The Top 3 CRM Center of Excellence Models

How Each Increases CRM Software Adoption, Utilization and ROI


  • CRM Centers of Excellence orchestrate scarce and high-demand skills to be shared across the company. The intent is to centralize to scale and achieve a force multiplier performance effect by fully leveraging technology strategies, best practices, and software capabilities throughout the organization.
  • The goal is is to surpass ordinary standards and achieve extraordinary CRM results. Many times, that means driving operational performance beyond the norm to Best-in-Class levels.
  • These centers focus on the most significant customer and revenue opportunities. Research shows that when certain operating models are correctly implemented, CRM software ROI increases by double digits.
Johnny Grow Revenue Growth Consulting

Many business leaders seeking wide scale Customer Relationship Management software adoption and technology ROI ask, "What is the best operating model?" To answer that question it's helpful to recognize that the best model is based on your CRM maturity. And as the CRM Center of Excellence Maturity Model shows, that shifts over time.

There are many CRM Center of Excellence (CoE) operating models. But the research results show that the Best-in-Class leaders adopt three models in a progressive sequence where each shift delivers higher user adoption, software utilization and technology ROI.

The Top 3 CoE Operating Models

In fact, your choice in an organizational model will determine the depth of your CRM software utilization, the extent of your performance outcomes and your software ROI.

The organization model defines how staffing is virtually or physically organized to deliver services and knowledge to users across all business units or locations.

There are many CoE operating models but the three most popular are centralized, hybrid and federated.

Center of Excellence Operating Models

In each of the above illustrations, CoEs operate to support business units, lines of business, operational groups or geographical locations. In this article, I'll use the term business units generically.

See the top 3 CRM Center of Excellence operating models with their advantages and disadvantages.

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Centralized CoE

This model uses a central corporate team to serve all business units.

Its goal is the efficient delivery of CRM software capabilities across the organization. Because of the focus on efficiency and cost savings, it is sometimes called a shared services model.

This model is common for new CoEs and with companies that have centralized operating cultures.

Centralized Center of Excellence

There are several critical success factors for this model to work.

First, the centralized team must have a good rapport with the business units, surface their most important needs and develop relationships that drive trust. Blindly delivering what the centralized team believes are important application capabilities is likely to miss the mark. So, a periodic meeting cadence that prioritizes objectives and verifies prior deliveries have made users' lives better is essential.

It's also important that the centralized team acquire a deep understanding of each business units performance measures. Otherwise, the team risks delivering low value solutions that will be perceived as trivial or irrelevant.

The research finds that 70 percent of centralized teams believe they deliver high-value CRM capabilities while only 19 percent of business units agree. Resolving this disconnect is a prerequisite for the CoE to be successful.

Benefits of this model including the following:

  • It can be an effective starting point while the CoE acquires its resources and skills and develops its mission, purpose, and procedures
  • It is a low cost, highly scalable model
  • It often operates as a project-based service, and therefore can take responsibility for complex or high-risk projects
  • It can be a good fit for companies with other highly centralized shared services and a centralized operating culture

Challenges for this model include the following:

  • Compared to the other models, it is not as effective at increasing application utilization or achieving customer and business outcomes
  • As mentioned in the prior section, this model is often a project-based service; that puts the CoE in a reactionary posture and fails to drive continuous CRM software advancements
  • Unless proactively managed, this model has a reputation to be viewed as bureaucratic and out of touch by the business units
  • This is seldom to never the preferred choice of the business units as they believe centralized services are generic and not meaningful to what's most important to them
  • Because one team is serving many business units, the team will struggle to gain deep business knowledge for each of the business units
  • When business units believe they are not being well served by the centralized team, they seek help from outside CRM consultants using their own funds and increasing overall cost to the company
  • There's often a discrepancy in the mission; the company desires a centralized team for efficiency and to save money while business units are more interested in effectiveness and achieving business outcomes
  • While a centralized team can deliver customer insights, best practices and system advice to business units, the lack of connection and personalization often results in those recommendations incurring little to no action. And when recommended actions fail to gain adoption, there is little consistency among business units

Hybrid CoE

The CoE research found that 84 percent of Best-in-Class leaders operated a hybrid CoE. However, it was almost always as a transition to get to the ultimate goal of a federated model.

