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Functional Service Provision (FSP) outsourcing model – a modern view

December 16, 2021

Dr Ivan Fisher, Vice President, Head of Commercialization at G&L, looks at the benefits of the increasingly popular Functional Service Provision model of regulatory affairs outsourcing.

FSP is commonly applied to post-approval maintenance, labeling and CMC, regulatory operations, especially where high volumes of more transactional activities are performed.

The model provides an opportunity to drive cost-effectiveness by allowing organizations to focus their internal regulatory resource on key value drivers and revenue-generating activities safe in the knowledge that other key work is being undertaken by industry professionals through FSP.

When performed correctly, strategically, and pragmatically with a trusted and collaborative partner, experience has shown that cost efficiencies of 35–75% can be realised, alongside significant value-add, without any compromise to quality.

Successful FSP models are bespoke in nature but are commonly built around an “engine” of specialized resource provides the bulk of regulatory activities across lower-cost centers of global expertise, supplemented by local market expertise, where required. Meanwhile, senior vendor stakeholders and project managers are co-located on- or near- key client stakeholders.

Operations are tightly controlled and monitored through robust governance, operational best-practices and procedures and the implementation of KPIs and metrics.

Historically, FSP models of outsourcing were explored as merely a cost-cutting exercise. However, the modern view is increasingly nuanced, with FSP driving significant extra benefits and value-add beyond the bottom line of cost.

Undeniably, cost-effectiveness is still high on the agenda for most organizations, but it is important that cost-effectiveness is driven by two primary factors – pricing and quality of output.

A highly-functional FSP model looks to maximize both cost and quality, through a balance of competitive pricing, leveraging of lower cost centers of expertise, optimal use of specialized resource and partnership with an experienced vendor with low staff attrition.

By utilizing a pool of expertise, an experienced outsourcing vendor can provide significant flexibility and scalability to a client’s operations.

Such a model can provide the agility to up- and downscale quicky, flexing according to changing business needs and temporary peaks in regulatory activity. Local experts can be brought into the engagement, as and when required, on an ad hoc basis to provide additional skills and market-specific expertise.

Furthermore, significant productivity gains can be realised through the implementation of best practices, the streamlining and optimisation of processes, the implementation of KPIs and metrics that drive a “right-first-time” mentality, and through clever use of time-zones that can be leveraged to provide an “around the clock” regulatory service.

The modern view of FSP should be held differently to the historical view.

Pragmatic and nuanced, it is a model that is extremely well suited to the modern, global business environment that reduces costs, refocuses internal expertise onto higher revenue-generating activities, drives enhancements in quality and productivity, and enables a regulatory organization to flex to accommodate dynamic shifts in volume and when facing ever-changing business needs.

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