SouthTrust Bank : Virtual PBX Created by Cisco IP Communications Solutions Yields Millions in Cost Savings, Platform for Growth, and User Satisfaction

As one of America's top 100 financial institutions, SouthTrust Bank has definitely shown that they are indeed "not just another bank."

With more than US$51 billion in assets and roots in its home city of Birmingham, Alabama, that date back to 1887, SouthTrust stands apart from its competition. Its strong regional position-attributed to steady internal growth and a series of successful acquisitions- extends to nine Southern states and it is a member of both the Fortune 500 and the Forbes Platinum 400. The bank places the highest priority on delivering superior customer service, and in 2000, Consumer Reports rated SouthTrust second in customer satisfaction, nationwide. That same year, SouthTrust made a strategic business decision that also supported its unique vision and leadership. It decided to replace its aging and patchwork TDM (time-division multiplexing) voice-services infrastructure with a new environment based on IP communications.

At the time, SouthTrust had more than 12,000 employees, 700 branch locations, and a commitment to continued growth, both through opening new branches and acquiring or merging with other banks. Moving voice services to an IP network in 2000 was a "bet your business" decision. Financial services institutions have an acute dependence on voice systems as a critical means of customer and internal communications. The bank's 700-plus branches and ATMs reached across Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, and Texas, and it was on the verge of expanding into Virginia. As a result, SouthTrust was providing voice services to 10,000 telephones.

This meant that SouthTrust was contemplating one of the largest ultisite IP telephony projects ever deployed. A successful deployment would help to ensure that SouthTrust could meet its strategic business goals by providing a technology platform that would help it control costs, maintain superior customer service, and develop next-generation IP-enabled voice and converged applications. Before this could be achieved, however, SouthTrust-with the help of Cisco Systems® and its partner companies-needed to overcome challenges unique to such a large deployment. The project would be a pioneer in proof of concepts, development of IP-networking technology, and establishment of best practices that would help advance understanding about the then emerging field of IP telephony.

CHALLENGES
To continue to provide the highest levels of customer service, and to efficiently assimilate the employees of its acquired banks into a collaborative workforce, SouthTrust could not tolerate any disruption or degradation of its voice services. Many of the sites to be converted to IP telephony had significant user populations; 650 sites were identified as medium to large in size. Geographically, the SouthTrust franchise-headquartered in Birmingham-spread across nine southern states, stretching west to Texas, south to Florida, and, with the 2001 acquisition of CENIT bank, north to Virginia.

By 2000, the bank faced the necessity of upgrading and replacing its traditional voice networks and equipment. The bank's existing telephony environment-comprising multiple disparate, heterogeneous environments, including key systems, private branch exchanges (PBXs), and Centrex systems maintained by multiple vendors under separate contracts-burdened SouthTrust with high maintenance costs, deteriorating service quality, and a limited or no growth path for future applications. It also needed to upgrade its low-bandwidth Frame Relay-based data network that handled data traffic to support new business applications such as Microsoft Windows 2000, branch technology upgrades, and a new loan approval system.

Initially, SouthTrust explored separate upgrades of its voice and data networks, evaluating voice system offerings from Avaya, Nortel, and Cisco®. It ultimately chose to replace its hardware-based PBX voice systems with a software-based open architecture and IP Communications solutions from Cisco." We realized that our business model would not flourish in the closed environment of a hardware-based PBX solution," says Stan Adams, the group vice president of network services for SouthTrust. "A PBX-driven solution would limit our future applications options and extend our equipment depreciation period. We also believed that Cisco was becoming the de facto industry-standard and offered the greatest flexibility for the future."

At the outset of the project, SouthTrust and Cisco devised a pilot deployment of converged, IP-delivered services in three Birmingham-area sites. The pilot revealed that the economics, reliability, and better-than-expected efficiency gains would justify moving from separate voice and data IP networks to an integrated environment with one high-performance infrastructure supporting both voice and data requirements. The bank's objectives in deploying a single, centrally managed network were to enhance control over communications resources, leverage economies of scale, and provide a foundation on which new business applications and services would be built. For voice services, the IP network would dramatically simplify moves, adds, and changes, and save on long-distance and conference call charges, while maintaining optimum communications capabilities.

