The following article is based on a newly migrated Exchange 2007 user to Exchange 2010 with an Active Microsoft CRM 4.0 service synchronized  to Outlook. Once the upgrade migration, of the Exchange Service, was complete, Outlook contacts synchronized with Microsoft CRM no longer connected properly to parent accounts using previously synchronized Outlook contacts. 

By design, The Microsoft CRM for Outlook tool does not synchronize duplicated contacts. This can be confirmed by selecting the CRM drop down menu, with in Outlook, then Selecting Options. Under Synchronization you will see you can set the plug in to allow duplications. Allowing the tool to accept duplicates will duplicate every contact associated with Microsoft CRM and tag it accordingly.

Since there is no automatic method, the below manual processes may resolve the contact synchronization issue. However, This solution is only valid if contacts are duplicated and only one contact is synchronized to Outlook.

This process gets rid of the duplicate and alerts other users, who have been synchronizing to Contacts, about the merged contact. The process shows a contact record as inactive, and lets everyone know that the contact, in Microsoft CRM, requires a new synchronization to be performed to their Outlook.

1) Find the duplicate contact records, by performing a contact search.

2) Update one duplicate to include "Inactive in CRM" within the last name. (Example: If the contact name is John Smith, update the name to John Smith Inactive in CRM).

3) Then go into Microsoft CRM and merge the contact records. When doing so, make sure the contacts last name, you updated to, includes "Inactive in CRM" as the one that gets deactivated. This can be performed by the tenant admin.

4) Then set up your Local CRM to Outlook plug-in to bring down the remaining contacts to your Outlook.

5) Have users 'Delete' any contacts that have "Inactive in CRM" in the last name from their Outlook and find the correct contact to synchronize in CRM. Reason for this is because the old contact is now Inactive in CRM.