Why the FSP Model Is Having Its Moment (and What It Means for Clinical Trial Operations)

When I sat down to record the latest episode of From Lab to Launch, I expected a solid conversation about outsourcing. What I got instead was a masterclass in how the entire philosophy of clinical trial resourcing is being rewritten in real time.

My guest, Dr. Les Enterline, Senior Vice President and Global Head of Functional Service Partnerships at PPD, part of Thermo Fisher Scientific, has spent decades sitting on both sides of the sponsor-CRO relationship. That dual perspective shapes everything about how he talks about functional service provider (FSP) models, and it's what makes this conversation so worth unpacking.

First: What Actually Is an FSP Model?

Before we can talk about why FSPs are gaining traction, it helps to be clear on what they are and what they're not.

In a traditional full service outsourcing (FSO) model, a sponsor essentially hands a study to a CRO and says: run this. The CRO uses its own systems, its own processes, its own staff. The sponsor gets check-ins and oversight, but the operational control sits with the CRO.

In a functional service provider (FSP) model, the dynamic flips. The CRO's staff embeds within the sponsor's environment, follows the sponsor's SOPs, works inside the sponsor's systems, and takes direction from the sponsor. Rather than running the study independently, the CRO is providing people with deep subject matter expertise in a specific function.

As Les put it: "We're providing a service: people with subject matter expertise and knowledge in that specific function that the client is looking to reach for."

The pricing structures differ too: FSP can be unitized, partial FTE, or full FTE depending on the engagement model.

Why FSPs Are Winning Right Now

This is where it gets interesting, and where the April Dunford lens becomes useful.

If you've read Obviously Awesome (required reading, in my opinion, for anyone trying to communicate value in a crowded market), you'll recognize what's happening with FSPs. For years, sponsors facing resource gaps defaulted to one of two "competitive alternatives": hire internally, or hand the whole study to a CRO. Both come with real costs. Internal hiring is slow and creates fixed overhead during pipeline troughs. Full CRO handoffs mean sacrificing oversight and control.

The FSP model wins because it solves a problem neither alternative handles well: how do you flex specialized capacity without losing visibility?

Les identified several forces making that question more urgent than ever:

Pipeline volatility. Sponsor pipelines ebb and flow. Maintaining a full internal team for a peak that will inevitably ease off is expensive. FSP lets sponsors scale up and ramp down without the overhead whiplash.

Regulatory pressure. ICH E6(R3), the updated GCP guidelines, places greater emphasis on sponsor oversight. FSP models are architecturally well-suited to this because the sponsor retains direction-setting while the FSP provides execution.

New indication gaps. When a sponsor moves into a therapeutic area where they don't yet have internal expertise, they need more than bodies: they need subject matter knowledge. Some are using FSP to bring that expertise in-house temporarily, training up their own teams in the process.

Cost redirection, not just cost savings. This nuance from Les stuck with me: it's not always about spending less, it's about spending smarter. Technology is letting individuals stretch across more projects, which means freed-up dollars can go toward new programs or earlier go/no-go decisions.

The Hybrid Problem (and Why Les Doesn't Use That Word Anymore)

When I asked Les about the rise of "hybrid" FSP/FSO models, he pushed back on the framing immediately. "I've moved away from calling it hybrid because hybrid's kind of a generic term."

What he prefers: mixed model. And the distinction matters.

Hybrid implies a set combination: some of this, some of that. A mixed model implies intentionality and customization. Each sponsor pulls different levers depending on where their internal strengths are, where there are gaps, and what each program demands. As Les said: "There isn't like one book you're pulling off a shelf giving you a recipe that's going to fit every single sponsor's needs."

This is actually a core insight from the Dunford positioning framework applied to services: the value isn't in the category label. It's in understanding which specific problems your target customer is trying to solve, and being honest that those problems differ by organization, by program, and by moment in time.

The Silo Concern (and How to Actually Address It)

One of the most common objections I hear about FSP models is the cohesion question: won't embedded external staff create silos? Won't it be confusing for everyone to know who reports to whom?

Les's answer was direct. The goal is for stakeholders, internal or external, not to notice any difference at all. Everyone aligns around the sponsor's priorities and represents the sponsor with the same accountability as a direct employee. "It doesn't matter where someone's actually getting a paycheck from."

What makes that work in practice: strong communication, transparency, and what Les called "honesty and candor across the spectrum." If something goes wrong, you surface it immediately rather than containing it. The model doesn't protect you from challenges because clinical research guarantees you'll face them. What it can do is ensure you face them together.

This is also where quality management infrastructure matters. At Qualio, we think a lot about how quality systems support exactly this kind of distributed, collaborative execution: ensuring that wherever your team members sit, they're working from the same SOPs, capturing deviations consistently, and maintaining the audit trail that regulators will eventually want to see.

Busting the Talent Misconception

The perception that FSP roles attract less experienced talent is, according to Les, simply wrong and worth addressing head-on.

FSP roles are actually harder in important ways. You're dropped into a client environment, often with minimal hand-holding, and expected to deliver immediately. That demands self-direction, strong interpersonal skills, and the kind of adaptability that can't be manufactured. The 95% retention rates Les cited within PPD's FSP partnerships tell a revealing story: people who do this work often find it more engaging, not less, because of how close they are to the product.

There's a career development angle too. Spending time in FSP gives CRO professionals a window into how sponsors think, what drives their decisions, and what they really prioritize. That's experience that's genuinely hard to get otherwise without changing employers entirely.

Where This Goes Next

When I asked Les to look five to ten years out, he gave the most honest answer a forecaster can give: "The only constant is change."

He doesn't expect sponsors to go all-FSP across the board. He does expect continued evolution of the mixed model, with more nuance emerging around what to keep internal, what to hand off fully, and where FSP fills the gap. Technology will reshape how much any individual can do across multiple projects simultaneously, and that will shift the calculus again.

What feels durable: the principle that sponsor control and CRO expertise are not actually in tension. The best models find ways to deliver both.

Listen to the Full Episode

If you work in clinical operations, biopharma development, or anywhere along the CRO-sponsor relationship, this conversation is worth your full attention.

Listen to the episode here

You can also connect with Les directly on LinkedIn.

From Lab to Launch is Qualio's podcast for the life sciences community: stories from founders, quality leaders, investors, and scientists on the front lines of bringing products to market. Explore all episodes or apply to be a guest.