By: ABRS- Academic Team
Introduction
For many years, the traditional Contract Research Organization (CRO) model has been the default approach for outsourcing clinical trial execution. However, today’s clinical research environment—characterized by increasing protocol complexity, heightened regulatory scrutiny, cost pressures, and the demand for greater operational agility—is prompting sponsors to reassess how they structure their outsourcing strategies.
As a result, the Functional Service Provider (FSP) model has gained momentum as a more flexible and sponsor-controlled alternative to full-service outsourcing.
In this blog, we explore the key factors driving the shift from CRO-centric models to FSP partnerships, examine why sponsors are increasingly favoring functional outsourcing, and discuss how this transition supports greater oversight, scalability, and long-term operational efficiency across clinical development programs.
Greater Strategic Control and Governance for Sponsors
A key strategic reason sponsors are shifting from traditional full-service outsourcing with CROs to Functional Service Provider (FSP) models is the desire for greater control, oversight, and governance over critical clinical development functions. Under the conventional CRO model, entire studies are executed by external partners, which can obscure decision-making lines and reduce sponsor influence on daily operational choices. By contrast, FSP models enable sponsors to embed dedicated functional teams—such as clinical operations, data management, or regulatory affairs—directly within their internal governance structures, providing enhanced operational transparency and tighter alignment with corporate strategy and priorities. For example, FSP arrangements allow clinical monitoring personnel to work within a sponsor’s systems and standard operating procedures rather than under a CRO’s project-based structure, giving sponsors greater oversight of performance outcomes and quality control.
This shift toward embedded functional outsourcing also reflects sponsors’ broader efforts to retain institutional knowledge and continuity across programs. Sponsors benefit not only from the specialized expertise of external FSP teams but also from long-term functional integration that builds internal capabilities over time, reducing redundancy and preserving best practices. Industry data show that the use of FSP and hybrid FSP models has increased significantly in recent years, with many sponsors now allocating a major portion of their outsourcing budgets to functional and mixed models, rather than pure full-service contracts.
Moreover, this trend is supported by the restructuring of outsourcing taxonomy itself. Leading industry research institutions and analysts have observed a distinct evolution in clinical outsourcing frameworks, where FSP—along with blended or hybrid arrangements combining FSP and traditional services—has become central to optimized governance strategies. These new models allow sponsors to balance internal decision-making authority with scalable external execution, helping organizations navigate the complexities of global regulatory environments and multidimensional trial designs more effectively than with traditional CRO engagements alone.
Cost Efficiency and Scalable Resourcing in a Volatile Clinical Landscape
Beyond governance, cost efficiency combined with scalable access to talent has become a central strategic driver behind sponsors’ growing preference for FSP models over traditional full-service CRO engagements. As development pipelines expand and contract in response to portfolio reprioritization, sponsors are under increasing pressure to align resourcing models with real-time program needs. According to Deloitte’s 2023 life sciences outsourcing analysis, sponsors are moving away from fixed, study-based cost structures toward more modular models that allow them to scale functional capacity up or down without long-term financial lock-in.
Traditional CRO models often bundle services across multiple functions and timelines, making it difficult for sponsors to isolate costs or redeploy resources efficiently when protocols change or trials are paused. In contrast, FSP arrangements enable sponsors to fund specific competencies rather than entire studies, creating clearer cost attribution and greater financial predictability. McKinsey & Company emphasizes that leading sponsors are adopting functional outsourcing as a way to reduce structural inefficiencies and improve cost transparency across clinical portfolios, particularly in late-stage development where resource intensity is highest.
Scalability is equally critical from a workforce sustainability perspective. The clinical research industry continues to face persistent talent shortages, especially in roles such as clinical monitoring, data management, and regulatory operations. Rather than maintaining large internal teams or relying on CRO-managed staffing models that fluctuate by study, sponsors are increasingly using FSP partnerships to access stable, functionally aligned teams that can be redeployed across programs. As highlighted in a 2022–2023 Tufts Center for the Study of Drug Development (CSDD) analysis, sponsors leveraging FSP and hybrid models report improved workforce continuity and reduced onboarding time, contributing to both cost savings and operational resilience.
