There's no denying that working remotely provides tremendous benefits, but more organizations are finding that virtual collaboration also comes with significant limitations.

By Katherine Reynolds Lewis, contributor

FORTUNE – Once a year, leaders of Community Options come together from its 35 locations for a retreat. The nonprofit organization runs a variety of entrepreneurial ventures that create job opportunities and provide housing for people with disabilities.

At the most recent summit, the chief financial officer was bemoaning the wasted flowers at the organization's New Brunswick, N.J. floral store, due to the inevitable difficulty in managing inventory to meet customer orders.

Listening in, a graphic designer from Community Options' Daily Plan It, which rents shared office space and provides support services such as document shredding, thought they could use the dead, unsold flowers to create potpourri. As a result, Community Options is now launching a line of potpourri, which will be packaged and sold by people with disabilities.

"It's all because a group of people got together and came up with this idea," says Robert Stack, founder and chief executive of Princeton, N.J.-based Community Options. "People play off each other."

In a world of video conferencing, cloud computing, and shared online workspaces, it's easy to imagine that people can work together from anywhere, just as if they were sitting in the cubicle next door.

It's true that telework reduces pollution, improves productivity, and cuts real estate costs for employers while increasing retention and employee loyalty. But no matter how advanced the technology, something is lost when face-to-face contact disappears.

Indeed, a new report found that the number of teleworkers declined in 2010 for the first time since data collection began nearly a decade ago. While there's no denying that telecommuting can provide tremendous benefits, organizations are finding that virtual collaboration has its limits. More