I was astounded by an article from The Wall Street Journal that noted that JPMorgan Chase’s “40,000 technology employees make up about 17% of the bank’s head count.”

I have no idea whether that is a reasonable number to support JPMorgan’s vast global operations. But reading that article prompted me to think about the efficiencies that can be gained by a cloud versus legacy technical environment and to recall the operating principles that guided the formation of our company.

From the outset, United Capital was primarily built in the cloud.

We said to ourselves, “We’re not in the data center business. Being in that business is not the highest and best use of our time.”

We therefore decided we were going to maximize our use of Software as a Service solutions.

When our staffing structure is compared with legacy companies, which traditionally have maintained on-site servers and networks, our metrics are amazingly efficient. For instance, if 17% of our company’s 600 employees were dedicated to providing technical support, my department would have 102 people in it, instead of the fraction of that it contains.

If we delve even deeper into the numbers, some interesting and impressive figures emerge from a comparison of our United Capital FinLife platform, versus the JPMorgan model: JPMorgan has more than 5,000 branches and more than 40,000 tech employees. If half the 40,000 were dedicated to operational support for their offices, there would be only four full-time employees per office devoted to this front.

With our 83 offices, our equivalent number would be 332. Even if we group them into clusters or regions of 10, we would still be at 40.

If we assume that we have five dedicated resources to maintain the operation of our FinLife platform, then the effective leverage we get from its use, compared with the JPMorgan model, is about a whopping 800%.

Some might logically and correctly argue that our cloud model incurs more third-party costs than an in-house tech services model and that those costs would torpedo any savings.

But assuming that employee headcount often comes with its own organizational negative that inhibits operational flexibility in a rapidly changing world, any discussion strictly concerned with a pure cost comparison isn’t justified. Instead, the argument must also include strategic capability.

There are a number of benefits that are derived from a cloud-based model to help a company be more nimble.

Questions include, “What is your highest and best use?” or “How much of your time should be oriented to something that is not really core to your business?”

Some might be inclined to argue, “I’ve got a technical team and a department that handles that.”

Well, someone has to manage that department, and ultimately there is going to be a fire drill around it.

Why not instead hire a company that spends every waking moment of its business life dealing with that tech infrastructure to get its highest and best use and an automatically applied software upgrade whenever it is needed?

In addition, given the realistic security threats from cyberattacks that most online companies face, cloud-based security solutions are typically better equipped to thwart attacks and to manage them more effectively.

There is a benefit around flexibility. The consumer and business environments are rapidly changing.

Companies need to be able to pivot and respond accordingly, and a tech infrastructure can’t hinder that.

In a dynamic environment, firms don’t want to have any kind of anchor weighing down their mobility. With a cloud operation, a business isn’t slowed down by the tech infrastructure that has been put in place nor its attached support structure.

There is genuine value in having access to a cloud-based platform that people can use to achieve greater technical efficiencies, and it also means that they don’t to have to hire people or invest time and resources in creating and managing large in-house teams to support it.

To put it in context, despite the size of JPMorgan’s technical staff, it has the resources to spend huge sums on leadership and consultants to improve margins. This isn’t a luxury that a typical independent registered investment adviser can afford.

However, RIAs that are handicapped by legacy systems and balance sheets that can't sustain further margin loss do have something that JPMorgan doesn't have: a choice to evolve their business model, embrace a cloud platform and reduce staffing levels in an effort to be more efficient, nimble and profitable.

Whatever your own specific business needs are, a cloud-based technical support model is a best practice to consider.

Mike Capelle is head of United Capital Financial Advisers’ technology platform in Newport Beach, Calif. One of United Capital’s founders, he is responsible for the company’s technology and for driving enterprise innovation.

This story is part of a 30-30 series on ways to upgrade your practice. It was originally published on May 4, 2016.

Mike Capelle

Mike Capelle

Mike Capelle is head of United Capital's technology platform. One of United Capital’s founders, Capelle is responsible for the company’s technology and for driving enterprise innovation.