opaque. Inheritance breaks, access becomes inconsistent, and auditing who can see what turns into a manual exercise. IT teams often inherit ongoing access management tasks that were never meant to be operational work.

Search also suffers. Search engines rely on context and metadata, not folder depth. When the only clues about a document’s purpose are buried in its path or filename, search results become unreliable. Users lose trust and revert to old habits.

Compliance is often where folders finally fail outright. Retention, review cycles, and audit requirements depend on attributes such as document type, status, ownership, and lifecycle stage. Folders cannot reliably represent these dimensions without becoming unmanageable.

Why Metadata Scales Where Folders Don’t

Metadata-based design flips the model. Instead of forcing content into a single location, documents are described by what they are, not where they live.

A document can simultaneously be:

• A policy
• Owned by HR
• Approved
• Due for review
• Applicable across multiple teams

Metadata allows all of these attributes to exist without duplication or complex folder gymnastics. Views can then surface the same document in different contexts without moving or copying it.

This approach aligns with how SharePoint is designed to work. Search, retention, automation, and governance features all assume that content is classified, not hidden inside a path.

A Practical Example: Controlled Documents

In a controlled document library, folders often appear attractive because they look tidy at first. Policies go in one folder, procedures in another, templates somewhere else.

Over time, however, status, ownership, and review cycles matter far more than physical location. An approved policy and a draft policy might sit in the same folder but require entirely different handling.

With metadata, those distinctions become explicit. Views can surface approved documents for general users, drafts for authors, and upcoming reviews for document owners — all from the same library, without duplication or confusion.

Addressing the “Users Prefer Folders” Argument

It’s true that many users are familiar with folders. What they actually prefer, however, is finding what they need quickly and confidently.

When metadata is implemented sensibly — with good defaults, minimal mandatory fields, and clear views — users adapt faster than expected. The moment search starts returning reliable results and documents stop being duplicated, resistance tends to fade.

The goal is not to eliminate folders entirely, but to stop using them as the primary organisational mechanism.

Where Folders Still Have a Place

Folders can still be useful in limited scenarios. Temporary working areas, bulk migration staging, or very short-lived project structures can benefit from light folder use.

The key distinction is that folders should support the process, not define it. Once folders become the backbone of governance, discoverability, or compliance, problems are inevitable.

Final Thought

Folder structures solve yesterday’s problems.
Modern collaboration, governance, and compliance require a different approach.

Metadata does not need to be complex to be effective. When designed intentionally, it simplifies access, strengthens governance, and allows SharePoint to do what it was built to do.

If your document library feels chaotic or hard to manage, the issue is rarely the platform. More often, it’s the structure sitting on top of it.