" We had reached a transition point," Adams says. "We needed to significantly upgrade both the voice and data networks. But, for us, a data network upgrade on its own represented all cost and no savings. We saw IP telephony not as a toy to play with, but as a business enabler that would provide payback for our investment in the network." Says Carl Owen, SouthTrust's senior vice president of distributed computing, "Typically, you would expect the notion of a converged network to be driven from the data IT department, but, in our case, it was the voice team that spearheaded this initiative from the outset."

SOLUTION
The SouthTrust IP Communications project was an extremely demanding deployment, divided into multiple phases. The main phase of the project, completed over a two-year period, saw 654 branches, 3 data centers, and 2 corporate office buildings converted to Cisco IP Communications solutions. More than 80 new locations and acquisitions were converted in conjunction with the scheduled project during the same period. By the end of 2003, 790 SouthTrust sites will have IP Communications capabilities, and more than 10,000 Cisco IP phones will be online. PBXs are being replaced by Cisco IP Communications solutions over time as users migrate to IP telephony.
Two Cisco Premier Certified Partners, DataTec Systems Inc. (www.datatec.com) and Vista Information Technologies Inc. (www.vistait.com), played central roles in the SouthTrust implementation. Vista Information Technologies managed partner activities, installation, configuration, and testing of the headquarters-managed systems, including Cisco CallManager software and banking application servers. DataTec Systems was responsible for deploying voice and data at the remote sites. To speed implementation time, DataTec preconfigured Cisco 7960 IP Phone sets before their delivery and installation in SouthTrust branches. DataTec's e-Deploytool performed inventories of voice and data assets, including cable drops, at each branch.
Cisco Professional Services managed the business partner relationships and coordinated the implementation schedule, holding weekly meetings to work through technical issues and clear roadblocks. SouthTrust executives also held regular meetings with Cisco, Vista Information Technologies, DataTec, and AT&T managers to discuss business issues such as operational costs, personnel issues, and realigning project expectations. User migration occurred in a multiple-step process. Routers and switches that were already in place for SouthTrust's data network were upgraded at each target branch. DataTec Systems initiated site surveys for each branch; these surveys located every telephone and specified running new cabling where required. DataTec also notified staff of the pending change and began training programs. The IP telephony system was set up in parallel to the existing time-division multiplexing (TDM) system. Every existing telephone number was ported to new a direct inward dialing (DID) number with automatic call-forwarding capabilities to help ensure a smooth transition.

The cutovers occurred at night, with technical support staff establishing connectivity from the new system to the carrier's central office, to make sure that each Cisco IP phone had dial tone and all applications were running. After the transition was complete, any residual problems or issues were resolved; then, the old PBX and legacy equipment was disconnected, decommissioned, and removed from the premises. Over the course of the project, DataTec Systems and Vista Information Technologies effectively increased productivity from 5 to 15 voice and data cutovers per night. Outsourcing to deployment partners-rather than using in-house SouthTrust resources-also reduced the labor required to implement the network by 60 percent." It was a learning process for all of us-it hasn't always been roses-but Cisco's support has been very good," Adams says. "We pushed the envelope as far as we could push it. We were doing things that could not have been replicated in a lab-and we persevered and learned many things."

SouthTrust's core network includes five Cisco CallManager call-processing clusters that serve the regional branch network and three Cisco CallManager clusters that support SouthTrust's largest office campuses. Cisco Unity™ servers provide each cluster with voice messaging, including automated attendant and night messaging. The Cisco CallManager servers form a single virtual PBX with centralized administration, common feature sets, and dialing plans. On-net voice traffic is carried via voice over IP (VoIP), while local off-net traffic is provided through integrated access from the branches; long distance off-net traffic is backhauled via VoIP to centralized Public Switched Telephone Network (PSTN) gateways at the headquarters location. The core network also includes quality of service (QoS) for voice traffic, Cisco 7200 Series VXR routers at the bank's headquarters, and Cisco Catalyst® 6500 Series switches.

