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Bank on outsourcing: merging large financial institutions necessitated one solid solution - Service Providers/Services - National Commerce Financial Corp. information system

Communications News, July, 2002

The merger of equals in 2000--National Commerce Bancorporation and CCB Financial Corp.--meant the resulting National Commerce Financial Corp. (NCF), headquartered in Memphis, TN, had to strategically unite the disparate back-end systems and networks of its subsidiary banks, giving users access to business critical applications and information, as well as a secure medium of communication.

Diversified financial and consulting services are delivered through NCF's network of banking affiliates operating in 14 of the nation's fastest-growing metropolitan areas. With operations headquartered in Durham, NC, NCF manages multiple nonbanking subsidiaries, 450 branches in nine Southeastern states and three bank brands: National Bank of Commerce, Central Carolina Bank (CCB) and First Market Bank.

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With the merger came the required convergence of three separate networks that supported NCF's subsidiary banks. With a mix of technologies from dial-up and DSL to frame relay connections, NCF's goal was to standardize the network to support legacy analog and SNA protocols. Concurrently, NCF wanted to upgrade to new technologies that would provide the necessary bandwidth for future growth of new ATM and branch locations, and new applications like voice over IP.

Before the formation of NCF, Robert Gordon--now its first vice president and manager of network services--was responsible for CCB's entire network, some 200 connected branches and ATMs. Gordon had outsourced the strategy, design, implementation and operation management of that network to Vanguard Managed Solutions (VanguardMS), which had helped CCB with a frame relay rollout.

Gordon also had turned to its CareGuard services, full-service network and operations management, which resulted in reduced operational costs and risks, continuous support of evolving network needs and identification of potential problems before they occurred--known as predictive network management.

Ongoing requirements ranged from connecting new branches to upgrading transport services to day-to-day monitoring of the performance of the network.

Similar to his previous CCB role, Gordon was dually responsible for NCF's network upgrade and managing the new network that immediately doubled in size. This all had to be accomplished while maintaining the same level of customer service.

Gordon knew that his two-person team could not handle the network management in addition to the many other duties that accompany a network supporting more than 450 locations.

Upon its evaluation of all options that might effectively control cost in implementing the unified network, the NCF executive team led by Gordon opted for an outsourcing relationship, an easy sell to management once the executive team saw it all outlined on paper. "Our outsourcing strategy was easily justified when I demonstrated the costs for the resources required to constantly evaluate network performance and deploy connections to new locations, all while minimizing network downtime," says Gordon.

"Furthermore, there were other large expenses that outsourcing could eliminate, such as license fees, training personnel, and building network management applications and an operations center."

The managed network service provider solution helped NCF consolidate, standardize and manage its highly scalable network, improving operational efficiency and customer service.

Gordon's network, with new frame relay links, improves the response time of the help desk for problems with servers, applications and other tools. Predictive network performance management notifies NCF's help desk of network problems and resolutions, which simplifies troubleshooting issues from users.

As a result of its continued growth, NCF is currently testing new managed VPN services to increase the bandwidth availability on branches' frame relay links by carrying nontime-sensitive information.

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SERVICES MARKET CONTINUES TO GROW

While other IT sectors are contracting, worldwide spending for IT services is expected to increase by 2.8% this year to $557 billion, according to Gartner Dataquest. The research firm predicts the sector will grow by 7% in 2003 to $597 billion.

With competition more aggressive than ever, Gartner Dataquest analysts suggest that services customers should look beyond price when selecting a provider. Pricing that is too low, the firm says, could lead to reduced service quality and innovation, and eventually a breakdown of the relationship.

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Bank on outsourcing: merging large financial institutions necessitated one solid solution - Service Providers/Services - National Commerce Financial Corp. information system

Communications News, July, 2002

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