A hybrid model is a mix of the centralized and federated models.

It provides centralized governance but decentralizes some or all operational execution among the business units.

Hybrid Center of Excellence Model

For this model to work, the CoE must be mature enough to interact with decentralized operators working as a single team. That means the central team members must provide foundational services, such as governance, architecture designs, company guidelines and operating guardrails, while the decentralized units must be instructed or trained to correctly use those services.


  • Creating multiple teams across the company allows you to get closer to what's most important for each business unit and their customers
  • This model can accelerate scale among the operating units; many times, these teams split and grow in a cellular evolution
  • Business units prioritize their own demand, which increases relevance and focus for CRM software in their organizations
  • Business outcomes and financial measures improve because local operators assume ownership and accountability


  • It is challenging to implement standardized processes when multiple operating units are doing their own things; many times, business units view standards as constraints that negatively impact their technology objectives
  • It can be difficult to implement application changes or strategic initiatives such as business transformation with this model
  • Without a clear process for harvesting assets and knowledge and making them easily accessible to other groups, it is difficult for decentralized operators to repurpose prior work

Federated CoE

The federated model is sometimes called a hub and spoke operation.

The central piece of the model continues to provide governance and foundational services while the business units operate their own CoEs. This approach grows CRM expertise throughout the company.

It's a more decentralized operating model so is well suited for companies with decentralized company cultures or for less regulated industries. This model is extremely common with global companies that have many geographical locations or diverse lines of business.

The central organization sets technology direction, architects software standards, harvests knowledge and cross-pollinates insights, lessons, ideas, assets and successes.

The business units are responsible for defining their structures, establishing priorities, and implementing advanced CRM capabilities.

As the business units assume more control, the central team assumes a portfolio management role whereby they track objectives and monitor performance to assure alignment and know when to intervene with course corrections or offer skilled resources, best practices, or recommendations.

When the company becomes fully federated, the central team orchestrates key CRM strategies that support the company's business priorities. The decentralized teams align and support those strategies within their own operations.

There are a few critical success factors for this model to do well.

Local execution will aid speed for each business unit but if not properly integrated with the central team, it can reduce the overall pace for the company.

Similarly, if this model is adopted too quickly, and before a mature centralized CoE is established, the business units will operate independently and without standards. The company will fail to gain consistency and synergy in a shared CRM platform. Essential goals such as data sharing, end to end process automation and consolidated reporting will become very difficult, and very expensive.

Federated Center of Excellence Model


  • The biggest upside is improved customer and business outcomes for the business units; this stems from resources within those units taking increased ownership for business unit priorities
  • Because the business units control the resources, they have more flexibility to redirect staff toward a sudden problem, a big opportunity, a change in the business or a market movement; and because those resources have a deeper understanding of their business units, their transition or onboarding time is minimized
  • A local team has a better understanding and visibility of its customers, and can therefore better design CRM software and processes to solve for the customer, satisfy the customer and build better customer relationships
  • When the system is adapted into everyday processes, CRM objectives become everyday occurrences
  • It's a best of both worlds model that drives strategic advancements from a centralized team and local objectives for business units


  • The single biggest downside is the high cost of operation, however, when considered with the improved business outcomes the cost is absorbed in the increased financial results
  • Costs become exacerbated with staff turnover. CoE staff have specialized skills that make them difficult to find and expensive to hire so churn will lead to significant slowdowns, bottlenecks and hiring expenses. Active employee coaching, clear career path planning and retention factors such as periodic training, task diversity, frequent performance reviews and mentorship are essential
  • Unless mitigated with a central strategy, business units will manage customer-siloed views and track different performance metrics, making enterprise-wide reporting difficult
  • Similar to the above, without clear guidelines, business units may implement different methods to perform the same processes; in addition to the redundancy this will create inconsistencies with customers
  • Initial scalability occurs more slowly as multiple business units evolve in parallel; however, as they mature the scalability can outpace other models
  • Business units don't like to be constrained so it can be difficult to set standards, impose guardrails, enforce guidelines and ensure consistent operation across the company


Be clear that each of the models define a way of working, not just an org chart.

And each of the models bring different responses to the most important objectives, as shown below.

Center of Excellence Operating Model Comparison