What started out as a cost-saving venture - the implementation of a VoIP telephony system - was the last straw on an expensive network infrastructure quagmire that North Salem State Bank found only an outsourced solution could untangle.

The five-branch bank in North Salem, IN was running point-to-point frame relay network circuits provided by a telco, another partner to support the Cisco VOIP infrastructure, and yet another partner to handle Internet and network security; and then there were the land lines. "The main challenge for us is that in our rural, spread out area, we were dealing with four to five phone companies regarding land lines alone," says Rod Lasley, president and CEO. "That made it fairly pricey to get the kind of data and communications lines we needed, and we wanted a simplification of the process, to deal with fewer vendors."

The bank worked with managed service provider BITS, Inc., which has more than 60 community banks on its customer roster, to create a voice and data infrastructure that would produce not only hard costs savings, but also reduce complexity - network complexity, vendor management complexity and regulatory compliance complexity. The project team mapped out a 50-step implementation process that last 12 weeks, with weekly status calls to go over project status and delivery dates.

The resulting network infrastructure includes a private MPLS network with redundant Internet access, hosted and managed Cisco VOIP telephony, hosted and managed firewall and IDS services, branch backup network connections, secure remote employee access, and redundant connection to core provider Jack Henry & Associates. The project budget was $84k for hardware and implementation, approximately 85 percent of the bank's annual IT budget. The return on investment is impressive - the bank estimates it is saving 25 percent on its telecom/Internet costs, or $40k annually. This adds up to $200k over the life of the contract, with ROI in 25 months.

And the fact that they got a better network out of the project? "That was the gravy on top of it," Lasley says.

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