Choosing the Right CRM Strategy: Consolidated vs. Multi-CRM for Enterprises

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Many companies are split on the best customer relationship management strategy —implementing a multi-CRM approach with specialized tools for various teams or consolidating and streamlining with a single CRM platform.

Each strategy has advantages and disadvantages that are quite evident. It takes careful consideration of requirements for customer data, team workflows, IT resources, budget, and business goals to choose the best approach. The main factors to be considered by companies deciding between a multi-CRM and consolidated strategy are examined in this article.

Definition of CRM

Software for customer relationship management, or CRM, enables companies to control their contacts and relationships with clients and prospects. Improving business relationships is the main objective of a CRM system to promote profitability, customer retention, and increase sales. CRM systems combine documents and customer information into a single database so that departments including marketing, sales, and customer service may easily access and work together. Businesses can then offer each customer touchpoint a consistent and customized experience.

Benefits of Consolidated CRM

A consolidated CRM strategy relies on a single CRM system used across the enterprise. This approach offers several key benefits:

  • Single view of the customer – With all customer data and interactions fed into one CRM, teams get a holistic 360-degree view of each customer. This avoids the fragmentation that comes with multiple separate systems.
  • Easier to manage – IT and administrators only need to manage one CRM system. This reduces overhead costs and complexity compared to managing connections across multiple platforms.
  • Improved data accuracy – There is a single source of truth for customer data. This avoids inconsistencies and duplication issues that can occur with separate systems.
  • Better analytics – Insights and reporting are stronger when all data resides in a single CRM. This enables more impactful data-driven decision-making.
  • Lower costs – Operating one CRM system reduces software, hardware, integration, and management expenses.

Challenges of Consolidated CRM

A consolidated CRM strategy comes with some notable challenges that enterprises should consider:

Less flexibility

With a single consolidated CRM system, organizations have less flexibility to customize different systems for specific business units or users. The CRM must be configured to work across the entire organization, which can limit the ability to optimize processes for certain teams.

Reliance on one vendor

Having all CRM data and processes within a single system creates a reliance on that one vendor. If there are issues with the vendor, it can disrupt the entire CRM strategy. There is also less leverage to negotiate with the vendor.

Slower innovation

Innovation may happen more slowly with a consolidated CRM, as there is no competition between vendors. The CRM vendor has less incentive to rapidly add new features and capabilities.

Definition of Multi-CRM

Multi-CRM refers to the use of multiple customer relationship management (CRM) systems throughout an organization, with each business unit or function having its own dedicated CRM platform. Companies employ best-of-breed CRMs for sales, marketing, customer service, etc. instead of combining them into a single system utilized throughout the entire organization. Should the company need change, this approach offers the flexibility to add or eliminate CRMs. However, a single customer view across systems requires strong data integration.

Benefits of Multi-CRM

Choosing customized CRM systems catered to the requirements of departments, business units, or regions is made easier for organizations with a multi-CRM strategy. Multi-CRM allows businesses to deploy various best-of-breed CRM systems from multiple suppliers throughout the company. This lets every department choose the system that most closely matches their needs, procedures, and preferences.

A multi-CRM model has several benefits, foremost among them the promotion of CRM vendor innovation and competition. Departments have system options; therefore, suppliers must keep improving their products to satisfy the unique requirements of various client groups. There is less of a push for the vendor to improve capabilities over time with a combined single-vendor approach.

Better CRM acceptance throughout the company is made possible by the flexibility of multi-CRM. Departments are more inclined to use the CRM when they can select a customized system that fits in nicely with current procedures. Comparing this to imposing a one-size-fits-all system that might not be optimized for every business unit, user satisfaction, and productivity gains can rise. Higher adoption rates allow the company to optimize return on CRM expenditures.

Challenges of Multi-CRM

Adopting a multi-CRM strategy comes with some notable challenges that enterprises should be aware of before implementation.

Data Silos

A key downside of multi-CRM is that it can lead to data silos across the different systems. When customer data is fragmented across various CRM platforms, it becomes difficult to get a unified 360-degree view of the customer. Important information like contact details, purchase history, support tickets, and more end up trapped in separate systems. This makes it extremely challenging to get a holistic picture of customer interactions and sentiment.

Integration Issues

Related to data silos is the issue of systems integration. When customer data resides in multiple CRM systems, connecting everything through APIs and ensuring seamless data flows can be an uphill battle. IT teams must put in effort to integrate the disparate systems and avoid disjointed workflows. Real-time data synchronization can also become problematic.

Higher Costs

There are larger costs involved with purchasing and maintaining multiple CRM solutions. The expenses include license fees for different platforms, integration costs, and the need for more IT resources to manage the complex environment. While it may seem cheaper upfront to buy specialized CRMs, the long-term TCO can end up being higher than a consolidated CRM approach.

Key Factors to Consider

When evaluating whether to adopt a consolidated or multi-CRM strategy, there are several key factors that enterprises should consider:

Company Size

  • Larger enterprises with thousands of employees across multiple locations may benefit more from a multi-CRM approach. This allows different divisions or geographic regions to choose a CRM that fits their specific needs.
  • Smaller companies are often better served by a consolidated CRM platform that covers sales, marketing, customer service, and other functions. This minimizes complexity.

Industry

  • Companies in certain highly regulated industries like financial services or healthcare may require specialized CRM solutions to meet compliance and security standards. This supports a multi-CRM model.
  • For other industries like retail or technology, an integrated CRM platform can likely meet all requirements, favoring consolidation.

Budget

  • Companies with larger budgets can afford to adopt and integrate multiple CRM solutions across business units.
  • Organizations with more limited budgets may need to standardize on a single CRM to maximize value while minimizing costs.

Existing Systems

  • If a company already has several well-established CRM systems, it may be best to maintain a multi-CRM environment and invest in improving integration.
  • Companies without existing CRM solutions or a fragmented approach can benefit from evaluating and selecting a new, consolidated enterprise-wide system.

Conclusion

Any business has to decide strategically between a consolidated CRM system and a multi-CRM strategy. Both strategies have unique benefits and drawbacks that need to be taken into account together with the needs and circumstances of the business. Success with CRM, whatever approach is selected, depends on its successful implementation and company-wide acceptance. Businesses can use CRM technology to improve customer relationships and spur expansion provided they have the appropriate approach in line with their objectives.