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We (IT team) store general user manual about software system as word doc in folders on SharePoint. Other teams across business adopted the guides to their own business processes and store them only within their own departments. What would be the best way to manage user documentation? Does it make sense for IT department to create one all inclusive guide accessible to all within the business? What would be the best way so that the guides are user friendly and easy to find information? Currently every separate task of the system is documented in separated word doc stored in folders depending on the topic. Would web-page based guides be a way forward or there are other solutions?

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    This isn't really a UX issue, more information management. There are many different structures, processes and tools that can come into play here. The best I've ever seen was a wiki in place at a startup I worked at but we were only around 100 people and had one guy who really championed updating the wiki and reviewing edits. Another great solution I've seen was at a smaller web shop we had a user guide rolled into the back end of our CMS that we could just push updates to clients sites as we made them. IMO this could be an IT task if you're passionate about maintaining it.
    – It's Dylan
    Commented Mar 11, 2020 at 16:31
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    Thank you for your comment! I put UX as every team within business said they want user friendly solution with easy navigation and search option. 'User guide rolled into the back end of our CMS'- I never heard of this, would it work with the SharePoint? Another option we consider is creating the guide as a web site. Would it be a viable option too?
    – Kat
    Commented Mar 12, 2020 at 15:04
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    I don't know SharePoint too well & have only ever used it as an intranet but I assume it's possible. Especially if you're distributing internally for different depts to access & pass onto customer. Web based user-guides are def an option too! The only reason I wanted to differentiate this from UX is ideally a UXer would be fairly agnostic to the process & tools used to manage this internally. However what info is in the guide & how it's presented could use some UX direction. I've seen some documentation that's 1000x more painful than just figuring out the system with no direction ;)
    – It's Dylan
    Commented Mar 12, 2020 at 18:35

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You need to be guided by the users when it comes to creating documentation for software applications. But it is also important to consider the user experience for the people (probably technical writers) that have to create and maintain the content.

There are two types of documentation that are often produced, the first of which is purely content based that documents the various functions and features, and this is the standard content for most documentations. Then there is also a knowledgebase of information that is contributed by users, which can include common issues or workarounds for various goals or tasks that the users want to perform.

If you consider the need to centralize the resources and be able to maintain it easily, then a web-based option compared to a document based option is going to be easier. Start with some of the common platforms like Confluence or other types of knowledge management systems and work out what your requirements are, and combine this with some thorough analysis to come up with an information architecture that you can implement and produce content with.

Treat it like a UX research and design project in its own right and you should get close to what your users need.

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