CFO Studio Magazine with Alison Cornell

I n late Q3 2016, as CFOs worked on their capital budgets for the upcoming year, they faced a trifecta of uncertainties: a so-so economy, lingering concerns about possible interest rate hikes, and an election that presented a choice between two starkly different candidates. Of course, that was on top of the usual concerns about competition, regulation, and other issues that keep CFOs on their toes. To see how financial executives are dealing with these multiple issues, CFO Studio spoke with chief financial officers from businesses that represent three significant industries: technology, health care, and consulting. From taxes to strategy, they shared their thoughts about 2017. “Fortunately, the state of the economy has not affected our capital planning,” says Dave Pearson, CFO of Holmdel, NJ–based Vonage, a leading provider of cloud communications services for consumers and businesses. “We’re continuing to commit capital into our unified communications cloud segment. We’re basically putting in as much capital as we can effectively deploy.” Vonage’s expanded focus from Internet- based telephone services to cloud communications services for both the consumer and business markets gives the company new capital needs. Pearson notes that Vonage’s consumer network doesn’t consume much cost, “Since it’s already in place and we can basically maintain it,” so the cash it generates frees up funds to invest on the business side. “Currently, the cloud unified communications market has less than 20 percent penetration, so there’s a lot of room for growth,” he adds. Health Care, Borrowing But Pearson’s budget-planning plate is filled with a variety of other issues, including rising health care costs, which continue to be a big issue for many businesses. He says Vonage is trying to rein them in with the company’s first-ever self-insurance plan. “We implemented it in 2016—with a backstop insurance plan that kicks in after a certain level —and so far it seems to be the right way for us to go. We plan on continuing the self-insured health plan in 2017.” BUDGETS: WHAT’S ON THE TABLE Q1 2017 WWW.CFOSTUDIO.COM 15 CFOs SAY ELECTION, OTHER ISSUES COMPLICATE YEAR-END PLANNING BY MARTIN DAKS