In the hyperconnected world, digital transformation has become synonymous with progress, efficiency and innovation. For governments, business and defense organizations alike, the ability to leverage the power of digital technologies isn’t just a competitive edge – it’s an existential imperative. But as organizations are scrambling to modernize, there is a disturbing trend emerging more than 70 per cent of digital transformation programs are failing to deliver the results for which they were designed. Although this might sound like a business statistic, the implications go far beyond lost revenue opportunities or technological obsolescence, particularly in critical sectors such as defense, energy and national infrastructure.
The failure of digital transformation has a particularly perverse effect on cybersecurity and helps to turn a technical problem into a national security crisis. As defense organizations, government agencies and critical infrastructure operators strive to weave modern technologies into legacy, often highly complex architectures, cyber vulnerabilities multiply. Failed digital transformation – where systems will not work as planned or are incomplete – not only erodes operational effectiveness: it also leaves intact legacy systems open to attack. In a cyber-threat landscape that shows no signs of abating, the stakes are high. A failed digital transformation in a critical system means more than a wasted investment. It means opening the door to cyberattack, spying, and even sabotage.
The Multifaceted Causes of Digital Transformation Failures
The first step to fixing the problem of digital transformation failure is to understand why so many attempts fail. Although every industry has its own unique problems, the defense and national infrastructure sectors face distinctive challenges that can make failure more likely. The main causes of digital transformation failure include:
- Vision and leadership buy-in the lack of clear, well-communicated vision and executive buy-in may prove to be the most damning characteristic of digital transformation efforts. In many cases, organizations put themselves on a path to digital transformation without having clearly defined a vision for what success looks like, a strategic roadmap for how they intend to get there, or the buy-in from leadership that would be necessary to guide the transformation. Layered bureaucracy, which characterizes many defense sectors, can also slow decision-making and hinder leaders’ ability to focus on the right priorities.
- Overestimating Simplicity: Old legacy systems, especially in the defense and government sphere, are decades old. These systems are not only old but complex. They were designed for a pre-digital world. Connecting new technologies – be it cloud computing, AI or data analytics – to legacy systems is a complex process in itself. Organizations often underestimate the time, money and resources required to modernize and end up with projects that fail to deliver on either cost or time.
- Cultural Resistance: Digital transformation is as much about cultural change as it is about technology. The top-down structures and efficient chain-of-command protocols of the defense sector can be resistant to the inclusive, free-thinking environments required for digital transformation success. Employees and managers might resist new tools and processes, especially if they feel that these threaten their roles or workflows.
- Siloed Operations and Poor Communication: Effective digital transformation projects require seamless collaboration between IT, operations and leadership. In large, hierarchical organizations such as defense agencies or infrastructure operators, siloed operations and poor communication, often hinder such cross-functional collaboration. If departments do not align, or do not communicate effectively, digital transformation projects can be fractured, with partial or incomplete implementations.
- Omission of cybersecurity: The most troubling omission might be the lack of emphasis on cybersecurity. It is common for organizations to see cybersecurity as an afterthought, to be attended to only after the new systems and technologies have been put in place. This means there is a ‘window of vulnerability’ as the transition to new systems takes place. This is especially important for organizations in the defense and national infrastructure sectors that might not survive a cyberattack. They hold industry and government information, command-and-control capabilities and critical operational systems.
The Cybersecurity Risks of Failed Transformations
Underlying every digital transformation is the introduction of new technologies that improve efficiencies, generate data and automate processes. However, the new technologies that underpin digital transformation also exponentially increase exposure to cyberattacks, particularly if not handled properly. Each stage of digital transformation entails digitizing processes, moving to cloud environments, and linking previously isolated systems – presenting an entirely new attack surface for cybercriminals and nation-state adversaries to exploit.
And in the defense and national infrastructure sectors this risk is heightened. Ineffective or failed digital transformation programs can result in:
- Exposure of Critical Data: Defense organizations depend on secure systems to handle highly sensitive data about military strategies, personnel data and classified communications. Failed digital transformation can expose this data to hacks. Hackers or nation-state actors can exploit openings in new systems that are integrated or partially modernized to breach firewalls and gain access to strategic defense data. Stolen or altered data can erode national security by letting an adversary know sensitive information about military operations or defense capabilities.
- Crippled Command-and-Control: Digital networks are the critical infrastructure that enables real-time communications and coordination in modern defense systems. If digital transformation fails, command-and-control systems are broken or exposed to cyberattack. Adversaries could intercept military communications or create confusion during a war, rendering friendly commands inoperable or untrustworthy. Or worse, hostile forces could commandeer defense systems. A particularly ominous example is an attack on command-and-control systems that could disable drones, missiles or other automated technologies, or even seize control.
- Cyber Sabotage of Critical Infrastructure: National security is not just the concern of defense ministries. Critical infrastructure such as energy grids, transport networks and water supplies are also strategic assets that, if compromised, could have serious consequences. Digital transformation failures in these sectors can lead to vulnerabilities in operational technology (OT) systems that, if attacked, could lead to large-scale power outages, supply chain disruptions or even environmental disasters. Real-world cases such as the 2015 cyberattack on the power grid of Ukraine illustrate the stakes involved in securing critical infrastructure for countries that fail to do so.
