I have been working within the Salesforce.com ecosystem for more than 7 years. In that time, I have seen the technology grow from a CRM application targeted mostly at the SMB market to a technology platform that has gained serious credibility with some of the largest companies in the world. In my role, I have the opportunity to meet with all types of businesses about their strategy (or lack thereof) to gain efficiency by bringing solutions to “the Cloud.” I have recently been faced with a number of companies debating the question of whether it is appropriate to grow their footprint within a single instance of salesforce.com or whether to leverage multiple instances. Still other companies that have already acquired multiple instances look to consolidate into a single instance. The questions that they pose about which approach is superior presume that there is a one-size-fits-all answer. Although there is no single solution, this post will outline a set of decision criteria that should be considered.

Most CRM professionals agree that a single instance of a CRM system lowers total cost of ownership and creates efficiency in maintenance, support, and re-use. However, proponents of a multiple-instance strategy would argue that localization provides for more flexibility and more closely addresses the needs of end users. For them, the tradeoff to consolidating to a single instance is that the system becomes less useful and introduces more bureaucracy. Hmmm. Where do we go from here?

Reporting
Let’s begin with data visibility and reporting needs. If, at any point, it is going to be a requirement for senior management or someone else in the organization to do global reporting, a single instance should be considered. This type of reporting makes it easy to compare performance in various regions and evaluate variability in system adoption. By its nature, it also makes it easier to do analysis because data structures are common and the analyst can compare apples to apples. It’s true that there are alternatives to global reporting needs like an enterprise data warehouse where data is aggregated for holistic viewing, but the presents an additional challenge of marrying disparate data structures. The best approach is to establish a single source of truth that can be referenced without transformation or lag time.

Collaboration
Related to data reporting is data sharing. CRM, at its core, is about tracking and sharing information about customers. Silos between functional groups like sales, marketing, customer service and account management fundamentally kill the effectiveness of a sound CRM strategy. For this reason, if an organization has the need to share data between geographies, functional groups or process areas, then a single instance is appropriate. Collaboration is key, and if the organization is dealing with a common set of customers, they should consider leveraging a common system for sharing information. In cases where geographically segmented customer bases or business lines don’t share customers, they can autonomously operate in separate instances.
It should be noted that a Salesforce-to-Salesforce integration is an alternative to sharing information across orgs, but not a replacement for a full view of customer data.

Integration
If an organization is leveraging integration from back office or third party data sources, it will be a major factor in determining whether to go with a single or multiple instances. Integrations cost money. These costs can be attributed to the time spent developing, testing, deploying, and managing them, or in the case of third party data sources, there is a cost of obtaining connections to a metered service. In either case, it seems desirable to consolidate integrations wherever possible. Rationalization of these processes also tends to establish consistency in the output of the integrations (for example, if data as being transformed one way from the back office system to Salesforce.com instance A and transformed a different way to Salesfore.com instance B, a mismatch is created).
However, if an organization is obtaining common data elements from multiple data sources, it may be a good case to have multiple instances of Salesforce.com. To illustrate, consider a company with two divisions that operate in two different geographies. In one geography, SAP is used to manage customer financial data and in the other, a homegrown ERP system is used to manage the same information. With the back office systems separated, it is likely that there are going to be conflicts related to key customer information if we try and integrate both into the CRM tool. In this scenario, it would seem that the two geographies operate fairly independent from one another, so multiple instances of Salesforce.com might be the optimal way to go.

Process Rationalization
As mentioned earlier, proponents of the single system site operational efficiency and total cost of ownership as benefits. To dig a bit deeper into this, we need to do some detailed analysis of the process overlap between various business segments. Is there commonality? Is there synergy? Or are there direct conflicts?
With traditional CRM tools, process diversion would be a good reason to propose multiple instances, but with Salesforce.com a significant amount of localization can be accounted for within a single instance. Process reconciliation is potentially a complex and involved process because it has as much to do with managing change and changing old habits as it does evaluating real business drivers.
It is important to note the strong executive sponsorship is key to effectively prioritizing localized process support against other business drivers like globalization or cost management. Most regional business leaders are incented on the performance of their own business so conforming to a standard process (or system) for the common good is not a big motivator.

Governance
In any case where multiple business groups are operating within a single instance of CRM tool, a thorough governance strategy needs to be in place. Governance is the set of policies, roles, responsibilities, and processes that you establish in an enterprise to guide, direct, and control how the organization uses technologies to accomplish business goals. A governance steering committee should have representation from senior management, IT, Salesforce.com Administrators, and participating business units. The plan should include detailed processes for prioritizing and vetting issues that arise so that conflicts are resolved.
With a multiple-instance strategy, governance is still important, but not as critical as when competing interests are prevalent.

