To support team and project work, internet-based collaborative applications are increasingly being used. They enable employees located within and outside of the organisation to communicate, share knowledge/data, and organise joint projects. These knowledge-based drivers of collaboration between team members can improve mastering dynamic and complex situations – key for small and medium-sized enterprises (SMEs) in today’s turbulent business environments. Supporting collaboration by providing technical (software, hardware) and structural (methods, strategy) resources confronts organisations with management and work design challenges. We explain the role of an integrated work design concept that enables SMEs to implement and manage the application of collaborative software. This concept combines measures of human resource management and work design practices with a socio-technical perspective. We conducted a thorough analysis of the status of today’s use of collaboration software in SMEs. Drawing from our survey of 101 SMEs in Germany and empirical insights from qualitative interviews with experts from three SMEs in different industries, we describe the measures and activities companies have put into practice in order to support collaboration of and between their teams. A socio- technical work design concept is then presented. To date, there are very few published empirical findings about the experience of SMEs using digital transformation, particularly their deployment of collaboration software. We outline the socio-technical system design approach available for practitioners attempting to design collaborative work in SMEs using internet-based collaboration tools. This gives practitioners in SMEs a helpful, clear orientation on how to combine the design of information systems and work systems with human resource management and organisational development practices. This study provides valuable information to managers and practitioners in IT and work design of SMEs, helping them to execute a more effective implementation and application of collaborative software possible. The design model describes twelve design dimensions on three levels that can be used by practitioners to transform their organisations to a new way of collaborating, sharing knowledge and supporting team and project work in SMEs.