Strategically, this shift reflects a more mature view of outsourcing—not as a short-term cost-cutting exercise, but as a mechanism to optimize long-term portfolio economics. By decoupling talent from individual trials and aligning functional capacity with pipeline priorities, sponsors can respond more effectively to uncertainty while preserving budget discipline and execution speed. In this context, FSP models are increasingly seen as a foundational element of sustainable clinical development strategies rather than a tactical alternative to CROs.
Risk Mitigation, Quality Consistency, and Long-Term Strategic Partnerships
As clinical trials become increasingly global, complex, and data-intensive, sponsors are placing greater emphasis on risk mitigation and consistent quality delivery across programs. One limitation of traditional CRO models is their project-based nature, where teams are often assembled and disbanded at the study level. This structure can introduce variability in execution, knowledge transfer gaps, and increased operational risk—particularly when studies span multiple regions or require specialized regulatory expertise. Industry observers have noted that this variability can complicate quality oversight and hinder long-term performance optimization.
In response, sponsors are turning to FSP models as a way to create more stable, functionally aligned operating environments. According to analysis published in Applied Clinical Trials in 2023, sponsors using FSP or hybrid outsourcing models benefit from greater process standardization and reduced execution risk, as functional teams remain consistent across studies and operate within sponsor-defined quality frameworks rather than CRO-specific methodologies.
Quality consistency is also closely tied to regulatory compliance. As regulatory authorities such as the FDA and EMA continue to emphasize sponsor accountability—regardless of outsourcing arrangements—many organizations are reassessing models that limit their direct oversight of trial conduct. Deloitte’s 2024 life sciences risk and compliance outlook highlights that sponsors are increasingly favoring outsourcing approaches that allow them to maintain control over quality systems, audit readiness, and vendor performance monitoring, positioning FSP partnerships as a more compliant and defensible model than fully outsourced CRO structures.
Beyond operational risk, sponsors are also rethinking the nature of vendor relationships. Rather than engaging CROs on a transactional, study-by-study basis, many sponsors are forming long-term FSP partnerships focused on continuous improvement and shared performance objectives. McKinsey & Company’s 2025 insights on clinical operations transformation underscore that enduring functional partnerships enable better performance benchmarking, proactive risk identification, and more resilient delivery models—particularly in uncertain development environments where priorities may shift rapidly.
Taken together, these factors explain why FSP models are increasingly viewed not simply as an outsourcing alternative, but as a strategic risk management framework. By stabilizing teams, embedding quality oversight, and fostering long-term collaboration, sponsors are better positioned to deliver consistent outcomes while navigating regulatory complexity and operational uncertainty.
Conclusion:
The shift from traditional CRO models to Functional Service Provider partnerships reflects a broader evolution in how sponsors approach clinical development strategy. As trials grow more complex and global, sponsors are no longer seeking outsourcing models that simply transfer executional responsibility. Instead, they are prioritizing approaches that enable greater strategic control, financial agility, and sustainable operational performance across their portfolios.
As explored in this blog, FSP models allow sponsors to retain governance and decision-making authority while accessing scalable, functionally aligned expertise. Organizations such as ABRS (Advanced BioResearch Solutions) exemplify this approach by supporting sponsors with embedded functional teams that integrate into existing operating models, quality systems, and technologies—rather than operating in parallel to them. This enables sponsors to scale critical capabilities while maintaining ownership of strategy, oversight, and compliance.
Ultimately, the growing adoption of FSP partnerships signals a maturation of outsourcing strategy within the life sciences industry. Sponsors are moving away from transactional, study-based relationships and toward long-term, capability-driven collaborations. In this context, ABRS’s FSP-focused delivery model reflects how specialized partners can support consistent execution, risk mitigation, and operational resilience—helping sponsors navigate today’s clinical development challenges with greater confidence and control.