The remote network includes Cisco 2650 routers at branch locations, Cisco IP phones (primarily consisting of the Cisco IP Phone 7960), Cisco Catalyst voice gateways and LAN switches, and Cisco Voice Gateways 200s and 2600s. In addition, the Cisco Survivable Remote Site Telephony (SRST) feature in the Cisco IOS® Software is deployed on the routers for survivability of the remote sites, and complete disaster recovery plans, equipment, and policies are in place at the remote locations. The new Cisco IP Communications system coexists with traditional TDM equipment still in place at several SouthTrust sites. A T1 circuit to the bank's Birmingham central site maintains connectivity to existing PBXs and phones, with Cisco voice gateways providing an interface to the new IP-based network. Each remaining site with traditional equipment will be converted to IP telephony over time.
The integrated Cisco IP Communications network was designed to provide future support of a number of applications, including rich media for e-learning that is stored locally, but centrally managed; multisite IP videoconferencing; unified messaging for branch personnel; and increased bandwidth to deliver rich media through ATM machines for advertising and promotions. It also will help to fulfill SouthTrust's vision of single-portal access to every customer account or service-a capability that is expected to result in better customer service and an increase in the number of products and services used per customer.

RESULTS
SouthTrust's active merger and acquisition strategy helped drive the decision to adopt IP Communications. Acquired branches were equipped with multiple disparate key and PBX systems, vendors, and maintenance and support contracts. There were inconsistent functions at end user locations and no management control. The new Cisco IP Communications system, and the knowledge gained during the conversion of more than 700 branches, is helping SouthTrust to convert and centrally manage acquisitions to support territorial expansion of the bank's franchise. The system is also centrally managed, giving SouthTrust the visibility and control to manage its asset base more efficiently from a cost and performance basis. Overall, the early benefits from SouthTrust's Cisco IP Communications deployment have met or exceeded the expectations of the bank's IT and executive management. The new infrastructure processes more than 7 million voice calls each month and cost savings has been the most dramatic benefit derived from the system.

" The number one thing the Cisco IP Communications solution has done for us is save money," Adams says. "We will save more than $5 million in telephony costs this year compared to actual costs in 2000, and that number will continue to grow as we utilize the technology going forward."
The $5 million-plus in cost reductions includes savings of 20 percent in local and Frame Relay circuits; 51.3 percent in moves, adds, and changes; 93.9 percent in conference call charges; and 38.4 percent in long distance costs. "We have reduced our costs in moves, adds, and changes tremendously," Adams says. "We no longer need to send technicians to remote sites, and we have the ability to maintain all remote sites centrally, and provide new service overnight."

In addition, the company expects that it will reduce overall voice and data systems maintenance costs by about 15.4 percent annually. "We have a whole new system, and we've added 150 new branches since 2000-our baseline year for evaluating savings from this project-and our headcount has not grown," he says. "Because of this project, we have eliminated more than $700,000 in annual key system/PBX maintenance, and we have reduced our IT staff by three people." The culture of the IT department has changed as well. "In the beginning we had a voice group and a data group and they didn't talk to each other very much," Adams says. "When we transitioned the department into a converged voice and data group, and the whole atmosphere changed. Our converged group has been cross-trained, people have exchanged a lot of expertise, and the department is much stronger and more efficient than ever before."
Perhaps most importantly, users are satisfied. An April 2003 survey, with 438 sites or departments responding, ranked overall system performance as good, with reliability of calls, reliability and quality of voice mail, quality of local and long distance calls, and features all rating good, or between good and excellent. "Our old phone systems would not have passed the test," Adams says.

" All of our acquisitions will be converted to IP Communications," Adams says. "They realize cost savings immediately from reduced long distance costs and toll bypass, and from remote management. And all of our new branches, new buildings, and data centers use Voice Over IP. It's a no-brainer for a new site, because the hardware costs are so low that VoIP blows away key systems and PBXs. More importantly, they immediately become part of the SouthTrust virtual PBX with the same features, functionality, and access as the existing SouthTrust sites."

All in all, SouthTrust's risk, taken in the early days of convergence and IP telephony, is being rewarded. This large Cisco IP Communications deployment-which has effectively created a virtual PBX environment-is in production and providing tangible benefits and results. The bank is positioned to exploit business opportunities, improve productivity, save money, and provide superior customer service. And Cisco and its partners helped to provide the technology foundation, know-how, and commitment to enable SouthTrust to realize this objective.
" This solution came at a time when we really needed it," Adams says. "We successfully completed a smooth migration from our old system, and created an infrastructure that will allow us to grow."

source : Cisco

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