Administration
Administration is one of the areas often cited as being an opportunity to create efficiencies for companies considering going from multiple instances to a single instance. In most cases, each instance has one or more people responsible for administration and maintenance. When consolidation occurs, the job becomes larger because the resulting system can be more complex, but the redundancy is often eliminated. The breakeven point for what is optimal varies on a case-by-case basis.

Globalization Settings
Salesforce.com provides standard support of globalization features like multi-language and multi-currency. Consolidating multiple instances into a single instance will have an impact on users if doing so requires either of these features to be enabled. Who will be responsible for maintaining the Translation Workbench? How will currency conversions be managed?

Governor Limits
Some Salesforce.com governor limits are set based on the number licensed users in an instance (e.g. API calls per day). This can be a consideration in cases where multiple instances that are heavily customized or are running integrations that require API calls.

Edition Constraints
For organizations looking to consolidate orgs, the Salesforce.com Edition of each candidate org should be evaluated. In every case I have seen, it is advisable to consolidate into the highest-level edition of the candidate orgs. For example, if looking to consolidate a Professional Edition and an Enterprise Edition org, it should be done using the Enterprise level instance at a minimum. It may be required to move to Unlimited Edition if the joining of the two orgs would exceed certain limits imposed by Enterprise Edition.

In evaluating your organizations optimal endpoint, these are some of the factors that should be evaluated and prioritized. The analysis needs to be thorough and balanced to ensure that the opportunity cost for each decision is well understood and documented.

The successful strategy for CRM implementation in your organization needs to be well thought out and aligned to your culture, business needs and problems. However, there is significant value to examining what has worked (and not worked) for others that have blazed this trail before you. This two-part post will address some of the guiding principles and success factors that you can use within your own organization if you are looking to implement some aspect of CRM or if you are finding a need to re-implement CRM after a failed effort.

First, I think it is helpful to establish that CRM is not software. Instead, it is a mindset and a culture that is reinforced by a set of defined business processes while being enforced, automated, and supported by software. This definition lends some comfort in knowing that the major hurdles are not technical, however, one must come to terms with the fact that leading people-change is much more difficult than building technology.

Affecting real change in people requires an understanding of what motivates them. Whether it is opportunity for advancement, meaningful work, money, power, or any other factor that motivates people, we must find a way to tap into those things for change to persist. For the purposes of this discussion, we will assume that money and the ability to close more deals are the key motivators of a sales force. Sales people are generally thought to be “coin operated” in terms of their motivations so the validity of this assumption should hold up.

Allowing sales people to make more money means that they need to close more deals, and your CRM program should be designed to allow them to do so. If the sales organization is convinced that this is the case, they will advocate the system, comply with the processes and show the results that align with your business goals. Simple, right? Well, although this is the logic, I think that a bit more exploration of the specific of “How” CRM will accomplish these goals is in order. After this discussion, you should feel comfortable answering the question “What’s in it for me?” The answers will help to refine your strategy to prevent your CRM implementation from simply being a scoreboard that allows management to see that is something happened, and instead become a tool that the sales organization uses as a tool to score (close deals).

Spend more time selling
The number one concern that I hear from sale people faced with using a new CRM system is that the overhead that comes from managing their work within a system is going to take away from the time they spend in front of customers. In fact, this should be one of the primary benefits of CRM to the end user. The “Automation” aspect of Sales Force Automation (SFA) is the foundation of any CRM tool. Sales people will have the ability to generate sales letters, access marketing collateral, RFP responses, product info, presentations, demos, and a host of other information at the click of a button. Without a tool in place and processes to support it, they are likely spending countless hours manually generating these outcomes or digging in multiple sources in an attempt to locate them.

Process guide/best practice deployment
A customized selling process needs to be defined from the bottom up and then the top down (not the reverse). The rainmakers in your organization are uniquely qualified to help define best practice and the CRM system will facilitate the deployment of those practices. Those in the sales organization who help to define the process by which the company will drive sales are often invigorated by the opportunity to have such an impact that the lesser performing folks have difficulty arguing with results. Furthermore, the CRM system will offer the ability to institutionalize best practice and centrally manage its effectiveness. When the time comes for a change, that change can be managed centrally as well.

Establish link between sales and marketing
Believe it or not, many organizations struggle to establish a synergy between the marketing and sales functions. If you are nodding your head, read on. Marketing should be seen as an ally to Sales because lead generation fuels opportunities for new deals. However, Sales is often frustrated by the unqualified leads that get passed on from marketing and reacts by dismissing the validity of those leads. In reverse, Marketing is frustrated by their inability to demonstrate their effectiveness because the Sales organization is not following up on the leads that they generate.

CRM can help bring science to this issue by introducing lead scoring and lead qualification criteria that leverage empirical data to support their effectiveness. The result is better leads that increase the potential for a sale. For the salesperson, the odds go up, and they find themselves working smarter rather than harder to bring in a new customer.