- Insider Threats and System Misconfigurations: Not all cyber vulnerabilities stem from outside of an organization. Digital transformations can result in insider threats and system misconfigurations as well. Employees may not be trained well enough on a new system to understand the information they are working with, or the security of the system. Poorly configured systems – a result of a rushed or incomplete transformation – can become exploitable vulnerabilities, easily acted upon by malicious actors. In defense, where data and operational integrity are vital, these ‘soft’ vulnerabilities can cause harm.
Case Studies: The Real-World Impact of Digital Transformation Failures
Consequences of digital transformation failure are more than just hypothetical. A number of examples from the real world reveal the actual dangers that arise when digital transformations get it wrong – especially in areas of national security.
Case Study 1: The 2015 Ukrainian Power Grid Cyberattack
In late December 2015, the country of Ukraine suffered a massive cyberattack against its power grid, resulting in blackouts across much of the nation and cutting power to a quarter of a million people. Security experts concluded that the intruders, a highly coordinated army of cybercriminals, hacked their way into the country’s energy infrastructure using malware. The 2015 blackouts in Ukraine graphically illustrate how outdated (or improperly secured) critical infrastructure systems can be vulnerable to attack. Ukraine had been undertaking the task of digitizing parts of its energy infrastructure, but security gaps were exploited by the attackers, demonstrating that even incomplete digital transformation can bring real risks.
For other states with similarly old infrastructure, it is a warning: unless digital transition is managed securely throughout, from the core to the periphery, then critical infrastructure is vulnerable to sabotage, both civilian and military.
Case Study 2: The 2020 SolarWinds Cyberattack
Since the 2020 SolarWinds breach – which saw a nation-state-backed hacker inserting malicious code into a software update for the Orion software used by government agencies and Fortune 500 businesses, making it the most significant cyberattack on a private company in recent years – we have become painfully aware of the digital vulnerabilities that can be used as attack vectors.
The scope of the attack, which compromised systems at the U S Department of Homeland Security, the Pentagon and countless other targets, wasn’t completely clear, but it certainly showed the consequences of rushing a digital transformation without investing in cybersecurity. Today, as organizations push to modernize, every layer of the digital infrastructure needs to be secure – or the breach could have similar national security implications.
Why Cybersecurity Must Be Central to Digital Transformation
The case for transformation is straightforward: to compete, to be efficient and effective, to thrive in a digital world, organizations must digitalize. But digitalization is not a goal in itself; it is a means to an end. When it comes to national security, the digital transformation must be in support of, and never at the cost of, cybersecurity.
- A proactive, not reactive approach to security: In the past, cybersecurity was often relegated to the backseat; thought of after every other part of the process was completed and, even then, only if there was a threat. In the future, organizations will need to adopt a proactive approach to security, and this must be built into every phase of the digital transformation process, from designing a system to implementing it and maintaining it, with encryption, multi-factor authentication, real-time threat detection, and incident response protocols.
- Investment in cybersecurity talent: the pace of digital transformation is picking up and organizations need to recruit and train skilled cybersecurity professionals to help ensure new systems are hardened. This is particularly true in the defense industry, where many of the systems are more complex and the data, they process is highly sensitive. Investment in the recruitment and retention of cybersecurity talent is critical to defense organizations.
- Continuous monitoring and adaptation: Digital transformation is not a one-time event; it is a continuous process. When organizations adopt new technologies, they must also continuously monitor for new security vulnerabilities and adjust security measures to stay ahead of security risks. The threat landscape continues to evolve, and organizations must remain vigilant to thwart newly emerging cyber threats.
- Cross-Sector Collaboration: In addition to the existing relationship between government and defense organizations, industry and commercial sector companies need to increase cross-sector collaboration to share best practices, intelligence and cybersecurity solutions. Public-private partnerships can help ensure that digital transformations are both successful and secure. When organizations pool resources and knowledge, they also pool the tools to defend against the ever-evolving cyberthreats that aim to breach national security.
The dismal record of digital transformation efforts offers a concrete and urgent national security issue. In sectors such as defense, energy and critical infrastructure, failures translate not just into embarrassing outages and lost revenues, but also to their own cyberattacks, data breaches and sabotage – all of which can have potentially deadly consequences. As national systems modernize, they should realize that security does not just follow from digital transformation – it is a prerequisite.
By building cybersecurity into digital transformation at the very beginning, governments and organizations can better support national security through proactive, integrated security, targeted investment in cybersecurity talent, and collaboration across sectors.
It is no longer enough for a nation to innovate to stay secure; it must also innovate securely to remain viable in an increasingly hostile cyber landscape, where failure is no longer an option. Digital transformation must succeed, or we collectively risk losing.
About the Author
Joe Crist is a seasoned Digital Transformation Expert and the Founder of Transform 42 Inc. With a 14-year military background in the U.S. Navy and U.S. Army National Guard, Joe brings a wealth of experience in resilience and strategic leadership. He transitioned from military service to working with top firms, tackling high-stakes projects for defense, government, finance, and healthcare sectors.
Driven by the challenges he observed in businesses struggling to adapt to digital changes, Joe developed the hyper-scaling blueprint, a comprehensive strategy that focuses on aligning people, processes, and technology for sustained business growth. His method emphasizes agility, innovation, and outcome-based strategies, helping organizations become more customer-centric and adaptive to market demands.
In addition to leading Transform 42 Inc., Joe is expanding his thought leadership through a podcast featuring industry leaders and a forthcoming book that dives deeper into strategies for navigating digital transformation.
Joe can be reached online at [email protected] or his many platforms at https://linktr.ee/transform42 and at our company website https://www.transform42inc.com/
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